One of the hardest processes to accept is the filing of bankruptcy. After the hard economic times our country has faced throughout the past few years, we understand that times can get extremely difficult and that you feel like you are just under water in debt. You try so hard to get your head above water. But, it is just nearly impossible based on unexpected debt that has incurred. Many clients tell us, “I feel like I am robbing Peter to pay Paul.” This is not a way to live. We also understand that creditors can be harassing and difficult to handle when they are calling. But understand, there is help. There is way out. Bankruptcy can be a lifeboat that brings you back to shore when your finances are sinking. No, it is not going to look good on your credit; however, it is a chance to start a new. You will begin a better lifestyle after the process is finished.
Getting a Fresh Start
Chapter 7 Info
You may be able to use Chapter 7 to provide you with many benefits.
It is for people with few or secured assets that they are willing to give up.
Chapter 7 is the type of bankruptcy that liquidates your debts except those that cannot be discharged. It lets you keep basic assets, like household goods, a certain amount of equity in your home or car, and all retirement and pension funds. There is no payment plan and the entire process to the date of a discharge could be as short as 120 days.
You can stop a pending foreclosure for a number of months, even if it is your intent to walk away from a mortgage you cannot afford. It will stop the foreclosure process and give you the time needed to find a new place to live. The mortgage company would file a motion for relief, which usually takes one month to complete. The lender would then have to start the foreclosure process all over again. You could have an additional 3-4 months in the home. Chapter 7 does not allow you time to catch up your mortgage. Most people, if behind, will surrender their home. It will give you some time to move at your discretion.
If you intend to keep any secured creditor’s collateral, ex. an automobile, you must keep the payments current.
Under Chapter 7, you pay the court costs and attorney fees before filing.
Chapter 7 bankruptcy may eliminate most kinds of unsecured debt. Some examples of unsecured debts Chapter 7 may eliminate are credit cards, medical bills, most personal loans, judgments resulting from car accidents and deficiencies on repossessed vehicles.
In addition to getting rid of your debt, Chapter 7 typically allows you to keep all of your property. As long as your car and mortgage payments are current, and there is no significant equity in your property, we should be able to request the creditor to allow you to reaffirm the debt.
Keep your home, keep your car, keep your personal belongings, but eliminate your debt: that is our goal with Chapter 7. You may be able to use Chapter 7 to provide you with many benefits.
Stop Creditor Harassment
If creditors are bothering you at work, harassing your family, friends and neighbors, or calling at all hours, you can put an end to it immediately simply by hiring us to represent you. Upon retaining our services, we provide you with our telephone number so that you can refer your creditors to us. We will keep the creditors off your back, and you can stop paying your creditors immediately, except for secured items that you want to keep.
Eliminate Repossession Debts
After a vehicle finance company repossesses your car, they auction it to reduce their loss. You are still responsible for the balance on the car, called a ‘deficiency balance’. We can eliminate your liability for the entire deficiency balance. Remove the risk of lawsuits and garnishments by filing a Chapter 7.
A Chapter 7 bankruptcy is one of the most effective ways to immediately stop garnishments. Garnishments can diminish your hard-earned income, making it nearly impossible for you to afford basic necessities. By filing Chapter 7 bankruptcy and stopping the garnishment, you will be able to use your income for more important necessities in life and start saving for your family’s future.
End Lawsuit/License Suspensions
Many states have imposed laws that allow the state to suspend your license if you failed to maintain liability insurance at the time of the accident. We can help you get your license reinstated if it is suspended due to an uninsured car accident or unpaid parking tickets. We can also stop lawsuits related to those car accidents.
If you are being sued, and you own a home, we strongly urge you to speak with us immediately about filing bankruptcy. Chapter 7 or another form of bankruptcy to stop a lawsuit immediately and prevent your creditors from placing a lien on your home or garnishing your hard-earned wages.
Chapter 13 Info
Are you trying to save your home from foreclosure? Is the “repo” man looking for your car?
Chapter 13 is for people with income and with assets that they do not wish to lose. Your main attention is to preserving your assets.
Chapter 13 puts an immediate stop to foreclosures and repossessions. It allows you up to five years to catch up the missed mortgage payments or to pay your secured creditors. Most times we are able to reduce the interest that you are paying on your cars and the other creditors, but not your mortgage.
In many cases you can wipe out some or all of your credit card debt as well as any other unsecured creditors. It is a good opportunity to keep home, cars and personal property when you need time to catch up.
Under Chapter 13, you are making payments to a trustee, usually by payroll deduction, who in turn pays the creditors your attorney has proposed under the “Plan”. Your unsecured creditors could receive anywhere from 100 cents on the dollar to 0 cents on the dollar with no interest. It is all based on your income and normal living expenses.
Chapter 13 bankruptcy is a debt repayment plan through which you consolidate your debts and make a payment on your debt over a three- to five-year period. While in a Chapter 13 debt repayment plan, the creditors cannot collect from you, and the creditors are required by a Federal Court order to adhere to the terms of the plan.
Immediately upon filing and your creditors being notified, they must cease all communication with you as the court will issue an automatic stay. This includes foreclosures, repossessions, wage garnishments, harassing bill collection calls and collection letters. You will be protected from these until your case pays out.
One very important thing to remember about Chapter 13 bankruptcy is that you must be working or have a consistent source of income for your repayment plan to be approved by the court. Not only must you be able to pay for your monthly living expenses, but you must also be able to make a payment to the court to consolidate your debts.
Debts that are generally consolidated in a Chapter 13 bankruptcy are mortgage arrears, balances on vehicle loans, credit card debts and other unsecured debts. All outstanding debts must be included in the Chapter 13 bankruptcy consolidation.
Stop Foreclosure Immediately
If your home is presently in foreclosure, a Chapter 13 bankruptcy filing will stop the foreclosure any time prior to the sale and allow you to repay your mortgage arrears through your Chapter 13 bankruptcy. You will still be obligated to make all future mortgage payments directly to the mortgage company, unless you file in Georgia and are four or more payments behind. Then you are required to make your future payments through the trustee’s office. The mortgage company may not foreclose to collect any outstanding mortgage payments without getting the court’s consent.
Save Your Car
If the “repo” man is looking for your car, a Chapter 13 bankruptcy will also stop the finance company from repossessing your car. The past-due payments and the entire balance on your vehicle loan will be consolidated, which you will pay off over the next three to five years. The vehicle finance company can no longer repossess your car, and you will no longer have to make a payment directly to the finance company. Under certain circumstances we may even recover your vehicle after repossession and consolidate the remaining balance, but not if repossessed in Alabama.
Your cosigners receive the same protection that you receive under Chapter 13 bankruptcy. Through a Chapter 13 bankruptcy, we will protect your cosigners from collection activity, and the creditors must wait to be paid. So, if your friend or relative cosigned on your vehicle, and you are having trouble affording the payments, we can put your remaining balance inside a Chapter 13 bankruptcy.
Beware of Refinancing
If you have equity in your home, you can file a Chapter 13 bankruptcy, protect your equity and repay your mortgage arrears over as long as five years. Refinancing or taking out a second mortgage may just create an additional mortgage payment that you cannot afford, instead of repaying your mortgage arrears through a Chapter 13 bankruptcy.
Mistakes Debtors Make Pre-Bankruptcy
1. Pretend nothing is wrong. Once debts reach a point where your monthly income is not enough, hoping and praying that nothing is wrong and that a miracle will come to save you is not a realistic solution.
2. Borrowing more money, to use the old adage, borrowing from Peter to pay Paul, only gets you further in debt.
3. Letting your reserves and retirement deplete to nothing. Never use every penny you have to pay off debt as you have nothing for living expenses and emergencies. Using your retirement triggers a possible IRS debt.
4. Deceiving creditors. Being honest with creditors will many times help. Often they can lower interest rates and payments.
5. Being ashamed of bankruptcy. Bankruptcy does not hold the stigma and shame that existed 30 years ago. Not only is it more common among high-income people, it also serves as the only option available to maintain a livable position.
6. Going it alone. Bankruptcy is a very complicated process and should be handled by a qualified attorney. If you should miss certain deadlines and requirements, then your case could be dismissed. By using an expert attorney to file on your behalf, you stand a much better chance of being free from debt.