Our bankruptcy lawyers can stop repossession of your car immediately upon filing your Chapter 13 case. In fact, it is possible to get the vehicle back after it is repossessed if you file Chapter 13 quickly. Provided that you have filed a Chapter 13, the repo man will not touch your car. We can consolidate the loan into the Chapter 13 repayment plan. Generally, we need only pay what the vehicle is worth and not the entire loan.
Even if home foreclosure started, Chapter 13 can stop the foreclosure as long as it has not been sold at sheriff’s sale. In the event that you need help understanding your rights in the foreclosure process, please call our bankruptcy lawyers. Prior to the sheriff’s sale, Chapter 13 gives you the right to pay back the arrears through your debt consolidation over an extended period of time. You must make the regular monthly mortgage payment after the case is filed.
Although student loan debts are not normally eliminated by Chapter 13, student loans can be consolidated and partially repaid. While you are making payment on your student loans through Chapter 13 you are protected from bill collectors and wage garnishment.
Better Than Refinancing
You may be tempted to try to avoid bankruptcy by refinancing your home. However, this is only a good idea if you are sure that you will be able to make the payments. If you are not able to include all of your debt in the refinancing, you may find that you still need to file bankruptcy, but you will not be able to eliminate debt that you have financed into your mortgage. Unlike refinancing, bankruptcy allows you to preserve the exempt equity in your home.
Changes in Bankruptcy Law
The new law will prevent very few people from filing for bankruptcy protection. Bankruptcy is still available for the general public and people can still eliminate debts.
There are now some additional steps to take to file a bankruptcy. Before you file for bankruptcy protection, you must complete a credit counseling session with a credit counseling agency that has been approved by the court.
After you file your bankruptcy, you must complete a financial management course with a court-approved agency. There will be a small fee for this course, which can also be taken over the internet or by filling out a workbook.
Lastly, the waiting periods are now longer between bankruptcy filings. After filing a Chapter 7 bankruptcy, you cannot file another Chapter 7 bankruptcy for 8 years. Moreover, if you file a Chapter 7 bankruptcy, you cannot file a Chapter 13 bankruptcy for 4 years.
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Types of Bankruptcy
Chapter 7 is a federal law that gives you freedom from burdensome debts and a fresh start in your finances.
Some examples of debts that may be eliminated include credit card debts, medical bills, personal loans, judgments arising from car accidents, balances remaining on repossessed vehicles, and some types of income taxes.
Most people do not lose any of their property in Chapter 7 bankruptcy. The law allows us to exempt certain types and amounts of property from creditors, so that you have a true fresh start. For example, if a debt is collateralized by your home or car, you can usually keep the property by continuing to make the loan payments. Our bankruptcy lawyers can also arrange for “reaffirmation” of the mortgage or car loan. To receive the full benefit of your bankruptcy, you need the guidance of experienced bankruptcy lawyers. Our goal is for you to keep your home, car, household goods and other belongings and get rid of your burdensome debt.
Chapter 13 is a plan for partial repayment of debts. Bankruptcy chapter 13 allows for consolidation and repayment of at least a portion of the debt over a three to five year period.
There are no interest charges and the principle does not have to be paid in full. You pay only the amount that is reasonably affordable for you, and there is no set percentage of debt that must be paid back. Typically, it is possible to eliminate a second mortgage entirely. This is called “lien stripping”. It allows you to pay back only the amount that is affordable for you over a reasonable period of time.
Chapter 13 allows you to consolidate mortgage arrears as well as bring your mortgage current over an extended period of time. Other examples of debts that can be consolidated are back taxes, car loans, student loans, credit cards and other types of unsecured debts.
Improve Your credit
Bankruptcy is not the end of your good credit, rather it is a way to rebuild your credit. The last two years of credit history weighs heavily on your credit score, so you can improve your score greatly over a two year period.
Tips From Our Bankruptcy Lawyers:
* Live within your means and avoid pay day loans. Pay day loans are short-term solutions that create long-term problems.
*Apply for a credit card and charge against it. Pay advances back over two or three months so that you can establish a positive credit history. However, if you can’t obtain a regular credit card, apply for a secured card where you deposit cash and charge against your deposit.
*Pay all your bills on time. You could qualify for a new mortgage on a house two years after completing your bankruptcy if you take steps to improve your credit.
Small Business Bankruptcy
One of the most important reasons for the bankruptcy discharge is to protect small business owners. If small business owners could not protect themselves with bankruptcy, they would be reluctant to take financial risks, therefore, damaging our economy. Bankruptcy gives the small business owner an opportunity to start over again. For example, these are some successful people who have gone through bankruptcy: Thomas Jefferson, Abraham Lincoln, Donald Trump, Henry Ford, Walt Disney, and the founders of Hershey’s Chocolate and Heinz Ketchup. You can be successful after filing bankruptcy too.
Protection from Creditors.
Our bankruptcy lawyers offer immediate protection from creditors upon filing your bankruptcy petition. When we file a bankruptcy petition with the court, it creates a blanket court order called an “automatic stay” against creditor collection efforts. All collection efforts will cease as a result. We stop harassing calls from collection agencies. We can also stop repossession of your car and in some cases we can obtain the return of repossessed vehicles. Our bankruptcy lawyers can stop foreclosure to give you time in order to catch up on payments. Stop the worry and the stress now.
New Bankruptcy Laws
Changes In The Law
There have been many changes in the law since October 17, 2005. Congress wanted to make sure that high income earners would attempt to pay back at least a portion of their debt through chapter 13, instead of entirely eliminating their debt through chapter 7.
In order to solve this perceived problem, Congress imposed a complex “means test” that uses IRS collection guidelines to determine who can afford to pay at least a portion of their debt through chapter 13. People who are under the median income for their state are exempt from the means test. Income figures are based on average income for the six calendar months prior to filing the bankruptcy.
Credit Counseling And Financial Management
The credit card companies set up credit counseling agencies to collect defaulted accounts for them. Then, these companies attempt to put people into “debt management plans” to consolidate the credit card debts and lower the interest rates on the credit cards. The payments under these plans are often too high to solve financial problems.
Of course, the credit card companies want to promote their debt management plans and so they lobbied Congress to require people to consult with a credit counseling agency before filing for bankruptcy protection. Consequently, the new law requires that you attend a credit counseling course prior to filing bankruptcy. The credit counseling agency may present you with a debt management plan, but you do not have to accept it. You must simply get the briefing.
After you file bankruptcy, you must complete a financial management course before discharge of debts.
Longer Wait Times Between Bankruptcy Cases
It used to be that you could not file a chapter 7 case until six years after a previous chapter 7 case. Presently, you must wait 8 years.
3 INDICATORS YOU MAY NEED TO FILE BANKRUPTCY
- If you are having trouble making the minimum monthly payments on your debts.
- If you are behind on mortgage or car payments or back taxes.
- If your unsecured debts are equal to your annual income.
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What does bankruptcy cost?
The court filing fee for Chapter 7 is $335.00 and for Chapter 13 it is $310.00. There is also an Attorney fee, which will depend on the complexity of the case and ability to pay. Generally, we provide a quote for the fee over the phone. For Chapter 7 bankruptcy, the court filing fee and attorney fee must be paid in full before the case is filed. For Chapter 13, most of the attorney fee can usually be consolidated with your other debts.
What does bankruptcy do to my credit?
Bankruptcy stays on your credit record for ten years. However, most people are able to obtain creditor shortly after they complete their bankruptcy and sometimes even while they are in bankruptcy. Generally, it is possible to get a good rate on a home mortgage two years after you file Chapter 7 bankruptcy, assuming you qualify in all other respects. If your credit is already bad, bankruptcy may improve it.
Do I have to file bankruptcy on all my debts?
You must list all of your debts in your bankruptcy papers. However, you can pay any debt you want after you file bankruptcy. You can do this informally or formally with a “reaffirmation agreement”.