Are creditors driving you crazy by calling numerous times every single day? Are you being embarrassed by collection calls at work? Are you staying up half the night trying to figure out how to pay everything? Are you being sued or garnished? Would it be a relief to get rid of your debts and start fresh? No one wants to file a Bankruptcy, but it may be the only way to discharge your debts and give you the fresh start you need.
You have done everything you can to repay your debt but, no matter how hard you try, you just can not get it paid off. You have asked your creditors to work with you, but they refuse or they demand payments higher than you can afford. Creditors are constantly calling you and demanding payment and suggest that you borrow money from a friend or a family member, or maybe even put it on another credit card. The creditors only want to hear that you have sent money and when you are sending more. If you’re paying what you can and still falling behind, then bankruptcy may be your best option.
Chapter 7 Bankruptcy
Chapter 7 Bankruptcy gets rid of all unsecured dischargeable debts. Unsecured debts are things like credit cards, medical bills and personal loans. Chapter 7 also gives you the choice to keep and continue payments on a home and vehicle or to give them back to the creditor and not owe anything more. To qualify for a Chapter 7 Bankruptcy, you must show the Court that your average monthly income and your average monthly expenses are about even, and you do not have the ability to repay a significant portion of your debt over the next three to five years. You also need to show the Court that you do not own more than what the law allows you to keep and still file a Bankruptcy.
Even if you do qualify for a Chapter 7 Bankruptcy, some debts are not dischargeable, such as alimony or child support, student loans, taxes due for less than three years, personal injury damages caused by drunk driving, and debts obtained by fraud, among others. Here at WALLING & FOSTER, P.C. we are experienced bankruptcy attorneys who will advise you as to whether you exceed the income limits, or the asset limits and whether your debts are dischargeable.
As soon as the case is filed, the Court issues an Order that STOPS ALL COLLECTION ACTIVITY including foreclosures, repossessions and garnishments.
With the current mortgage foreclosure crisis, more and more people are in a position of not being able to afford their home. This may be due to a loss of income from having hours cut, wages cut, or being laid off. Many people are questioning whether they should try and sell their house, even if they can’t get the full amount owed on the mortgage, whether they should sign papers the mortgage company is asking them to sign or whether they should just walk away from their home.
Then the questions become, what is the foreclosure process, what happens? How long can I live in my house? Will the mortgage company lock me out of the house? What happens to my credit?
We can answer these questions and more in a free 30 minute consultation. At that appointment we’ll talk with you and give you answers based on your own unique situation.
Chapter 13 Bankruptcy
Would it be a relief if you could consolidate all of your debts into a single monthly payment you could afford? Do you need to stop a foreclosure or repossession? Are creditors driving you crazy calling every single day? Are you being embarrassed by collection calls at work? Are you staying up half the night trying to figure out how to pay everything? Are you being sued or garnished? Chapter 13 can protect you from collection activity and consolidate your debts into one monthly payment.
Generally, someone who files Chapter 13 Bankruptcy has fallen behind in their bills because they’ve lost a job, been off work for medical reasons or had unexpected major expenses. Once you’ve fallen behind, you may not be able to catch up without the help of the Bankruptcy Court. As experienced bankruptcy attorneys, we will advise you as to whether Chapter 13 Bankruptcy is appropriate for you.
Chapter 13 Bankruptcy is a repayment plan for people who are trying to stop a foreclosure or repossession, or people who do not qualify for Chapter 7 Bankruptcy either because they have too much disposable net income each month, too much equity in their home or other assets, or for people who have substantial debts that can not be discharged. Based on the type of debt and the amount of debt you have, a monthly payment is calculated. You generally pay your secured debts in full. Secured debts are anything with collateral attached to them, such as a house, car or furniture. You may pay the unsecured debts anywhere from 10% to 100% of what you owe them, depending on your circumstances. Unsecured debts are things like credit cards, medical bills and personal loans. You will then make that monthly payment to the Chapter 13 Trustee appointed by the Court. A typical Chapter 13 Bankruptcy case lasts between three to five years from filing to discharge, depending upon your income and they types of debts you have.
As soon as the case is filed, the Court issues an Order that STOPS ALL COLLECTION ACTIVITY including foreclosures, repossessions and garnishments.
However, if you successfully make all of your Chapter 13 payments, you will receive a Discharge from the Court stating that your case is complete. At that time, most people only have their regular monthly mortgage payment to continue paying.
At this time, there is current legislation pending in Congress to help homeowners who are facing foreclosure. Part of that legislation is a change to the Chapter 13 Bankruptcy laws. The potential change would allow the Bankruptcy Court to modify mortgage loans. If the Bankruptcy Court is allowed to modify mortgages, it would be possible to do the following:
- Change an adjustable mortgage interest rate into a fixed interest rate;
- Change a high interest rate to a lower interest rate based on the current market;
- Lower the principal balance on a mortgage to the actual value of the home;
The legislation has passed the House of Representatives and is now being debated in the Senate. It appears that this bill will pass, which is good news for homeowners who are struggling to make their house payments. If this bill becomes law, we will be ready and able to help homeowners modify their mortgages and keep their homes.
Effect Of Bankruptcy On Your Credit
Once a Bankruptcy case is filed, it will appear on your credit report for up to ten (10) years from the date your case was filed. That does not mean you can not get credit for ten years. As long as you take steps to reestablish your credit, such as making regular mortgage payments or car payments, many people are able to buy a car, or house, or make some other major purchase within two years. As a practical matter you want to ask yourself, “What does my credit look like now?” and what it will look like in 6 to 12 months, if you do not get a fresh start through the bankruptcy process.
Here at WALLING & FOSTER P.C. we are experienced bankruptcy attorneys who will interview you in person to help you determine if what Chapter of Bankruptcy is right for you.
Contact Walling & Foster, P.C. to speak with an understanding and qualified attorney for a free consultation.
