Chapter 7 Basics

Chapter 7 Bankruptcy is a process provided for under United States federal law by which you are entitled to a fresh start. Chapter 7 may eliminate most kinds of unsecured debt. Some examples of unsecured debts 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, you typically can 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 have no problem making the arrangements for you to reaffirm the debt. Keep your home, keep your car, keep your personal belongings, but eliminate your debt. It is possible to use Chapter 7 to provide you with many benefits. Read about those benefits below and about other subjects related to bankruptcy. Through a Chapter 7 Bankruptcy you can: 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 me to represent you. Upon retaining my services, I provide you with a special telephone number so that you can refer your creditors to me. I will keep the creditors off your back, and you can stop paying your creditors immediately. 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.' I can eliminate your liability for the entire deficiency balance. Remove the risk of lawsuits and garnishments by filing a Chapter 7. Stop Garnishments A Chapter 7 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 a Chapter 7 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. I can help you get your license reinstated if it is suspended due to an uninsured car accident or unpaid parking tickets. I can also stop lawsuits related to those car accidents. If you are being sued, and you own a home, I strongly urge you to speak with a me immediately about filing a bankruptcy. A bankruptcy will stop a lawsuit immediately and prevent your creditors from placing a lien on your home or garnishing your hard-earned wages. Rebuild Your Credit One of the most common concerns that I hear from clients has to do with the stigma related to bankruptcy. A basic characteristic of human nature is that people are afraid of things with which they are not familiar. Do not count out bankruptcy as an option until you have taken a short time to get educated on the subject. The stigma against debtors has greatly diminished over the last 20 years, and there is no indication that debtors will be treated less favorably in the future. In fact, the ability to reestablish your credit after a bankruptcy is better than it has ever been before. Bankruptcy can remain on your credit report for up to 10 years, but you can start reestablishing your credit immediately.

First, let me define credit. Credit is your ability to borrow money. Many lenders determine whether or not to lend you money by examining your debt to income ratio; how much outstanding debt you have compared to your income. Remember that the reason that your credit is poor right now is because you have so much outstanding debt. Ask yourself, who would you rather loan money to; the person who has $20,000 in credit cards and could file a bankruptcy at any time, or the person who has already filed bankruptcy, has no remaining debt, and could not file another bankruptcy for another eight years. Many of my clients are able to purchase a vehicle on financing the day they receive their bankruptcy discharge. Often times you will pay a percentage point or two higher than a person with unblemished credit, but ask yourself how low of an interest rate would you be able to get in your present situation. You should be able to finance a home within two years after receiving a bankruptcy discharge, as long as you can provide a minimum down payment and show the ability to make the monthly mortgage payment. Many consumer debtors receive credit card solicitations within months of receiving a bankruptcy discharge. We caution you against rumors of the bankruptcy stigma that you may hear from friends or family, who may not possess the knowledge of bankruptcy law necessary to give legal advice. They may have your best interests in mind, but a little knowledge is a dangerous thing.

Daniel W. Nieroda, Jr., Esq.