Warning Signs to Know if Bankruptcy May Be An Option
Bankruptcy is a Federal Law that helps people who have accrued too much debt to repay. Most of my clients are hard-working individuals who have found themselves in financial difficulty due to unemployment, sickness or divorce. Bankruptcy can help you get a fresh start and achieve financial freedom.
The Most Common Signs to Look For to Consider Filing for Bankruptcy1. Your Debt Never Seems to Go Down.
If you are paying the minimum monthly payment on your credit cards, or not making your payments at all, Bankruptcy will help to either totally eliminate the debt (discharge) through a Chapter 7 Bankruptcy or do a repayment plan through a Chapter 13 Bankruptcy. If you debt never seems to go down, then Bankruptcy may be an option for you.
2. Your Creditors are Constantly Harassing You About Your DebtIf you are getting harassing phone calls, letters or law suits filed against you, Bankruptcy would help stop ALL collection activity against you. Once you file for Bankruptcy, you are under the protection of the Automatic Stay of Proceedings which makes it illegal for your creditors to call, send letters or sue you. All creditors are aware of the Automatic Stay and once they receive notice of filing from the court, the collection activity will stop. If your creditors are harassing you, then filing for Bankruptcy may be an option.
3. You are Facing Foreclosure of Your Home and/or a Sheriff SaleNothing can be more stressful than the possibility of losing your house in a Sheriff Sale. Chapter 13 bankruptcy will stop foreclosure proceedings and permit you to keep your house. It will also stop a sheriff sale if the bankruptcy is filed before the date of the sale. Chapter 13 bankruptcy will allow you to file a three-year or a five-year repayment plan to catch up on your mortgage arrears. You are required to resume regular monthly mortgage payments directly to your mortgage company once the case is filed and also make an additional “catch-up payment to the Court to become current on the mortgage. Trustee to become current on your mortgage arrears. If you make all of your required payments, at the end of the three or a five-year repayment plan, you are current on your mortgage. The mortgage company must accept the payments and cannot foreclose while you are in Bankruptcy, so long as you make all of your payments on time. If you are faced with the possibility of losing your home, Chapter 13 Bankruptcy may be appropriate for you.
4. My Car is Going to be Repossessed / My Car Was RepossessedChapter 13 bankruptcy will allow you to keep your vehicle from being repossessed or it will allow you to get the vehicle back if it was recently repossessed.. If you are behind on your car loan and facing repossession, filing for Chapter 13 bankruptcy immediately stops any repossession proceedings and will let you catch up on your car payment over a three or five-year payment plan with the Court. If your vehicle was recently repossessed, filing for Bankruptcy before the car is sold at auction will allow you to regain possession of the car. You will be required to make monthly car payments directly to the lender, plus a catch-up payment to the bankruptcy court to catch up on your car loan arrears.. You may also choose to put the entire loan into the Chapter 13 repayment plan and you would make one payment to the bankruptcy court to pay for the vehicle. Many times, filing for Chapter 13 Bankruptcy may actually lower your monthly payment on your car loan by stretching out the loan over a longer period of time. Additionally, if you owe more on the vehicle than its fair market value, you may also be able to do a “Cramdown” in which you only pay the market value of the car, plus interest through the bankruptcy repayment plan. Any money owed over the market value would then be discharged by the Bankruptcy Court. if your vehicle is in danger of being repossessed, or if it was recently repossessed, Bankruptcy may be an option.