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Basic Law on Chapter 7 bankruptcy:
Chapter 7 bankruptcy is a legal process under federal bankruptcy law that allows you to keep some property, wipe out some debts and get a fresh start when you cannot pay your bills.
Chapter 7 bankruptcy eliminates most kinds of unsecured debt such as credit cards; medical bills; most personal loans; judgments resulting from car accidents, business or personal disputes; and deficiencies on repossessed vehicles or homes. It is more than just a credit card bankruptcy and it’s different from chapter 13 bankruptcy, which is another form of debt relief and is explained on another page.
Many people think that you have to give up all of your property when you file a bankruptcy case. Just the opposite is true. Filing a bankruptcy case protects your property from creditors, with some limitations. You to typically keep all of your property you need to get a fresh start. As long as your car and mortgage payments are current, you can keep them. If they are too expensive, you can surrender them and wipe out any deficiency that you owe. In most cases, clients keep their home, car, personal belongings, tools, IRA, pension payments, wages, life insurance, but eliminate their debt. However, if you have significant equity in your property, you may need to file a chapter 13 case.
Stop Creditor Harassment.
One of the benefits of a bankruptcy case is the “automatic stay.” It is a court order that stops any creditor from taking any action to collect any debt from you without first getting permission from the bankruptcy court. The automatic stay will stop foreclosures, lawsuits, phone calls, written threats and car repossessions. As soon as you file your case, the creditors will be notified directly from the court and the calls, letters, threats, and lawsuits will stop.
Eliminate Repossession Debts.
If your car finance company repossesses you car and sells it at an auction, the highest bid may not be enough to pay off the debt on the car. In that case, you are responsible for the balance, which is called a 'deficiency balance.' If you file a chapter 7 bankruptcy, it can be wiped out like credit card debt and the others.
Stop Garnishments With Chapter 7.
A Chapter 7 bankruptcy is one of the most effective ways to immediately stop garnishments. Garnishments can attach to your bank accounts and personal property making it difficult for you pay for necessities. Filing bankruptcy in a Chapter 7 case stops the garnishment so you will be able to use your bank account and personal property without concerns that they may be taken from you.
End Lawsuit/License Suspensions.
If you are being sued, and you own a home, we strongly urge you to consider a Chapter 7 or another form of bankruptcy called a Chapter 13. They both have the automatic stay that stops a foreclosure or lawsuit immediately and prevents your creditors from placing a lien on your home or garnishing your property.
Rebuild Your Credit.
Your credit can be repaired after the case is completed. After the court closes your successful case, you can take steps that will overcome the damage to your credit score caused by the delinquencies and allow you to re-establish yourself as a good credit customer. The ability to reestablish your credit after a bankruptcy is better than ever.
One of the obstacles to a high credit rating is a lot of debt, or a lot of missed payments. Another measure of good credit is a low debt to income ratio. If you wipe out some of your debt, you immediately improve this ratio. Similarly, if you wipe out the debts, and no longer have an obligation to pay, there will no longer be any missed payments on current debt. The next obstacle is how to overcome the bankruptcy mark on your credit report and we can show you how to do that so your credit standing will improve.
Many clients purchase vehicles or homes with financing after the completion of their case. How soon they are able to do it varies, but we can show you how to repair your credit as fast as possible.
Keep Your House, Car and Personal Belongings.
Mortgage and automobile finance companies do not want your house or car. They are in the lending business, not the real estate or car business. They’d rather have your current monthly payments both before and after a Chapter 7 bankruptcy. As long as you keep current with your payments, you can keep your property. If you are behind, you can catch up and reaffirm your debt. When you do, the finance company knows that your other debts are being wiped out or greatly reduced, you cannot file Chapter 7 or 13 again for another eight years, and they can continue to collect the principal plus interest under the original loan agreements. Request Free Information
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