Bankruptcy Is Still An Option!
Why Do People File Bankruptcy?
- Job loss
- Catastrophic medical bills
- Parents who have assisted adult children with their financial problems
What Can Bankruptcy Do For Me?
- Stop foreclosure actions and allow an opportunity to catch up on missed payments.
- Prevent repossession of a car or other property, or force the creditor to return property even after it has been repossessed.
- Stop wage garnishment and other debt collection harassment.
- Restore or prevent termination of certain types of utility service.
- Lower the monthly payments and interest rates on some debts.
- Provide an opportunity to challenge the claims of certain creditors.
How Do I Declare Bankruptcy?
Before filing, debtors must participate in a credit counseling briefing with a court-certified counseling service. This can be done on the internet or by telephone. We will provide a list of certified counselors.
Will I Lose All My Property?
In a Chapter 13 bankruptcy, the bankruptcy trustee has a different job. The Chapter 13 trustee receives your Chapter 13 plan payments and distributes them among your creditors. Chapter 13 debtors may usually keep even non-exempt assets while making their plan payments.
What Else Do I Have To Do After Filing?
May I File My Own Bankruptcy Petition?
What Kinds Of Bankruptcy Are Available?
Chapter 7 is sometimes called “straight bankruptcy.” In Chapter 7, all unsecured debts (debts for which there is no collateral that could be repossessed) are discharged. Debts secured by collateral are treated differently, depending on the kind of property and the debtor’s intentions concerning the property.
In Chapter 13 bankruptcies, the debtor makes a plan to repay debts over a period of three to five years. Unsecured debts may be paid at a percentage of the debt owed. There are several ways of treating the payment of secured debts in a Chapter 13 plan.
When To Consider Filing Bankruptcy
Bankruptcy is intended to help honest debtors get a fresh start, but there is no hard and fast rule on who will benefit the most from filing for bankruptcy. These are some of the warning signs that I look for when advising a potential client that it may be time to file for bankruptcy:
- Struggling to make rent or mortgage payments. When someone is faced with mounting bills, some debtors will play Credit Card Shuffle, randomly choosing which minimum payment to make based on how nasty the collection call will be. Some debtors will even pay credit card bills before paying their rent or mortgage rather than face those harassing collection calls. This is simply wrong. Food and shelter should take priority over credit card debt.
- Stress. Are you losing sleep or constantly arguing with your spouse because of your debt problems? Money problems are a leading cause of divorce. Bankruptcy is not a cure all, but it can help remove your financial problems as a source of difficulties and stress in your marriage.
- Health. Far too many clients lose sleep and suffer stress-related health problems because of their financial struggles. A willingness to work multiple jobs or crazy overtime hours may be a sign of good character, but it can lead to burnout, exhaustion and anxiety.
- Changes in your normal behavior. Are you considering doing something illegal to fix your debt problems or something that could put your health or the health of your family at risk? Have you taken up gambling or drinking? Are you doing things that are “out of character” for you? These may be signs of desperation and it may be time to see an attorney.
- The Balance Transfer Shuffle. Are you constantly applying for new credit cards to take advantage of low balance transfer rates? This may be a sign that you are in over your head in debt.
What Bankruptcy Can't Do
- Eliminate certain rights of secured creditors. Although a debtor can force secured creditors to take payments over time in the bankruptcy process, a debtor generally cannot keep the collateral unless the debtor continues to pay the debt.
- Discharge types of debts singled out by the federal bankruptcy statutes for special treatment, such as child support, alimony, student loans, certain court ordered payments, criminal fines, and some taxes.
- Protect all cosigners on their debts. If relative or friend co signed a loan which the debtor discharged in bankruptcy, the cosigner may still be obligated to repay that part of the loan not paid during the bankruptcy case.
- Discharge debts incurred after bankruptcy has been filed.
Which Form Of Bankruptcy Should I Use?
If your income is greater than the amount allowed for a Chapter 7, if your mortgage lender is about to foreclose, if you have debts assigned to you in a divorce, or if you have filed a Chapter 7 bankruptcy within the last 8 years, a petition is filed under Chapter 13.
Do I Have To Go To Court?
When Will My Debts Be Discharged?
How Will Bankruptcy Affect My Credit?
Bankruptcy Terms & Definitions
This is the term given to someone who owes creditors and files for bankruptcy. Once your case is filed, this term will apply to you.
This is any person that you owe. It may be a bank, finance company, hospital, retail store, credit card company or an individual.
Is a creditor who has a lien on some property that you own. A lien gives that creditor certain rights in the property ahead of other creditors.
Is a rule of the Bankruptcy Code that prevents a creditors from taking any action to collect their debt or taking any action against a debtor’s property. It begins on the day your case is filed. Creditors may ask the Court for “Relief from the Automatic Stay” by filing a Motion. If granted, such a Motion would generally permit them to repossess property.
Is a court order that says that you owe a creditor money. It may also order that certain property may be sold to pay that creditor.
Is a lien on property that is created when a creditor sues you.
Is a lien created by the IRS, State or other taxing authority. It is similar to a judgment lien.
Is the amount of money or the value of property you are allowed to keep in bankruptcy without paying for it. With some exceptions, exemptions may generally be applied only to property that is not subject to a creditor’s lien.
Is the person who will supervise your case. The trustee is responsible for ensuring that you have done everything that you are supposed to do to comply with the Bankruptcy Code. He or she also sells assets that are not exempt and distributes money to creditors.
If a debt is discharged you will not be required to pay it. However, a secured creditor may collect from property that is subject to its lien, such as a house or car. The primary purpose of a bankruptcy is to discharge most debts in order to give the debtor a fresh start.
Why Should I Retain Penny Souhrada As My Bankruptcy Attorney?
I am an Iowa Bankruptcy Lawyer, practicing law since 1994 and bankruptcy law since 1998. I am a member of the National Association of Consumer Bankruptcy Attorneys (NACBA), the only organization dedicated to providing legal services to consumer debtors. I have attended more than 200 hours of continuing education to ensure complete understanding and compliance with the law.
The decision to file bankruptcy is not an easy one, but it is my goal to make the process as painless as possible for you.