Is bankruptcy the right decision?

Most clients will say that they waited too long to file bankruptcy and suffered sleepless nights, worry and anxiety for no reason at all. Don’t take our word for it, ask someone you know who filed bankruptcy and if it was the best thing they ever did. They quickly got a fresh start in life and have rebuilt their credit and moved on. You can not move forward with your life, employment, etc. with the debts holding you back. Bankruptcy quickly improves at situation that is already bad and needs to be fixed. Doing nothing about it is exactly that, doing nothing.

Many people fall prey to one of the many credit consolidation companies that make promises that are too good to be true and deceive you under the pretense that they are a "non-profit agency" or are somehow "affiliated with a government program." Only after paying a lot of money that they can not afford for months do they realize that nothing is being done about their debts and the lawsuits start coming in. Often people spend thousands of dollars over several months and years that they can not get back only to find out it went to "this fee, that fee, etc." and not to their debts. In reality the only thing that happens is that you delay getting a fresh start and you lose a lot of money without improving your situation. Before you commit to something like this just apply simple logic and math. As an example, if you owe $15,000.00 why would you pay $400.00 per month for 4 years (a total of $19,200.00)? Ask them very specific questions and see if you get a confident, logical and exact answers. Do your homework and investigate the company’s reputation thoroughly before committing to or signing anything. As a general rule of thumb you should be cautious about doing business with someone you can not meet in person.

If you can borrow enough money from a friend or family member and pay all of you debts that is the best option. Many past clients have used their retirement money hoping to get out of debt. All that usually ends up happening is that they now have taxes to pay or they have less money in their paycheck to pay back the loan or they have no retirement savings and a lot of the debts remain.3 of many examples are Henry Ford, Walt Disney and Abraham Lincoln. After filing bankruptcy, clearing up their financial problems and getting a fresh start they were able to move on to success in their lives.

Credit Card and Debt Relief

The bankruptcy laws allow you a fresh start in life. If your quality of life has deteriorated because you use all of your income to pay credit cards and debts, you can either erase your unsecured debt completely or propose a manageable repayment plan. There are options for dealing with late fees, interest, collection calls, threatening letters, court summons and lawsuits from creditors.

Stop Arrest Warrants

Courts routinely issue civil arrest warrants for people in debt who do not appear for court hearings. If a Court has issued a warrant for your arrest for failure to appear for a hearing on a collection lawsuit against you we can stop the constable or sheriff by quickly implementing bankruptcy protection for you.

Stop Wage Garnishments

When a creditor obtains a judgment against you and you fail to pay they can ask the court to order your employer to withhold and garnish from your paycheck. Bankruptcy can immediately stop this so that you are not forced to live on less money and not embarrassed at work.

Stop Foreclosure And Save Your Home

Filing a Chapter 13 bankruptcy can stop foreclosure of your home. Chapter 13 Bankruptcy allows you to pay back the past due mortgage payments in a way that you can afford to. Once the bankruptcy case is filed the foreclosure must stop. You can now get control over the situation and get back on track instead of the bank telling you what to do and refusing your payments.

Remove Second Mortgage from your Home

One of the benefits of a chapter 13 bankruptcy is that it allows you to remove your second mortgage from your home in some situations where the equity in your property is less than the balance of your first mortgage. Chapter 13 bankruptcies are complex and it is important to consult with an experienced bankruptcy attorney before filing bankruptcy.

Student Loans and Bankruptcy

Sometimes paying back student loans can become difficult or impossible if the monthly amount required is more than you can afford. Chapter 13 bankruptcy can offer some relief:

  1. The bankruptcy laws stop student loan companies from collecting while you are in chapter 13 bankruptcy which can be up to 5 years. You will not be forced to pay your student loans and can stop wage garnishments. You would propose an affordable payment and reduce payments to an amount that you can afford.
  2. If you have multiple student loans you can put all of them into the chapter 13 bankruptcy plan and have one smaller and convenient payment made through the chapter 13 bankruptcy trustee’s office.

Most bankruptcy clients with unaffordable student loans quickly receive relief from the bankruptcy court. Once the financial stress is gone they can now concentrate on their career and move forward with their lives.

Student loans are usually not dischargeable in bankruptcy unless you can prove undue hardship for you and or your family. Generally it is difficult to prove and only granted in extreme cases such as severe or permanent disability where repayment is not possible, all options have been exhausted, paying in the future will not be possible and you have made every good faith effort to pay back on the student loans. Interest will continue to accumulate and you will have to resume making payments on the remaining balances when your bankruptcy case is over.

7.2Anthony C. Bucacci