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Struggling with Debt? What You Should Know to Avoid Making Things Worse…

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Good people find themselves deep in debt for a lot of reasons:  Job loss, health issues, and divorce are common reasons for debt problems.  We see people try all kinds of ways to try to stay ahead.  Here are some things that you should NEVER do:

Do not take out a second home mortgage to pay debts.  This transfers unsecured debts to secured debt attached to your home. If you cannot make payments your creditor will foreclose on your home. It is possible to protect your home in bankruptcy.

Do not pay debts using your retirement savings account.  Retirement accounts are protected through a bankruptcy filing.

Do not max out your credit cards to stay afloat.  Recently incurred charges may not be able to be discharged through a bankruptcy filing.

Do not transfer your home to another person to avoid having a lien placed on your property.  Call us first to discuss any such transfers.

Bankruptcy is not the end of the world.  There are hundreds of thousands of bankruptcy filings in the United States each and every year.

Here are some thoughts of things to do when filing for bankruptcy.

Do consider this decision very carefully.  Under Chapter 7 you will only be able to receive a discharge every 8 years.  There are other options if you have filed within the last 8 years and are struggling.  Contact us for a free consultation.

Do follow the advice of your attorney.  At our office we have over 55 years of combined experience and will be able to guide you to make sure your bankruptcy is as painless as possible.

Do be honest in all of your answers on the petition.  Be sure to list all assets and not leave anything out. We can usually protect your assets with full disclosure and some pre-planning.

Do be sure to list all of your creditors on your petition.

Do close any bank accounts with which you have credit lines or credit cards.  This will prevent the account from being seized by the creditor.

Bankruptcy is a serious decision and should not be taken lightly.  Contact our office for your free consultation to discuss your individual situation to see if bankruptcy is the right decision for you.

 

 

CHAPTER 13 BANKRUPTCY BASICS

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WHAT IS CHAPTER 13 BANKRUPTCY

Chapter 13 is designed for people who are behind on their mortgage payments who would like to save their home or their income is too high to qualify for Chapter 7.   Chapter 13 involves paying your disposable income to creditors over a 3 to 5 year period.  During this time you will make up any missed mortgage or vehicle payments.  Your unsecured creditors will be paid a percentage of what you owe them. Once you complete your case any remaining balance to unsecured creditors will be wiped out.  Creditors will not be able to collect on these debts in any way or form.  They will not be allowed to contact you by phone, mail or any other means.

WHAT IS DISPOSABLE INCOME?

To determine your disposable income we will need to know your income for the last six months.  We would then need to subtract your expenses from your income.  This includes all of your expenses such as food, rent or mortgage, vehicle payments, utilities, prescription drugs, car repairs, home maintenance or medical expenses.  We consider expenses you may not currently be spending on but it would be reasonable to do so such as health insurance, life insurance, or a retirement account.  If you have expenses not mentioned here we can count them so long as it is reasonable and necessary.  The difference between your present income and reasonable expenses is your disposable income.

WE WILL BE THERE FOR YOU

At your court hearing the trustee will evaluate the reasonableness of your expenses.  Our job as your attorney is to protect the money that is necessary for you to take care of yourself and family.

HOW MUCH WILL MY CHAPTER 13 PAYMENT BE?

 Your plan payment must will pay your mortgage arrearage over the next three years, your current mortgage payment (the 13 office would make your regular mortgage payment through the case),  your vehicle payment and a some amount for your unsecured creditors.

FREE CONSULATION

Every situation is unique.  We offer a free consultation with one of our attorneys to discuss your situation.  Your attorney will give you an approximate amount of  your Chapter 13 payment.