Bankruptcy


Sometimes, when there are no alternative means for overcoming financial problems, bankruptcy may be the only answer. Filing bankruptcy doesn't mean that you will lose your house or car. In fact, in most cases, you will be allowed to keep both personal and real property.


A
bankruptcy case does, however, stop ALL CREDITOR HARASSMENT, including telephone calls, wage garnishments, and all ordinary lawsuits. It will also temporarily stop the foreclosure of secured debts, such as a home mortgage, and the repossession of an automobile, mobile home, or other personal property. It will also temporarily prevent the marshall from evicting a person who files bankruptcy from an apartment.


I
n virtually all instances, bankruptcy results in the discharge of unsecured debts, such as credit card charges, unsecured lines of credit, and medical and doctor bills. This means that these debts will never have to be paid.


A person filing bankruptcy
 will still be required to pay child and spousal support. Certain taxes and student loans will not be discharged. But even in these instances, actions taken in the bankruptcy can often allow for a more favorable payment schedule of these debts.


I
f there are some creditors that you want to pay, this can be done at any time after filing, or any time in the future. Bankruptcy allows you to avoid paying a debt, it does not mean that if an individual wishes to "reaffirm" they cannot do so.


W
hile fraudulently incurred debts are not dischargeable, it is up to the creditor to raise this issue with the Bankruptcy Court, and since the law is intended to give debtors a "fresh start" it is not easy for creditors to collect under these circumstances.


T
here are four different types of bankruptcy -- Chapter 7, Chapter 11, Chapter 12 and Chapter 13. It is essential to retain a skilled bankruptcy attorney to determine which chapter is most appropriate and beneficial for you.

 

Chapter 7, often called a "straight" bankruptcy, is usually the best remedy for people who have mainly unsecured debts, and who are current on their house and car payments.


Chapter 11
, is usually reserved for businesses, or for individual debtors who wish to pay off their creditors, over time, but do not otherwise qualify for Chapter 13.


Chapter 12
, is limited to "family farmers" and is available to only a few individuals. It is similar in many instances to Chapter 13 and allows for repayment of debt over several years.


Chapter 13
, is for people whose homes are in foreclosure and it allows them to continue occupancy and to pay off all of the past due payments in a 3-5 year period, by means of regular monthly payments, in addition to their regular mortgage payments. Chapter 13 also allows for payments of overdue taxes.

 

Please feel free to call our office at (818) 224-4270 with any questions you might have, or to make an appointment to come to one of our free bankruptcy clinics, or for a free consultation.

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