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When it's necessary to file bankruptcy. A wide variety of circumstances can place virtually anyone in a precarious enough financial situation that may merit filing bankruptcy. A business or individual can declare bankruptcy once they have ascertained that it is impossible to pay off their creditors. It can give them a chance to start over from a financial point of view, as most debts are relieved after bankruptcy has been filed. There are consequences, however. Understandably, this can be a very scary thought for most individuals; fortunately, there are a number of resources available to help you. A good start to understanding what your financial options are is to contact one of our experienced attorneys.

There are numerous types of bankruptcy. For most individuals, bankruptcy claims will either be filed as Chapter 7 or Chapter 13 bankruptcy. Under Chapter 7 bankruptcy, individuals sell of their assets in order to pay off their creditors. In most cases, there are some debts that cannot be discharged and must be paid, including tax obligations, criminal fines, alimony and child support payments or other secured debts. Certain assets like automobiles, retirement funds, and homes may be exempt from the sale of assets. By consulting with one of our bankruptcy attorneys, you can find out all the specific actions possible regarding your unique assets and debt obligations.

Chapter 13 bankruptcy, which is entirely different from Chapter 7, allows for the restructuring of an individual’s finances in order to meet creditors’ demands, as well as generally reduce the amount of harassment and threats from creditors. In Chapter 13 cases, an attorney will work with a court-appointed Trustee in ensuring all of your debt obligations can be repaid over the given period of the restructuring plan.

There are some important things homeowners need to know about foreclosures. Bankruptcy can also be used as a tool in foreclosure defense. If you are about to be sued for foreclosure, or have already been sued for foreclosure, contact an attorney immediately. Bankruptcy law is federal law and trumps the state foreclosure law suit against you and your home. In federal bankruptcy law, the instant of bankruptcy is filed in federal court, section 362, of United States Code, Title 11, protects the debtors or homeowners from any further state court foreclosure proceedings as the initial bankruptcy process gets underway.  This is important, because the bankruptcy process can stop a home from being foreclosed upon, stop a foreclosure judgment being rendered against the home, stop a home from being sold in a foreclosure sale, stop a home from being repossessed by the bank, stop the homeowners from being evicted from their home, and also stop any other state court or collection proceedings by not only the mortgage lender, but by any and all creditors included in the estate of the homeowners in their bankruptcy case. 

Bankruptcy is a very important tool for three reasons.  First, the process gains a considerable amount of time for homeowners to explore loan modification or other options with the lender and it brings the lender to the bargaining table. Secondly, the process keeps the homeowner in occupancy in a Chapter 13 bankruptcy and in possession of their own home during this process. Thirdly, many homeowners believe that they can merely walk away from their home and let it be foreclosed upon and that the problem is solved.  Nothing could be further from the truth!  Not only would the homeowners lose possession of their property but the lenders could/would continue to pursue the homeowners for a judgment left over on their outstanding mortgage against them.

It is important for homeowners to seek the advice of an attorney early. Let us help you stay in your home and get rid of your debt. Call one of our experienced attorneys at 800-601-8148 for a free initial consultation. In the case of bankruptcy and foreclosure, knowledge is power!