1. “Isn’t Bankruptcy just something you file for when you run out of money?”
No, in most cases, Bankruptcy Chapter 13 is filed to structure a repayment plan for all your secured and non-secured debt. Under Chapter 13 law, you are allowed to retain your property, but you agree to repay all or most of the debts you owe, over a 3 to 5 year span. In most cases, you will need to prove to the court that you have a reasonable means for repaying your debt, meaning that you have a sufficient and regular income available to you for the foreseeable future.
Immediately after filing for Chapter 7, you receive an “automatic stay,” which disallows creditors to continue calling you, garnishing your wages, repossessing property, emptying your bank accounts, or discontinuing your utility services. Most Chapter 7 bankruptcies are filed after the courts declare you are unable to file under Chapter 13, most likely because of the lack of sufficient and regular income.
2. “I can no longer afford the payments on my mortgage. Will my home go into foreclosure?”
Not necessarily. Because of the length of time and vexing nature of the foreclosure process, a lot of lenders might agree to a short sale, where you sell your home to a buyer for less than it would cost to cover the entire mortgage. Lenders in this case might release the lien against your home, and allow you to sell the house
– they might even forgive the remaining balance on the mortgage. Contact our office, Lester & Associates, at (516) 357-9191 for a free consultation to explore all of the options available to you during these difficult times.
3. “If all I have to do is file for Bankruptcy, then I don’t need an attorney to represent me!”
This is an extremely naïve statement. Because of the nature of creditors and their tenacity to recover your debts, a lot of times after you file for Bankruptcy, creditors will file a lawsuit claiming that you fraudulently made purchases, with no intent to ever repay the debt. This pertains mostly to credit card debt accrued right before the filing for Bankruptcy. If you do not have a strong advocate on your side to represent
you when these adversary proceedings are brought against you, your Bankruptcy filing may be thrown out, leaving you back where you started in debt. It is important to call an expert attorney to guide you through all of the processes in the Bankruptcy laws. Calling Lester & Associates is integral to outcome of your Bankruptcy filings. Call (516) 357-9191 today for a free consultation!
4. “After filing for Bankruptcy, I won’t be able to get a credit card again, right?”
Not exactly true. According to US News, low limit, secured credit card offers can arrive in the mail soon after your debt is discharged following your Bankruptcy filing. These types of offers allow you to secure credit card transactions with a cash deposit to a financial institution, and also allow you to start to rebuild your credit.
5. “I heard I can’t file for Bankruptcy if I have a job. Is this true?”
Not at all. The “means” test, determines whether you are eligible to file for Chapter 7 Bankruptcy, or if you must file for Chapter 13. Chapter 13 Bankruptcy offers a reduction and/or reorganization of payment to creditors, and usually fits persons who have are employed with a steady income, allowing them to file
for bankruptcy to consolidate and structure payments to creditors who are owed. This helps people who are in debt of up to $1,149,525 in secured debt, and $383,175 in non-secured debt. Secured debt refers to debt that is backed by some form of collateral; a house, car, land, etc.