CONSUMER BANKRUPTCY
“We are a debt relief agency. We help people file for bankruptcy.”
The above language is by the revised Bankruptcy code which took effect in October of 2005. The new code also instituted certain income limitations on filing for Chapter 7 Bankruptcy and an additional requirement is that, now all filers for all chapters must complete a pre-bankruptcy credit counseling course.
Sometimes your debts or financial obligations can become overwhelming. The loss of a job, a divorce, an illness or an accident can put you in a situation where your debts have become insurmountable. If you miss a payment or two, your credit card issuers often raises your rate to a default rate, usually 29.99%. Try as you may, it can seem like you just cannot get out from under a mountain of debt. If you have creditors making harassing telephone calls, calling you at home or at work or perhaps you have even been served with lawsuits, have had your wages garnished or even a levy against you bank accounts, the time has come to consult with us.
You owe it to yourself to at least find out what options you have, including personal bankruptcy with a private, complimentary confidential consultation with an experienced bankruptcy attorney.
CREDIT AND BANKRUPTCY
Many times, clients have come to see me with debt over their heads they are getting harassing phone calls and even lawsuits have been filed against them by their credit card companies and they often ask, “Won’t bankruptcy ruin my credit?” I tell them that in fact, typically, a Bankruptcy discharge usually raises their credit score by several points. Banks and other creditors lend money based on a calculated risk. The risk factor is generally determined by your credit score. If you owe a lot of creditors and are delinquent or are in collection or even being sued or are charged off, you are a terrible risk to lend more money to, but if you discharge those obligations, dismiss those lawsuits and collection accounts in a bankruptcy, then you become a better risk and typically over time, as you rebuild your credit you become an even better risk. It is not unusual for my clients who have been through a bankruptcy to obtain a mortgage to purchase a new home three to four years after a discharge in Bankruptcy, if you rebuild your credit and have the income to qualify.
Banks borrow money from the Federal Reserve for a very low interest; typically less than 2% and lend it out to you at a much higher rate, typically at 15-29%. They have already calculated a default risk factor for loans that will not be repaid. Once you obtain a discharge from the Bankruptcy Court, you no longer owe those discharged debts and you become a much better credit risk. There are also no federal or state income tax consequences from a discharge in Bankruptcy, whereas, if you settle a debt for 50 cents on the dollar, the banks report the balance written off to the IRS as income to you.
IT’S YOUR CONSTITUTIONAL RIGHT to seek protection from the bankruptcy courts. The U.S. Constitution specifically grants Federal authority over bankruptcy matters. Many household names have filed for Bankruptcy protection including Friendly’s Ice Cream, Trump Taj Mahal Casino, Delta Airlines, Continental Airlines, U.S. Airways, Texaco, the Texas Rangers Baseball Team, Eddie Bauer, Six Flags Amusement Parks, Samsonite, Abercrombie and Fitch, General Motors and Chrysler, just to name a few. If these corporate giants can seek protection in the Federal Bankruptcy Courts, are your rights any less important? We don’t think so.
FORECLOSURE AND BANKRUPTCY
If you are behind in your mortgage or even in foreclosure, the bankruptcy laws can allow you to stop the foreclosure and restructure your debt to pay the arrears off over up to a 5-year period or otherwise restructure your mortgage without losing your home. The bankruptcy laws allow for fairly generous exemptions (property you can keep). Depending on the equity you have in your house, you can usually keep your home, you car and all your household furnishings along with your retirement accounts up to $1,255,000.00.
EXCEPTIONS TO DISCHARGE
Generally, you cannot discharge student loans, child support, alimony and Federal Income taxes that are less than three (3) years old. There are some other exceptions, including debts incurred by fraud and injuries caused while driving while intoxicated.
Call or email us now to make an appointment for a free, confidential consultation.
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