The Bankruptcy Code provides real relief for individuals who have run out of financial options and can protect the debtor from creditor collection action even at the last minute. By filing an emergency bankruptcy petition a debtor can stop a foreclosure or other legal action dead in its tracks.
When a debtor files a bankruptcy case all creditor collection action must cease immediately and automatically. The bankruptcy automatic stay stops foreclosures, repossessions, garnishments, the commencement or continuation of nearly all lawsuits, and other creditor collection action dead in its tracks. Because the effect of the automatic stay takes place immediately upon filing of the bankruptcy petition, it is not uncommon for a debtor to seek bankruptcy protection on the eve of a foreclosure, repossession, or other legal action. A bankruptcy filing mere minutes before a foreclosure sale or lawsuit will stop the action or void the sale or judgment.
Waiting until the eleventh hour to seek out a bankruptcy attorney can be dangerous for the bankruptcy debtor. First, the Bankruptcy Code mandates that to be eligible to file a personal bankruptcy the debtor must first complete a session with an approved credit counseling agency. It is challenging to have an initial meeting with a bankruptcy attorney and complete this counseling on the same day you file bankruptcy. The bankruptcy courts waive this requirement only under the most extreme emergency situations when credit counseling was not available to the debtor. While it may seem that your case is an emergency situation, chances are that a waiver request will be denied.
Second, your bankruptcy attorney must explore your finances with you and will require information that you may not be able to provide at the initial meeting. Your attorney needs information in order to protect your assets with legal exemptions and identify potential problems with property transfers. Certain financial dealings may unknowingly thrust friends, family members, or business partners into your bankruptcy case.
Filing an emergency bankruptcy petition can stop creditors in their tracks, but it can also present potential problems for the debtor. If you are considering a bankruptcy filing to protect your property, consult with an experienced attorney as early in the process as possible. Your bankruptcy attorney can explain how the federal bankruptcy laws can help your family and identify any areas of concern.
Showing posts with label repossession. Show all posts
Showing posts with label repossession. Show all posts
Wednesday, October 20, 2010
Tuesday, June 29, 2010
Buying A Car During Bankruptcy
There are a surprising number of options for a debtor to retain possession of a vehicle during bankruptcy. Choosing the best option depends on several factors including your ability to pay and the condition of your vehicle. In some cases the best financial option is to surrender your vehicle back to the bank and purchase a different one.
Years ago it was unheard of for a debtor in an active bankruptcy to obtain an auto loan. Several years ago two companies, 722 Redemption Funding, and Fresh Start Loan Corporation, began making auto loans to debtors in bankruptcy, and now many banks have lending programs for debtors. The attitude towards bankruptcy has changed and many debtors are evaluated more on their future ability to pay the loan rather than their past financial trouble.
Obtaining an auto loan during bankruptcy is a matter of showing stable income, a good debt-to-income ratio, and some assurance that your current financial trouble is unusual and not likely to reoccur. All lenders require a loan application and the criteria for approval can vary significantly. Some lenders will not approve a loan if you have had a prior repossession. Other lenders want a substantial down payment. New auto loans often want the bankruptcy discharged before approving the loan. In all cases your vehicle choice will be restricted to a newer vehicle with low miles.
During a Chapter 7 bankruptcy the debtor and the lender are free to negotiate terms outside of the bankruptcy case. The loan is not a part of the case and is not affected by the bankruptcy discharge. For Chapter 13 debtors, any new indebtedness must be approved by the trustee and the court. In most cases the Chapter 13 debtor can obtain approval after a showing of need and ability to pay.
If you are considering bankruptcy and need to buy a different vehicle, consult with an experienced attorney. There are many different options during bankruptcy for retaining, refinancing, or purchasing a different vehicle. Call today and get the information you need to drive your financial future.
Years ago it was unheard of for a debtor in an active bankruptcy to obtain an auto loan. Several years ago two companies, 722 Redemption Funding, and Fresh Start Loan Corporation, began making auto loans to debtors in bankruptcy, and now many banks have lending programs for debtors. The attitude towards bankruptcy has changed and many debtors are evaluated more on their future ability to pay the loan rather than their past financial trouble.
Obtaining an auto loan during bankruptcy is a matter of showing stable income, a good debt-to-income ratio, and some assurance that your current financial trouble is unusual and not likely to reoccur. All lenders require a loan application and the criteria for approval can vary significantly. Some lenders will not approve a loan if you have had a prior repossession. Other lenders want a substantial down payment. New auto loans often want the bankruptcy discharged before approving the loan. In all cases your vehicle choice will be restricted to a newer vehicle with low miles.
During a Chapter 7 bankruptcy the debtor and the lender are free to negotiate terms outside of the bankruptcy case. The loan is not a part of the case and is not affected by the bankruptcy discharge. For Chapter 13 debtors, any new indebtedness must be approved by the trustee and the court. In most cases the Chapter 13 debtor can obtain approval after a showing of need and ability to pay.
If you are considering bankruptcy and need to buy a different vehicle, consult with an experienced attorney. There are many different options during bankruptcy for retaining, refinancing, or purchasing a different vehicle. Call today and get the information you need to drive your financial future.
Thursday, March 11, 2010
Popular Half-Truths About Bankruptcy
The internet is full of half-truths that feed the speculative fears of the evils of bankruptcy. Most of this information comes from sources outside the bankruptcy process, like debt counselors, or financial planners who often are selling alternatives to bankruptcy. The most commonly stated “reasons to avoid bankruptcy” are:
1. It will ruin your credit
2. You will lose property
3. Not all debts are eliminated
4. You may be subject to repossession or foreclosure
5. You may not be able to get a job
6. You cannot get credit
Those are serious allegations, so let’s look at them.
First, bankruptcy is typically a last-resort option, so the average bankruptcy filer’s credit is already ruined. The bankruptcy wipes the slate clean and stops future adverse reporting for past debts. In other words, if you are 120 days late on a credit card, your credit report will continue to show that you are 120 days late month after month. A bankruptcy stops that reporting from the day you file your case so your credit can improve.
Second, it is exceedingly rare that a debtor loses property unexpectedly. When it happens it is generally the result of poor communication with the client. In all other cases the debtor will only lose property that is voluntarily surrendered, meaning the debtor has made a financial decision to not keep a house or car.
Third, there are actually very few debts that cannot be eliminated. The most common types are child support, some IRS debts, and student loans. However, even these non-dischargeable debts can be managed within the bankruptcy.
Fourth, the bankruptcy automatic stay will stop any foreclosure or repossession. If the creditor wants to take possession of the property after the bankruptcy filing, it must petition the bankruptcy court for permission.
Fifth, it is against the federal law to discriminate against a job applicant solely on the basis of filing a bankruptcy.
Sixth, many bankruptcy debtors have rebuild their financial lives within a year or two of the bankruptcy filing. It takes time and effort to rebuild, but there are no past debts to drag you down!
Don’t get your bankruptcy information from internet sources that use scare tactics and half-truths. Talk to an experienced bankruptcy attorney and get the facts. Find out how bankruptcy can solve your debt problems today.
1. It will ruin your credit
2. You will lose property
3. Not all debts are eliminated
4. You may be subject to repossession or foreclosure
5. You may not be able to get a job
6. You cannot get credit
Those are serious allegations, so let’s look at them.
First, bankruptcy is typically a last-resort option, so the average bankruptcy filer’s credit is already ruined. The bankruptcy wipes the slate clean and stops future adverse reporting for past debts. In other words, if you are 120 days late on a credit card, your credit report will continue to show that you are 120 days late month after month. A bankruptcy stops that reporting from the day you file your case so your credit can improve.
Second, it is exceedingly rare that a debtor loses property unexpectedly. When it happens it is generally the result of poor communication with the client. In all other cases the debtor will only lose property that is voluntarily surrendered, meaning the debtor has made a financial decision to not keep a house or car.
Third, there are actually very few debts that cannot be eliminated. The most common types are child support, some IRS debts, and student loans. However, even these non-dischargeable debts can be managed within the bankruptcy.
Fourth, the bankruptcy automatic stay will stop any foreclosure or repossession. If the creditor wants to take possession of the property after the bankruptcy filing, it must petition the bankruptcy court for permission.
Fifth, it is against the federal law to discriminate against a job applicant solely on the basis of filing a bankruptcy.
Sixth, many bankruptcy debtors have rebuild their financial lives within a year or two of the bankruptcy filing. It takes time and effort to rebuild, but there are no past debts to drag you down!
Don’t get your bankruptcy information from internet sources that use scare tactics and half-truths. Talk to an experienced bankruptcy attorney and get the facts. Find out how bankruptcy can solve your debt problems today.
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