Things to Know When Filing For Bankruptcy

Part of my job in removing your debt is to inform you on what you should know when filing for bankruptcy. This may be a scary time, but with the right knowledge and legal assistance, it can be the necessary step to getting back on your feet and avoiding debt in the future.

Have a Foreclosure? Take Action Sooner Rather than Later.

In most cases, it is much better to file for bankruptcy before you lose your home to foreclosure. Not only does this give you more time to live in your home, but it can also help you to avoid paying the deficiency (the difference between your outstanding loan amount and your foreclosure sale price). Bankruptcy also cancels other mortgage debt, which can be helpful if you have a second mortgage or a HELOC (home equity line of credit).

Silence the Calls, Reduce Stress.

Once you have made the decision to declare bankruptcy, you will be able to let go of the stress that comes from collection calls. This is because, in a Chapter 7 (Liquidation) bankruptcy, you will no longer be obligated to pay your debtors and your debtors will no longer be able to attempt to collect from you. Remember, however, that bankruptcy cannot help to relieve debts from back taxes, child support, or student loans.

A Chapter 13 (Wage Owner) bankruptcy, will also help you to avoid collection calls, as you will be on a monthly payment schedule with the bankruptcy court trustee to pay back your debtors over an extended period. Learn more about these different types of bankruptcy here.

Stop Wage Garnishments Once Bankruptcy is Filed.

Along with ending collection calls, bankruptcy also ends wage garnishments. However, it is important to know that wage garnishments do not automatically stop. In most cases, it is both your and my responsibility to provide proper notification to all involved parties.

Stop Repossession and Get Your Car Back.

Bankruptcy can help you to avoid repossession and possibly even get your car back. This is because bankruptcy’s automatic stay forces creditors to end their collection attempts. If your car has been repossessed but not resold, you may have a chance to get your car back because the automatic stay will stop the sale. In this case, it is important that you act quickly and file bankruptcy immediately.

Hopefully, this has helped you to understand bankruptcy in more detail. If you have any questions related to these or other bankruptcy topics, please don’t hesitate to give me a call at either 316-263-6500 or 1-800-533-5454.