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The Great Things about Chapter 13

Most people come in to our office wanting to do a Chapter 7.  They think it’s the best thing possible because it lets them cancel all their debts. While for some people, that’s a good thing, for others it can cause a lot of problems.  I happen to think that Chapter 13 bankruptcies allow for the most flexibility which is why I believe that should a 13 be a good option for someone, they should definitely pursue it.  Below, I lay out a list of reasons why I believe a Chapter 13 is a great option for certain people.

Chapter 13 cases are great because:

  • The amount of money you repay to your creditors can be as little as 0%. While that sounds too good to be true, it is, depending on your individual situation of course.
  • You keep your stuff, unless you don’t want to.  You keep your house, your business, your car, etc.  No one is snooping around trying to find things to sell.  
  • You can amend a Chapter 13 during the case.  If your income goes down, you lose a job, or you just go out on maternity leave, the plan can be amended to accommodate those life changes.     
  • You can dismiss your case if you want.  You can literally just walk away. While that isn’t necessarily a good idea, you can do it, unlike in a Chapter 7 plan.
  • The automatic stay protects you for the entirety of your case.  You can’t be a victim of foreclosure or repossession if you abide by the plan.
  • If you’re behind on your mortgage, the amount you’re behind can be included in the plan and caught up over the course of the plan.  
  • If you have a really big interest rate on your car, the amount of the interest rate can be reduced to a lower rate.  
  • The IRS HAS to abide by the plan and let’s be honest, no one likes the IRS.
  • Your attorney’s fees are included in the plan.  You don’t have to come up with the money to pay your lawyer up front.  

Other advantages to Chapter 13s

If you do have to file a Chapter 13 case, you’re eligible for another Chapter 13 (should you need one) a whole lot sooner than you can if you had filed a Chapter 7.  In fact, its ok to file a second Chapter 13 two years from the filing of your first case.  

Generally speaking, a Chapter 13 is off your credit a whole lot sooner than a Chapter 7.  Usually, a 13 is gone two years after you complete a 5 year plan.

Unlike working with a debt settlement agent, your Chapter 13 Bankruptcy is enforced by the full weight of the federal court system.  ALL your creditors must abide by it or the face severe penalties. NO creditor can opt out and at the end of the Chapter 13 Plan, the debt you owe them is gone, one way or another.

In the end, a Chapter 13 case is a great way to get back on your feet after a period of financial difficulty.  Our attorneys have filed THOUSANDS of Chapter 13s and we have decades of experience successfully shepherding cases through the court.  Contact our office today for a free, no obligation consultation to find out of you qualify for a Chapter 13 case.  

Bankruptcy: How it Affects your Spouse

Marriage means much more than just living with someone, it means sharing a life together and that life includes your finances. Still, sometimes one spouse may need to declare bankruptcy to get out from under their debts, even if husband or wife does not. There are any number of reason why this may be the case.  The filing spouse may have racked up credit card debt as a college student or may have incurred medical expenses that the other spouse isn’t liable for. If you are married, you often can file for bankruptcy without your husband or wife. Even when you file and individual bankruptcy case, it may still have a profound effect on your non filing spouse.

How Bankruptcy can Affect your Spouse:

Generally speaking, if you are filing for an individual bankruptcy case, it will not have much of an effect on your spouse in many cases. One of the areas in which it may have an impact is If you have joint debts discharged in the bankruptcy. By doing this,  the bankruptcy may appear on your spouse’s credit regardless of whether they have filed.

Also, when you file for bankruptcy, it only eliminates your personal debt, but your husband or wife is still obligated to pay back their own debts and any joint debts that they may be on with you. Your creditors can pursue legal action against your spouse to collect your joint debts once you have filed for bankruptcy. While this past statement is true if don’t life in a community property state, if you do live in a community property state and discharge the debts you owe jointly with your spouse, the creditors cannot pursue collections against your marital community property after your bankruptcy. In this case, your spouse benefits from discharge of your joint debts.

Filing for Chapter 13 bankruptcy protection can protect your spouse from creditors with the Co-Debtor stay. A Co-Debtor protects the debtor against almost all types of debt collection activity by virtue of you having filed for protection yourself. A chapter 13 also prohibits creditors from pursuing your co-debtors during the course of your bankruptcy. However, in a chapter 7 bankruptcy, the co-debtor stay is not included. At that point a collector will not be able to collect the debt from you, but it can collect it from your spouse.

Finding Financial Freedom:

Filing for bankruptcy is a last resort for many and a challenging process for everyone, especially if affects your loved ones. Understanding what your options are helps you both make good decisions that can get you back on the road to financial prosperity and security. If you are considering filing bankruptcy, contact our experienced bankruptcy attorneys today so they may explain the different options you have available to you under the law. Harmon and Gorove has helped thousands of families recover from difficult financial situations over the course of the last 35 years.  Contact our office today for a free, no obligation consultation.

The Automatic Stay: A Saving Grace in Bankruptcy

Tens of thousands of Americans struggle with credit card debt, medical expenses, mortgages and other bills each day. Many of those people have been contacted by creditors in increasingly predatory and harassing ways about late and delinquent payments. Many businesses have probably even turned your unpaid and deficient amounts over to a collections agency. Many of these collections agencies contact you at the most inconvenient times or in the most inconvenient places such as your work, or at dinner time after a long day away from your family.  They are often ruthless in hounding you and over time may become more and more aggressive towards you in an attempt to collect from you. The best way to stop all of these harassing collection attempts is to file for a Chapter 7 bankruptcy. Filing a Chapter 7 Bankruptcy will stop all collection attempts while your attorney works out the details of your debts with the trustee, this is called the automatic stay.

The best thing about a Chapter 7 Bankruptcy is the automatic stay.  The automatic stay is issued to your creditors once your bankruptcy case is filed in the courts. When meeting with your attorney it is extremely important to include a complete and total list of who your creditors are, their address and phone number and how much you owe them in your bankruptcy petition. Doing this will ensure that these agencies receive notice to stop attempting to collect on your debt and to leave you alone. Once the automatic stay is in place, collection agencies can’t contact you, they must stop garnishing your wages and can no longer initiate or pursue lawsuits. Many of our clients often feel a deep sense of relief their case is filed and the threatening collector calls stop.

During, before and after the automatic stay bill collectors are also banned from taking certain actions including making threats, calling you at extremely late or very early hours, using profane language, increasing debts beyond the terms of the contract and threatening to have you arrested if you don’t pay their balance. These are protections afforded to you by the Fair Debt Collection Practices Act. If you feel that your right have been violated or you are tired of receiving the harassing phone calls and letters, being served with lawsuits or having your hard earned wages garnished, call one of the experienced attorneys at Harmon and Gorove.  They can help you find the right debt relief options for your situation and customize a plan to help get you out of debt for good. We offer convenient appointments and our consultations are ALWAYS free.