If you are struggling with debt, you might consider filing bankruptcy to alleviate the issue, especially when facing the loss of property. This isn’t the right option in every situation, and you should discuss it with an attorney before making a decision. In some scenarios, however, filing can relieve your burden and position you for a brighter financial future.
When an Attorney May Recommend Filing Bankruptcy
1. Home Foreclosure
Filing bankruptcy can stop all legal actions, including foreclosure. Chapter 13 bankruptcy may allow you to catch up on mortgage payments and continue living in your home. It’s possible to file an emergency petition and submit the additional forms needed later. If the borrower files for bankruptcy before the foreclosure sale, an automatic stay goes in place, which stops the lender’s collection efforts during the proceedings.
Your bankruptcy attorney can negotiate with your landlord to resolve your past due rent issues after filing bankruptcy. If you have high unsecured debts, such as credit cards and signature loans, Chapter 7 provides a discharge without making any payments. With more cash available after bankruptcy, paying your rent becomes easier. However, bankruptcy cannot stop a court-ordered eviction; it must be filed before any judgment from the courts for the automatic stay to apply.
3. Vehicle Repossession
If you file Chapter 13 bankruptcy, your lawyer could use cramdown provisions to reduce payments to your creditors for items such as car loans. If you owe $15,000 on your vehicle, for example, but its value is only $7,000, a cramdown can reduce your loan to $7,000. This only applies if you bought the car more than 910 days ago. Cramdowns lead to reduced interest rates, extended payment times, and lower payouts for loans.
If any of these situations apply to you and you want to evaluate bankruptcy options with an attorney, consult with the team at Hurtt & Johnson. Applying over 40 years of legal experience, the lawyers help residents throughout Dalton and northwest Georgia improve their financial standing. They have experience with Chapter 7 and 13 bankruptcy and will also review alternatives to assist you in making an informed decision. Visit the firm online for more information about the firm, and call (706) 226-5425 to schedule a free initial consultation to discuss filing bankruptcy.