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Can I Stop Creditor Harassment by Filing for Bankruptcy?
Being in debt is a stressful situation, especially for those who have encountered financial difficulties that have affected their ability to pay what is owed while covering other ongoing expenses. If you are in this situation, you may be dealing with constant calls, letters, and threats from creditors and collection agencies, and you may feel helpless and overwhelmed as you attempt to deal with your financial issues and address your family's needs. Fortunately, there are legal measures you can take to stop creditor harassment, and in some cases, filing for bankruptcy may allow you to eliminate some or all of your debts.
Your Rights Under the Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act (FDCPA) is a federal law that regulates how creditors can contact and communicate with debtors. Under this law, you are protected from harassment by creditors, and you can take steps to address any harassing behavior. The FDCPA allows you to:
How Are Second Mortgages Handled in Consumer Bankruptcy Cases?
If you are like many people considering bankruptcy, the idea of losing your home is a major concern. While bankruptcy will allow you to eliminate some of your debts, the discharge of your home mortgage will allow the lender to foreclose on your home. You may be able to avoid this in certain situations, but if you also have a second mortgage on your home, you may be wondering how that debt will be treated in a potential bankruptcy case. The good news is that second mortgages can sometimes be eliminated or reduced through bankruptcy, depending on your individual circumstances and the type of bankruptcy you file.
Mortgage Loans in Chapter 7 Vs. Chapter 13 Bankruptcy
In a Chapter 7 bankruptcy, your first and second mortgages may be discharged entirely along with any other debts you owe. However, as mentioned, above, the lender or lenders may then pursue a foreclosure. Because of this, Chapter 7 is usually only an option if you do not plan to stay in your home.
When Can a North Carolina Bankruptcy Case Be Dismissed?
There are many situations where individuals who are in financial distress will need to seek relief from their debts and receive a fresh financial start. This can be done by filing for bankruptcy. However, not all bankruptcy filings automatically lead to successful debt relief. A bankruptcy case can be dismissed if the debtor fails to comply with certain requirements or if the court determines that bankruptcy relief is not the right solution for the debtor's financial situation. By understanding the reasons why a bankruptcy case can be dismissed, debtors can prepare to complete the process successfully. These reasons may include:
Non-Compliance with Filing Requirements
To file for bankruptcy, the debtor must complete and submit a number of forms and provide supporting financial documents. Failure to file all required forms and documents in a timely and accurate fashion may result in the dismissal of the bankruptcy case. Additionally, if the debtor fails to attend the mandatory meeting of creditors (known as the "341 meeting"), the court may dismiss the case.
How Can I Improve My Credit After Filing for Bankruptcy?
Filing for bankruptcy can be a difficult decision. Acknowledging that your debt has gotten out of control and that you need help to get your finances back on track is not always easy. However, bankruptcy can provide you with a truly fresh start. Eliminating your debts, including large credit card bills, medical bills, or other debts that have stacked up because of issues such as the loss of a job, can take away a huge burden and ensure that your family will be able to avoid serious financial problems in the years to come. Part of the fresh start following bankruptcy involves rebuilding your credit, which will help you qualify for loans or other benefits in the future. As you plan for your life after bankruptcy, there are steps you can take to improve your credit score.
Pay Your Bills On Time
One of the most important things you can do to rebuild your credit is to pay all of your bills before the monthly due date. In addition to making monthly payments on any loans you kept following your bankruptcy, such as a home mortgage or auto loan, you may want to set up reminders or automatic payments for other bills, such as utilities. Making prompt payments on a regular basis will show creditors that they can trust you and that you are responsible with money management—two qualities they look for when considering whether or not someone should receive loan approval. On the other hand, any late payments may cause your credit score to decrease further, affecting your ability to build your credit back up.
5 Common Myths and Misunderstandings About Bankruptcy
With the rising cost of living and high levels of consumer debt, bankruptcy is becoming a more popular option for Americans who are struggling to make ends meet. However, there are still many misunderstandings related to bankruptcy laws and procedures that can lead people to jump to conclusions and make uninformed decisions. In situations involving large debts, you will want to understand your rights and options, and with the help of an experienced bankruptcy attorney, you can take steps to avoid further problems and regain financial stability. Here are some common bankruptcy-related myths and the truth about how issues related to debt may be handled before, during, and after the bankruptcy process:
Myth 1: Bankruptcy Is a Sign of Failure
The truth is that receiving debt relief through bankruptcy is not an indication that you are irresponsible with your finances or that you have failed to properly account for your income, assets, and debts. Most people who pursue bankruptcy do so because of financial issues they have encountered through no fault of their own, such as unexpected medical bills or debts that occurred due to the loss of a job. Bankruptcy offers you the opportunity to get back on track financially. It provides relief from debts you cannot pay and gives you the chance to start fresh. With careful planning, it can be an effective tool in your overall financial strategy and provide much-needed relief in difficult times.
How Are Mortgage Loans Handled in a Chapter 13 Bankruptcy?
Filing for bankruptcy is a big decision, but it can be necessary in order to get back on your feet financially, especially if you have experienced difficulties that have made it impossible to make ongoing payments toward large debts. However, if you are a homeowner, you will likely be looking for solutions that will allow you to avoid foreclosure and keep your home. In many cases, Chapter 13 bankruptcy is the best option, but it is important to understand how mortgage loans will be handled in these types of bankruptcy cases.
What Is a Chapter 13 Bankruptcy?
A Chapter 13 bankruptcy is also known as “reorganization” because it allows you to reorganize your debts into manageable payments over three to five years. During this period, you will make payments to a court-appointed trustee, who will distribute the payments to different creditors. If all payments are made on time and according to the plan, the remaining unsecured debts may be discharged at the end of the repayment period. Through this method, you can eliminate debts like credit cards and medical bills. Unlike a Chapter 7 bankruptcy, Chapter 13 will not require you to turn over any property that you own, and this may allow you to protect the equity in your home.
The Means Test: Do I Qualify for Chapter 7 Bankruptcy?
People with significant debts may qualify for multiple types of debt relief, and in many cases, bankruptcy is the best option. Those who plan to file for bankruptcy will often choose to file under Chapter 7, since this will allow most types of debts to be discharged/eliminated within just a few months. However, debtors will need to meet certain requirements to qualify for debt relief under Chapter 7. One of the most important criteria is the means test, which measures a person’s financial situation to determine whether they have the ability to repay some of their debts.
What Is the Means Test?
The means test is used to determine if you have enough disposable income left over after paying essential expenses related to housing, food, transportation, etc. By looking at your income and expenses, the means test measures whether you have enough money in your monthly budget to repay at least some of what is owed to your creditors. If not, then you may be eligible for a fresh start through Chapter 7 bankruptcy. Otherwise, you may need to pursue a Chapter 13 bankruptcy or other debt relief options.
How Will Filing for Bankruptcy Affect a Repossession?
Debts can be difficult to deal with in any situation, but in some cases, the failure to pay what is owed could result in the repossession of a vehicle or other property. While bankruptcy may be an option if you are struggling with debt, determining how a bankruptcy filing will affect a repossession is not always easy. Will filing for bankruptcy stop a repossession? Will it allow you to recover property that has already been repossessed? By understanding the procedures followed during bankruptcy, you can make sure you follow the correct steps to protect yourself and receive relief from your debts.
Preventing Repossession Through the Automatic Stay
When you begin the bankruptcy process, an automatic stay will go into effect as soon as your bankruptcy petition is filed. The automatic stay is a court order that blocks creditors from taking any collection actions against you, including repossessing your property. By filing for bankruptcy as soon as you learn that a creditor plans to repossess a vehicle or other property, you can prevent the repossession and determine how to address your outstanding debts. As long as the automatic stay is in place, creditors will be unable to repossess your property. However, a creditor may ask for the automatic stay to be lifted if they believe that they may suffer losses due to the destruction of property, so it is important to move forward with the bankruptcy process and make sure you address your debts correctly with the help of an attorney.
What Are the Most Common Reasons People File for Bankruptcy?
Though no one wants to have to file for bankruptcy, it may sometimes be the best option available. Many Americans face situations where debts become overwhelming, and paying back what is owed while also being able to meet a family's ongoing needs may become impossible. Bankruptcy can be the ideal way to receive relief in these situations, and it can often help resolve debt-related issues before they get worse and lead to consequences such as repossession or home foreclosure. By understanding some of the most common reasons people pursue bankruptcy, you can realize that you are not alone and that you have options.
Financial Issues That Often Lead to Bankruptcy
The need for debt relief can arise in a variety of situations, including:
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Job Loss or Reduction in Income - One of the most common reasons people file for bankruptcy is due to a loss of income. This can come in the form of a job loss or a significant reduction in salary. If you lose your job, it can be difficult to make ends meet, especially if you have a family to support. If you have exhausted all other options, such as borrowing money from friends or family or selling possessions, filing for bankruptcy may be your best option.
When Can the Automatic Stay Be Lifted in a Bankruptcy Case?
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long with the ability to eliminate certain types of debts, one of the key benefits of bankruptcy is the automatic stay. This is an order that is put in place by a bankruptcy court immediately after a debtor files for bankruptcy, and it will force creditors to cease all collection actions during the case. This means that creditors cannot call, email, send letters, or otherwise communicate with a debtor. They cannot proceed with a legal judgment against a debtor, garnish their wages, freeze or seize their bank accounts, repossess a vehicle or other property, or take any other actions in an attempt to collect a debt. Any foreclosure proceedings that have been initiated must be put to a halt.
The automatic stay can provide a debtor with protections and give them some "breathing room" as they address their debts during the bankruptcy process. However, there are some situations where the automatic stay can be lifted. By understanding when a creditor may request an exception to the automatic stay, a debtor can make sure they are prepared to address these issues as they proceed with bankruptcy.
From our office in Charlotte, we serve clients throughout Mecklenburg County, Union County, and Gaston County, including Concord, Gastonia, Huntersville, Belmont, Davidson, Cornelius, Harrisburg, Matthews, Monroe, Fairview, Stanley, and Bessemer City, as well as other communities across North Carolina.
301 S. McDowell Street, Suite 1103, Charlotte, NC 28204
704-256-7766
