After several months of avoiding phone calls and ignoring mail correspondence, you can't ignore your past due bill any more. You got the dreaded notice in the mail that your creditor has filed a civil lawsuit against you for failure to pay your debt to them. You start panicking, because you don't see any way you can pay the amount you owe and you don't want to go to court. Now what? Fortunately, there is something you can do. File bankruptcy. Here's what you need to know.
Filing bankruptcy puts an automatic stay on the lawsuit
An automatic stay means that all methods used by creditors to collect debt are required by law to be stopped, including lawsuits. As soon as you file for bankruptcy, your trustee will notify your creditors. Additionally, you will not have to pay any of the bills you receive after you file. Your trustee will handle those for you. However, there are a few things that are not included in an automatic stay.
Some payments are not included in an automatic stay
Child support, alimony, and back taxes are a few items that are not included in an automatic stay. The exclusions are based on state laws. Therefore, discuss your bills and payments with a bankruptcy lawyer or your trustee to make sure your bases are covered.
Gather all your financial documents to file
You are required to give your bankruptcy lawyer and trustee documentation for all of your income, debt and assets. Do not leave anything out. Your legal team will be looking through your credit and income history. If they discover something that you failed to disclose, your legitimacy could be questioned. Failure to disclose important things, such as a piece of real estate property or an additional vehicle you may own, could cause you to be hit with a fine for nondisclosure.
Determine which type of bankruptcy to file: Chapter 7 or 13
Your legal team will delve into your financial documents and determine which type of bankruptcy is the most appropriate for your particular situation: a Chapter 7 or a Chapter 13. Essentially, the determination is made based on your ability to repay the debt or not. If you can repay some of the debt by reorganizing it into manageable amounts, you will file a Chapter 13. If you are unable to pay your debt, you may file a Chapter 7.
Meet the requirements of the bankruptcy
As part of your bankruptcy, you are required to prepare a budget and maintain it. Keeping a budget will help you financially survive until your bankruptcy is discharged and you receive your final decree. The final decree occurs after the trustee has determined that all debts have been met after the bankruptcy is discharged. In most cases, bankruptcies are discharged in three to four months, with the final decree taking several weeks after.
If you have a Chapter 13, you will be required to give part of your income to your trustee to pay down your debt. You will be told the amount you will be required to pay. If you cannot make a payment for any reason, immediately inform your trustee. It's a legal requirement. Don't make the same mistake you did before in trying to avoid the situation.
If a creditor contacts you for payment during your bankruptcy, inform your legal team right away. They are not legally permitted to contact you for any reason regarding what you owe them. Additionally, you cannot contact your creditors for information regarding your status as a debtor to them. Do everything through your bankruptcy lawyer and trustee. If you are looking for an attorney to help you navigate the bankruptcy process, contact a firm like Harold Jarnicki Attorney At Law.Share
3 June 2015
Getting hurt while on the job can leave you in pain and without an income for some time afterward, but that doesn't mean that you have to start going to the food banks to make ends meet. Working with a lawyer to file a personal injury case (if the injury was due to neglect by another party) is a great way to get compensation you deserve for lost work, and to get your medical bills paid so you don't have to pay out of pocket for high deductibles. This website was built with love to provide you with up-to-date information you can use when working with a lawyer, filing paperwork, and dealing with all of the hoops and red tape of your personal injury case. Hopefully you can find the support you need right here.