Bankruptcy
So how does bankruptcy work? First of all bankruptcy is not a scam…it is an area of the law designed to protect debtors and help them get back on their feet. The government’s policy is to help avoid creditors’ going after debtor’s assets over bad debt. When people have debt they cannot purchase items way they can with good credit. Basically everyone wins when you get out of debt!
2 Types - CH.7 and CH.13
Chapter 7
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- Is designed to simply eliminate debt like credit card debt, default court judgments, hospital bills, etc.
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- The Federal and State Exemptions allow you to protect your home, car, retirement and other personal belongings up to a certain amount. During the free consultation, I will review your assets and make sure that we protect all of your assets!
Chapter 13
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- Chapter 13 is typically used for people looking to reorganize or get current on their debt. If you fall behind on home or car payments, a Chapter 13 takes the amount you are behind on (the arrears) and spreads the payments out over 3 or 5 years depending on which length of time is appropriate.
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- Remember, there are two types of bankruptcy and the Chapter 13 is intended to help you KEEP any secured asset that is behind on payments.
Bankruptcy Myths
- DO NOT ASSUME THAT YOU WILL LOSE YOUR ASSETS BY FILING A BANKRUPTCY- BANKRUPTCY IS DESIGNED TO HELP YOU KEEP YOUR CAR, HOUSE AND YOUR RETIREMENT!
- THERE IS NO PUBLISHED RECORD OF THOSE WHO FILE BANKRUPTCY!
- BANKRUPTCY DOES NOT RUIN YOUR CREDIT FOR 7-10 YEARS! For 7-10 years the credit bureau reports your bankruptcy filing, but the reality is that soon after getting a discharge you will get credit card offers…it is even possible to get a mortgage in a few years. The reason you will get credit soon is that the financial institution needs you back! They need to make money off of you again. Attorney Nick Yousif can show you how to rebuild your credit!
- IN MOST CASES, A DEBTOR’S CREDIT IS AT ITS WORST PRIOR TO FILING A BANKRUPTCY! Your credit may already be rock bottom and you realistically can’t use financing anyway. Bankruptcy will only help your credit in this scenario because your slate will be wiped clean, and you will be on your way to a fresh start. Don’t get stuck paying minimum balances that do not reduce your principal balance!
- BE CAREFUL OF WHAT NON-LAWYERS TELL YOU! First off, don’t believe anything your credit card or mortgage company tells you. They don’t want you to file bankruptcy because they will lose a lot of money. Be careful basing decisions solely on real estate agents, debt consolidators or investors- they are not attorneys- and they do not understand your legal rights. Also, don’t let other people’s opinions or assumptions of bankruptcy impact your decision. Bankruptcy is a complex area of the law and is designed to PROTECT you.
You will work directly with Attorney Nick Yousif, call today for a free consultation at 508-588-7300.
