Chapter 13

Foreclosures In Chapter 13

Every year, millions of American homeowners fall behind on their mortgage payments. When their banks and lenders begin to threaten to come after the property, homeowners are terrified that they could lose their home. An underwater mortgage due to missed mortgage payments can lead to foreclosure and harassing calls from debt collectors. Fortunately, bankruptcy is one powerful solution that can save your home from foreclosure. A Chapter 13 bankruptcy can help you get back on track. You can stay in your home while you decide the best way to go forward.

What Is a Chapter 13 Bankruptcy?

A Chapter 13 bankruptcy is a form of debt reorganization. It allows you to restructure your debts and keep your property. Chapter 13 can be a good option if you have the money to stay current on your payments but need help with a large amount of debt.

  • Chapter 13 bankruptcy can help you:
  • Get rid of your mortgage arrears
  • Pay off your debt
  • Reduce your monthly payments
  • Keep your home
  • Get rid of harassing calls from debt collectors
  • Stop foreclosure

Keep Your Home in Chapter 13 Bankruptcy

To save your home in Chapter 13, you must make a plan to pay off your mortgage arrears. You must also pay back the remaining debt on your mortgage. This means that you must understand the amount of money you owe, how your mortgage works, and what your lender wants you to do. When you begin your Chapter 13 case, your attorney will help you draft a plan to make all of the required payments. This will include your regular mortgage payments and the payments that you must make to the court to pay off your arrears. The repayment plan will also include the amount of money that you must pay your unsecured creditors.

Contact an Attorney

Filing for bankruptcy is an important decision that can have far-reaching consequences. If you are facing foreclosure and want to keep your home, you can talk to a Citrus Heights bankruptcy attorney to find out if Chapter 13 bankruptcy is right for you.

Debt Relief

Erasing Medical Debt

Over the last decade, healthcare legislation reforms have focused on lowering the burden many face as the result of medical costs. However, research shows that medical debts and expensive medical bills are one of the leading causes of bankruptcy filings in the United States. In fact, numerous studies have shown that over 60 percent of personal filings come as a result of unmanageable medical bills. To make matters worse, these medical bills are often unexpected.

Blindsided By Bills

For example, according to a study published in the Journal of General Internal Medicine, the majority of Americans are unaware of medical bills until they are overdue, and nearly 70 percent of the respondents had no idea how much their medical bills would cost. It is no surprise then that medical bills are more likely to contribute to bankruptcy among low-income individuals. According to the Consumer Financial Protection Bureau (CFPB), low-income patients receive medical bills from hospitals, doctors and other healthcare providers at a higher rate than their higher-income counterparts. To make matters worse, the majority of these bills are delivered by mail, where they are more likely to be overlooked or forgotten.

Fortunately, medical debt is one bill that can be easily addressed and balances erased through bankruptcy. Filing for bankruptcy to remove debt caused by medical bills is a viable option for patients and their loved ones in a number of different situations.

When Medical Bills Can Be Discharged Through Bankruptcy

In order to be discharged through bankruptcy, medical bills must meet certain criteria. For example, a medical debt that is less than $600 and at least 180 days old has a higher probability of being discharged. In addition, the patient must have incurred the medical bills with the intention of paying them. There are also certain debts that may be difficult to discharge through bankruptcy, such as those incurred as a result of fraud or addiction. In addition, the patient should be able to show that they are unable to pay the debts based on current income. In other words, the patient must prove that paying the debts would make it impossible for him or her to meet basic needs such as food, shelter and clothing.

In order to learn more about bankruptcy, the patient will need to meet with a bankruptcy attorney to discuss their unique circumstances. It is important to understand that not all patients can file for bankruptcy and that the process can be long and complicated. Patients should not attempt to file for bankruptcy alone. Therefore, it is important to talk to an experienced Citrus Heights bankruptcy attorney as soon as possible.


Co-Signing On Debt

Co-signing for a loan is not an everyday occurrence. Many people with poor or under established credit may only be able to secure a loan with the help of a co-signer. Although co-singing is commonplace in some instances, there are risks involved to both the borrower and the co-signer if the debt becomes delinquent or is unpaid. When you cosign a loan for someone you are essentially telling the lender that you will be responsible for the repayment of the loan if the primary borrower defaults. This is a huge undertaking for most people. If the borrower files for bankruptcy protection you could find yourself on the receiving end of harassing calls from creditors, threats of liquidation or risk damaging your credit.

Cosigning a loan is something that should be done with extreme caution. Make sure you know the terms of the loan, how much you are agreeing to be responsible for and if you feel you are able to handle some of the worst case scenarios before you commit. Make sure you have an open and honest discussion with the borrower about the risks involved.

Despite the risks associated with cosigning a loan, it’s not uncommon for borrowers to attempt to protect their cosigners from the debt they owe. If the borrower is planning on filing for bankruptcy, they may try to protect their cosigner from the debt they owe by including a clause that lets them off the hook. If you, as the cosigner, are not aware of this clause it could come as a huge surprise. While it’s not uncommon for a borrower to try to protect their cosigner, it’s against the law. If the borrower is planning on filing for bankruptcy and includes a clause that exempts you from the debt they owe, you can dispute it. The clause should not be enforceable because it was not included in the original loan agreement. If you still find yourself in the position of facing the debt owed by the borrower you can submit a proof of claim to the bankruptcy court.

It’s important to keep the lines of communication open with the borrower to ensure that they are not planning on including you in their bankruptcy filing. If you are not included in the filing, you can move forward with your life and continue to build good credit. Cosigning a loan can be a smart move provided that the borrower has good credit and is financially stable. If you have any questions or concerns about cosigning a loan contact one of our Sacramento bankruptcy lawyers today.


Car Title Loan Scares

These days, many people are finding themselves drowning in debt or still suffering the consequences of prior unresolved debts. To stay afloat, some are turning to high interest, risky loans to make ends meet.  Perhaps even worse, are the predatory lending practices of some agencies to take advantage of these consumers.

Poor credit scores, a history of repossession or collections, and stingy lenders can all make getting a secured loan more difficult.  Subprime auto loans target people with poor credit or complicated loan histories, with the lure of fast cash. The reason these loans are easy to obtain is simple: complicated and costly repayment terms.  These subprime loans are often associated with higher rates of payment delinquency. As a result, lenders usually require a hefty down payment and a co-signer. The co-signer is responsible for the loan if the primary borrower has defaulted or has been unable to make the payments. Further, some people have found themselves trapped in a cycle of auto loan scams and predatory lending agreements when they try to take advantage of these kinds of loans.

For the consumer, the problem is twofold. First, some consumers in this financial hardship already face challenges with money management or are more likely to experience financial hardship during the life of the title loan. Additionally, lenders often prey on people they deem as high risk, hoping for default. Once default happens, the lender repossesses the car and sues the consumer for the loan balance. Not only does the lender retain possession of the car, often reselling it for profit, but they also sue for payments from the consumer.

Unfortunately, this type of predatory lending has been commonplace in recent years. However, there are ways to get out of a bad loan and manage debts. A Sacramento bankruptcy lawyer can help you fight your debt problems and regain control over your financial future.


Can Bankruptcy Affect My Job?

Bankruptcy is a legal tool that was intended to help the consumer, not harm them. Unfortunately, myths and misunderstandings about bankruptcy have led many people to have false beliefs about bankruptcy.  People often wonder whether friends, family, or their employer will find out if they have filed for bankruptcy. Although bankruptcy filing records are public records, it is rare for people to have their information publicized.

Employee Protections

If you have or are considering filing for bankruptcy, your current employer should not have knowledge of your bankruptcy unless you inform them. However, if wage garnishment is involved in your debt resolution then it is possible your employer will find out about the filing. Fortunately, there are protections in place to prevent you from being fired or discriminated against soley based on your bankruptcy filing.  It would be considered illegal discrimination, and grounds for a lawsuit if your employer does any of the following as a result of your bankruptcy filing:

  • Terminates your employment
  • Reduces your salary
  • Demotes you
  • Reduces your job responsibilities

These protections exist to protect consumers while they work to alleviate their debts. The benefits of bankruptcy often outweigh the misguided concerns people may have about bankruptcy. Contact our office to speak with a Sacramento bankruptcy lawyer about how we can help you get out of debt with ease.


When Is Bankruptcy Right For Me?

Every year, millions of Americans are faced with financial problems that threaten their ability to provide for their families. The negative consequences of debt, income loss, and the inability to get out of debt can have painstaking effects. When reviewing options for relieving debts, not all solutions are created equal. In fact, there is a time and place in which bankruptcy may be the best option for you.

Balancing Benefits and Risks

Debt relief options such as consolidation loans and settlements may offer a more affordable way out of debt than negotiating with lenders directly.  However, they often come with high up-front fees and lengthy payment plans. Further, debt settlements and consolidation loans may still leave you at risk from your creditors. If you have collateral or assets tied to any defaulted loans, you may be at risk of repossession, eviction, garnishment, or foreclosure.

Filing for bankruptcy, on the other hand, can offer you immediate protection from creditors, debt collections, and the loss of assets or collateral. Bankruptcy offers greater protection than other debt relief strategies when it comes to protecting property.  Bankruptcy can also offer a full debt discharge; a legal release of liability from an owed debt.  Many people find themselves out of debt faster, easier, and with greater protections.

If you are experiencing problems paying your debts or making ends meet, contact our Sacramento bankruptcy attorney office today to learn more about how bankruptcy may help you rebuild your financial future.


Loan Debts In Bankruptcy

There are several types of loans that consumers can choose from when it comes to borrowing money. Payday loans, title loans and personal loans are the quickest, easiest option for anyone needing fast cash, but, they are risky. Other types of loans are more exclusive, often requiring criteria that make it difficult for the average borrower to obtain easily. While both avenues serve a purpose, the options to consumers are far from equal.

Types Of Loans

In general, loans fall into one of two categories: secured loans and unsecured loans. Secured loans are any lines of credit that are tied to assets or property as collateral, such as car loans and mortgages. If the borrower defaults on the loan payment, the loan lender has the right to repossess or liquidate the asset to satisfy the debt owed. Unsecured loans are lines of credit that are not tied to assets or property as collateral. If the borrower defaults, the loan lender only has debt collection and traditional legal avenues for obtaining the debt owed.

In a bankruptcy, how loan debts are handled varies by the loan type, as well as whether that loan debt is also considered a “priority debt”. Secured debts are not eligible for a traditional debt elimination as most commonly thought of when someone discusses filing for bankruptcy. Secured debts in bankruptcy are most often satisfied through a Chapter 13 repayment plan. Borrowers can repay a portion of the debt through a series of affordable monthly payments, while keeping the property or asset. Unsecured debts are often eligible for either a Chapter 7 debt elimination or Chapter 13 repayment plan, depending on the finances of the borrower.

If you have questions about your debt or how bankruptcy can give you a fresh start, contact our Sacramento bankruptcy office today at (916) 459-2364.


Filing For Bankruptcy: Timing Matters

For many people, finances often take the back seat or are swept under the rug, that is, until a problem arises. Many people experience financial hardship that builds over time, while many more simply fall onto hard times unexpectedly. Regardless of how you end up in debt, one thing that you cannot afford during financial hardship is to waste time.

Debt Relief Decisions

Most people never prepare for the need to file for bankruptcy, but those that do seek bankruptcy protection often find they are faced with big decisions in a short amount of time. However, rushing into bankruptcy may not be a good idea. One of the most important aspects to consider before seeking bankruptcy protection is your financial history.

First, your financial details will be under review. The court will take a detailed look into the nature of your income, property and assets; and compare those to your secured and unsecured debts. Therefore, it is important that your financial profile remain somewhat consistent in the time leading up to your bankruptcy filing. Acquiring too much debt within the months leading up to a filing could be viewed as suspicious. In some cases, it may lead to further investigations of fraud, and may even result in ineligibility to file.

On the other hand, transferring or selling off assets within the days leading up to your filing may also be viewed negatively by the court. Similarly, significant changes to your income levels could influence your case. For example, an increase in income may disqualify you from a Chapter 7 case, or cause an increase in your monthly payments during a Chapter 13 plan.

Finally, the timing of your case could also be influenced by whether you have filed for bankruptcy in the past. If you obtained a discharged in a Chapter 7 case in the past, you will be required to wait at least 8 years before filing for another Chapter 7; or 4 years before filing for Chapter 13. If your prior debt discharge was under a Chapter 13 case, you will be required to wait at least 6 years before becoming eligible for a Chapter 7.

If you have questions about your debt or how bankruptcy can give you a fresh start, contact our Sacramento bankruptcy office today at (916) 459-2364.

Debt Relief

Disputing Debt Collections

Debt collectors make their living by harassing you for money owed to creditors. Unfortunately, the debt collector on the other end of the phone is simply the messenger; subjected to the emotional pleas of the debtor. While debt collectors can be relentless and rude at times, you do have rights when it comes to dealing with debt collection efforts. Here is what you need to know about dealing with credit collections:

First, you have rights to direct negotiation with the creditor. In most cases, a debt collector will tell you that a payment in full is due over the phone at the time of calling to collect the money.  This is misleading. Although your debt may have been passed to a third-party creditor, it doesn’t mean that you can’t resolve your debts directly with your original loan holder. It is a good rule of thumb to always contact your creditor directly when possible to discuss your debts. Send a certified letter to your original loan holder to negotiate your debt payments, rather than making a payment to a third-party collector when at all possible. However, if you have already been contacted, sent letters of repossession or foreclosure over a debt; contact one of the local Sacramento bankruptcy lawyers in town about next steps.

Secondly, you have rights to appropriate and fair debt collections. The Federal Trade Commission has outlined rules that debt collectors must follow when attempting to collect on a debt. This is known as the Fair Debt Collection Practices Act.  If a debt collector doesn’t adhere to these rules or you feel is being unfair, you can file a complaint with the FTC for violations such as:

  • Misrepresenting who they are or which creditor they are working for
  • Falsifying information about the debt, amount to be owed, or the status of your account
  • Contacting you outside of the hours of 8:00a.m. and 9:00 p.m.
  • Making repeated phone calls or collection attempts
  • Making threats of violence or legal actions for nonpayment

Finally, you have rights to halt debt collections. There are a few ways you can terminate contact from collectors and resolve the debt. You can dispute the debt with the collector by requesting written verification of the debt or you can file for bankruptcy to issue an order of automatic stay. Debt collections are tough, but you do have rights and options. Contact us to learn more at 916-459-2364.


The Bankruptcy Petition

Anyone suffering under debt problems or financial hardship understands the amount of stress money troubles can take on a person. Couple high stress burdens, along with a complicated legal process, and seeking debt relief through bankruptcy can seem like more trouble that help. Fortunately, the bankruptcy process is intended to help debtors, not work against them. By working closely with an experience Sacramento bankruptcy attorney, you can learn more about information required to eliminate your debts through bankruptcy without the stress.

What Is a Petition

The bankruptcy petition is the legal court document used to file your bankruptcy case. This document initiates your case with the court system, putting gears in motion for debt relief help. However, this document is not to be rushed or completed without the proper guidance of an attorney.

The reason for caution when it comes to the petition is the highly detailed, financial nature of the document. The petition and schedules will ask you many questions about all aspects of your finances. From debt balances, information about creditors, to your income and assets. You will need to list all of your debt accounts, income and wages, and list all of your assets and personal property. If there are any discrepancies or missing information at the time of filing the petition, your case may be dismissed, making you ineligible for a discharge of your debts at that time.

It isn’t uncommon to feel uneasy about listing such detailed information about your finances, often because of the misconception that all assets are subject to liquidation. This is simply not true for most debtors. Further, bankruptcy exemption laws offer a range of coverage for many types of property. This is why it is important to remember that accurate and honest reporting is in your best interest for the success of your case.