The benefits that result from filing a Chapter 7 Bankruptcy are many and varied and depend on your particular circumstances. Once a bankruptcy petition is filed, there is an automatic stay on all proceedings (stopping the processes of collecting) against you, including attempts to collect debt that is dischargeable.
1 Stop a Foreclosure on a Home
If you are behind on your mortgage (say because of unemployment or illness for a period of time) or if you are now working and need time to cure the default on your mortgage, filing a bankruptcy could stop the foreclosure for a period of time. This may give you time to negotiate a loan modification.
2 Lower Some Monthly Payments
This may apply to a loan for a car or personal property if a loan modification is being sought. The lender is not compelled to offer a lower payment, but often they will review your information and offer a better interest rate or a lower principal on the loan to make it more affordable for you to keep your property.
3 Prevent Termination of Utility Services
Once a petition is filed, the utility service cannot be cut off, and if it has been cut, your utility provider would have to reconnect these services.
4 Prevent Repossession of Personal Property
Once a petition is filed, your creditor is prevented from attempting to repossess your personal property such as your car, furniture, or equipment. If your personal property is already repossessed, your creditor can be forced to return it.
5 Prevent Garnishment of Wages (even if there is an order)
Once the petition is filed, the automatic stay prevents debt collectors from garnishing your wages.
6 Prevent Harassment from Debt Collectors by Telephone and Mail
Once a petition is filed, debt collectors can no longer send you mail or call your home requesting payment of the debt. If they do, this a violation of the automatic stay and they can be sanctioned. Even after the case is closed and the debt has been discharged, debt collectors can be sanctioned if they continue to harass you with telephone calls or mail requesting payment of the debt that has been discharged.
7 Erase Debt
If your debt falls in the dischargeable category, this debt can be erased/discharged so that you can get a fresh start.
If one or more of the above listed situations applies to you then you may be able to wipe out your debt, prevent debt collectors from harassing you, and get a fresh start. Call us at (407) 647-7887 to schedule a free consultation to find out if this is the right solution for you. Be prepared to discuss your situation. Compile a list of all your debt (credit cards, medical bills etc.) and all of your assets and bring that list to the consultation. At the end of the consultation, among other things, you should have a clear picture of whether bankruptcy is the best solution for you, which debts can be discharged, how filing would affect you in the future, and if you do decide that it is the option, how to manage your assets and debts in preparation for filing.