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IS BANKRUPTCY THE RIGHT CHOICE FOR YOU?
by NCLC
Bankruptcy can be the right choice if you have no better way to deal with your debts. It may make it possible for you to:
Eliminate the legal obligation to pay most of all of your debts. This benefit comes from the bankruptcy “discharge” that you get for successfully completing a bankruptcy case.
Stop almost all creditors from taking any steps against you except through the bankruptcy process. This is provided by the “automatic stay” that goes into effect as soon as you file the necessary paperwork at the beginning of a bankruptcy case. Foreclosures, repossessions, utility shut-offs, lawsuits, and other creditor actions will be immediately (but perhaps only temporarily) stopped.
Catch up on missed payments on home mortgages, auto loans and other debts secured by property you wish to keep. Bankruptcy does not, however, automatically eliminate mortgages and other liens on your property without payment.
Stop debt collection harassment, wage garnishment, and similar creditor actions to collect a debt.
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Lower the monthly payments on some debts, including some secured debts such as car loans.
Prevent termination of utility service or restore service if it has already been terminated.
Allow you to challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more than you really owe.
Bankruptcy can not, however, cure every financial problem and it is not the right step for every individual. In bankruptcy, it is usually not possible to:
Eliminate certain rights of “secured” creditors. A creditor is “secured” if it has taken a mortgage or other lien on property as collateral for a loan. Common examples are car loans and home mortgages. You can force secured creditors to take payments over time in the bankruptcy process and bankruptcy can eliminate your obligation to pay any additional money on the debt if you decide to give back the property. But you generally can not keep secured property unless you continue to pay the debt.
Discharge types of debts singled out by the bankruptcy law for special treatment, such as child support, alimony, most student loans, court restitution orders, criminal fines, and most taxes.
Protect cosigners on your debts. When a relative or friend has cosigned a loan, and the consumer discharges the loan in bankruptcy, the cosigner may still have to repay all or part of the loan.
Discharge debts that arise after bankruptcy has been filed. Because of this, you may wish to delay a bankruptcy filing until you are reasonable sure that you will not incur new major debts.
Kurt O’Keefe, Esq.
OFFICES IN WAYNE, OAKLAND AND MACOMB COUNTIES
Phone: 313-962-4630
Fax: 313-216-2999
email kurt@stopcreditor.com
