Bankruptcy Answers Blog

Catching up on payments when the dust settles.

Posted by on Mar 31, 2020 in Bankruptcy, Chapter 13 | 0 comments

Catching up on payments when the dust settles.

I received a call today from a banker. His office is overwhelmed with phone calls from people who have been laid off in the past week, and who are facing the difficult situation of possibly not being able to make their next mortgage payment. While many banks and lenders are offering financial assistance to get through these trying times the US is facing with the Covid19 shut downs, sometimes that may not be enough.

What options do you have once the dust settles, you are back to work, but you have fallen behind on your car and/or mortgage payments? One option may be a Chapter 13 bankruptcy. Chapter 13 allows a reorganization of your debts by requiring your bank to give you up to 5 years to catch up any amount you have fallen behind on your loans. Let’s look at an example:

Harry Homeowner is laid off from work for 4 months. With little to no income, he isn’t able to make his $700/mo house payment. When Harry gets back to work, a Chapter 13 bankruptcy allows him to take the amount he is behind (4 X $700 = $2,800) and repay that over 3 to 5 years. So after filing for relief under Chapter 13, he would begin making his regular monthly payment of $700 again, and an additional $50 a month to catch up the amount he was behind.

Hopefully, banks will have flexibility and willingness to work with those negatively affected financially by this current crisis. But keep in mind that if they don’t, or you find that you don’t qualify for their programs, you will have another alternative to deal with these loans. We will be here to walk you or your loved ones through this process discretely and efficiently so you can focus on getting life back to normal.

We are currently scheduling phone and video meetings with clients. Call us today at 419-289-8080 or 419-994-4892 to schedule a time to have your legal questions answered by one of our knowledgeable attorneys from the comfort of your home.

I have a creditor that is going to sue me. What should I expect?

Posted by on Jun 11, 2014 in Bankruptcy | 0 comments

I have a creditor that is going to sue me. What should I expect?

financesOnce your creditor has filed the lawsuit, you have the right to defend the case and try to avoid having a judgment issued against you by the court. A judgment is a court order that says you owe the money and empowers the creditor to collect against you. Once the judgment is issued, your creditor has several tools at their disposal for collecting the money owed. Here are some of the options:

  • Debtor’s examination: Your creditor can obtain a court order that requires you to come to a court to answer questions about your assets under oath. You must attend the examination. If you fail to, you may be found in contempt of court and can face an arrest warrant, fines, and other potential problems. At the debtor’s examination, you must answer questions asked by the creditor or its attorney. Those questions will focus on everything you own, where you work, your bank account information, wage information, and many other things regarding your financial matters. You are required by law to answer these questions truthfully. The creditor can use the information obtained to seek garnishments and other collection procedures.

 

  • Wage garnishment: Your creditor can apply to a court to have money withheld from your paycheck. A notice will be sent to your employer and the money will be subtracted from your pay by your employer and sent to the court for payment on the debt.

 

  • Account garnishment: Your creditor can apply to a court for an order allowing them to collect their judgment, or a portion of it, by contacting your bank and having them remove the money from your bank account and submit it to the court.

 

  • Setoff: In some circumstances where a debtor has a debt with their bank or credit union, the bank or credit union may be able to simply withdraw money from your account without any court judgment.

 

  • Judgment lien: Once a creditor gets a judgment against you, they have the ability to have that judgment perfected into a lien against any real property you own. This will then secure their against your property and give them the ability to foreclose against it.

 

  • Attachment of other assets: Once a lien is obtained, a creditor can also seek to collect it against vehicles, equipment, personal property, other sources of income, inheritance, and other things you may own at the time of the judgment or any time in the future as long as the judgment is still owed.

 

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 Requires the following notice: We are a Debt Relief Agency. We help people file for bankruptcy relief under the Bankruptcy Code. This web site is not an offer to provide bankruptcy assistance services to any assisted person as defined under Section 527(a)(2) of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.