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What Is A Deficiency Balance And How Can I Avoid Paying It?

When loans are taken out, the lender expects that they will be repaid in full. When payments are not made, the lender might undertake collection efforts. Some of those efforts include repossession of personal property, or foreclosure of real estate. When a repossession or foreclosure takes place and the property gets back in the hands of the lender, a resale is the next step. But all too often, whether it is your car or your house, the collateral is resold at less than what is owed on the loan. The difference in price is referred to as a deficiency, and the borrower is still liable for payment of that amount. In fact, many collection cases that involve autos are for collection of the deficiency after repossession. This shocks most consumers because it can feel like a done deal, with nothing left to handle, once your car has been repossessed. The good news is that there are ways you can get out of paying a deficiency balance.

One option to avoid payment of a deficiency balance is to challenge the amount the collateral sold for, and show the Court the sale was not reasonable. This can be hard to prove, because industry standards allow for some pretty low resale values on cars. Another good choice is to file for bankruptcy, and doing this will help with more than just an auto deficiency balance. Here are some other types of debt bankruptcy can help to eliminate or reduce:

• High interest rate credit cards
• Deficiency balances on real property that has been foreclosed
• Signature loans
• Payday loans
• Medical bills
• Student loans, in extraordinary circumstances
• Mortgage arrears
• Loans for recreational vehicles such as ATV’s, or boat loans

We want to help you get out of financial trouble. If you are having difficulty stretching your dollars, call us for help. We will let you know what to expect if you decide to file for bankruptcy and will let you know what type of case you are eligible to file. Our goal is to get you back on your financial feet, so you can start over with a clean slate.

For more information about deficiency balances, contact us at We will help by coming up with solutions that help get you back on your feet.

Will I Still Owe On My House If It Goes To Foreclosure?

A foreclosure is a legal way for the bank to take back your house if you are not making your mortgage payments. Many times, when the bank is successful in foreclosing on your home, the home is resold by the bank in an attempt to recoup the loss taken on the loan. But most times the amount paid at resale is less than what you owe, and if that is the case the bank might come knocking for payment of the deficiency. This can come as a shock to most people, who think that the matter is over when the bank gets the house back at foreclosure sale. So, what do you do if you still owe money for your house after it has gone through the foreclosure process?

One thing you can do is to file for bankruptcy, which will eliminate any deficiency debt owed on your home. Bankruptcy is also helpful because it will:

• Eliminate or reduce the amount of unsecured debt you owe. If you have a lot of high balances on credit cards or owe your dentist for an emergency root canal, filing bankruptcy will let you wipe those debts out or at least allow you to pay less than the full balance owed.
• Allow you to pay the value of your car instead of the balance owed. This is beneficial to most every person who owns a car because as we all know, cars depreciate rapidly. If you file a Chapter 13 bankruptcy, the option of paying what your car is worth is available to you. You might also be able to reduce the interest rate on your car loan if you file a Chapter 13 case.
• Immediately stop any collection actions being taken against you, including any wage garnishments.

The benefits of bankruptcy are much more far reaching than what is mentioned above, but because every case is different it is impossible to list them all. To find out how you can benefit from filing a bankruptcy case, call one of our knowledgeable bankruptcy and debt management attorneys today. We will explain your options, and help you make a decision about what to do next.
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An Explanation Of The Differences Between A Short Sale And A Deed In Lieu Of Foreclosure

One of the largest expenses most families have each month is their mortgage payment. So when money gets tight, it is only natural to try and figure out how to reduce expenses so necessities can be paid for each month. But when there is no wiggle room and you are unable to find a way to keep current on your house payment, the lender will start the foreclosure process. If that happens, you do have some options that will stop the foreclosure action dead in its tracks, and still get you the relief you need.

Two popular options to deal with foreclosures are by doing a short sale of your home, or giving the lender a deed in lieu of foreclosure. These are two very different things, and before you make a choice about what to do, it is best to understand the differences:

• A short sale is a process whereby the lender agrees to allow the home to sell for less than what is owed. The tricky part here is that the amount of debt “forgiven” can be charged as income to the borrower. If that happens, you will have to report the difference as income on your taxes. In order to make sure a short sale makes the most sense, it is always a good idea to have a qualified bankruptcy and debt management attorney negotiate on your behalf.
• A deed in lieu of foreclosure is a process whereby the homeowner agrees to sign a deed, giving the home back to the bank. This document puts title back in the name of the lender, and can be done instead of going through the foreclosure process. There are some title requirements that go along with this option, and not all banks will accept a deed in lieu of foreclosure. If you are thinking about going this route, you will want to have a skilled attorney help you.

If neither of these options appeals to you, you can also consider bankruptcy. In fact, bankruptcy might be a more attractive option if your lender is unwilling to waive any deficiency balance that might remain after a short sale, or is going to demand payment of that amount once you deed the property back to them and it sells for less than what is owed at remarketing. For help deciding what to do to save your home, or to get out of a foreclosure, call us today.

For more information about foreclosures, short sales, and bankruptcy, contact us today at We will go over the facts of your case and let you you’re your next step.

Who Tells My Lenders To Stop Garnishing My Check When I File Bankruptcy?

If you are in over your head with debts, chances are one or more of your lenders have sued you for a past due bill. If a judgment has been entered against you, the next step most lenders take is to collect the judgment amount. One of the most popular ways to collect on a judgment is to issue a garnishment. A garnishment is a court order, directed to your employer, to hold money out of your paycheck and pay it to your creditor. This means all the hard work you do is rewarded with fewer dollars, and that can cause you to get off track with your monthly expenses. But there are things you can do to stop a garnishment, and one of those is to file for bankruptcy.

If this sounds like something you would consider, you might be wondering how your judgment creditors know to stop garnishing your wages once you file for bankruptcy. The process is actually quite simple, in that the instant you file a bankruptcy case your lenders have to stop all collection activity. And, this includes a pending garnishment. Here is what you can expect once your case is filed:

• The automatic stay will go into effect immediately, and it is against the law for a creditor to continue with collection efforts or engage in litigation against you once the automatic stay is in place.
• Every creditor you listed when you filed your case will receive notice of your filing from the Court. This notice is what prompts the creditor to stop their efforts.
• You will also be given the filing information about your case, and can provide that directly to any lender who is garnishing your wages.
• Your attorney will also have access to your case data, and can provide that to your lenders or their attorneys, so any active garnishment can be stopped.

Once you have your entire paycheck in your hands, you are better able to pay your bills. And, depending on the type of bankruptcy you file, you might not have to pay your credit cards and other unsecured debt any longer. Eliminating these payments, along with receiving a full paycheck, will increase your bank balance and allow you to get back on top of your debts. If you are having a hard time making it from paycheck to paycheck, or your wages are being garnished for a debt, call us for help. We will talk to you about your options, and help you make a choice that works for you.

If your wages are being garnished and you are considering filing bankruptcy to help eliminate debt, contact us at

What Happens If I Use A Credit Card After I File Bankruptcy?

Most people who file for bankruptcy do so as a result of overwhelming credit card debt. It is an unfortunate outcome of a sluggish economy that many Americans have to resort to use of credit cards to pay every day expenses. And when you are not able to pay the card balances in full, interest adds up quickly and can cause your total amount due to spiral out of control. If you file bankruptcy though, you can either eliminate or at least reduce your credit card debt. Once you no longer have to juggle your salary to stay on top of mounting credit card bills, you will have more money on hand to cover your expenses. But what do you do if you get in a financial bind after you file bankruptcy? Can you still use a credit card to take care of an unexpected emergency home repair or medical bill?

It is unlikely you will be able to use an existing credit card after you file bankruptcy, and here is why:

• When you file your case most card issuers stop allowing charges to be made.
• If your card issuer does not stop your ability to use their card, chances are your credit line will be frozen and any purchase you try to make will be denied as an over the limit attempt.

This is usually the case for cards you had before you filed a bankruptcy case, but there is nothing to stop you from applying for a new credit card once your bankruptcy case is finished. In fact, many companies offer cards to people fresh out of bankruptcy as a way to start rebuilding your credit. But be careful, the rates are often higher than what you paid before, and if you don’t watch your spending you can end up right back where you started. The best thing you can do after getting out of bankruptcy is to make a budget and a plan to stick to that budget. In fact, part of the bankruptcy process includes a requirement that everyone who files a case participate in a credit counseling program. This program is designed to bring awareness to financial issues, and prepare you for how to live on what you earn without resorting to taking on debt to pay for things you need. We know this can be hard, and are here to help.

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Three Differences Between Chapter 7 and Chapter 13 Bankruptcy

If you are experiencing difficulty paying all of your monthly bills, you might be thinking about filing for bankruptcy. And, if you are thinking about filing for bankruptcy you probably have a lot of questions about the process. There are two main types of consumer bankruptcies, and either one will give you the relief you need. That said, there are some major differences between the types of bankruptcies available to consumer debtors, and knowing the differences can help you decide what is best for you.

Three main differences between a Chapter 7 bankruptcy and case filed under Chapter 13 are:

● A Chapter 7 case will allow you to eliminate all of your unsecured debt. This means all of those high interest rate credit cards, signature loans, and medical debts will no longer be due. But in Chapter 13, you are required to pay back at least a small portion of your unsecured debt. The amount that you have to pay back depends on your income, and your total secured debt, and it varies from person to person.
● A Chapter 7 case usually takes no longer than 6 months to complete, and most times it is much faster. But a Chapter 13 can last for up to five years, and that is because in a Chapter 13 you come up with a repayment plan for all of your debts. Once you get a repayment plan that is acceptable to your creditors and to the Court, you will make one monthly payment to the Chapter 13 Trustee, and he will disburse payments to your creditors.
● In a Chapter 13 case you are allowed to pay back only what your car is worth, instead of what you owe. But in a Chapter 7 if you want to keep your car you will probably have to pay the full balance. You are also allowed to repay your back due mortgage payments over a several month period if you file a Chapter 13, but if you file a Chapter 7 case most mortgage lenders will want the full reinstatement figure up front.

There are advantages and disadvantages to each type of case, and you have to do what works best for you. You also have to file the type of case that the law allows you to file, and to find this out you will need the help of a qualified bankruptcy attorney. Contact our office for more information.

For more information about bankruptcy, contact us at We will help by coming up with solutions that work for you.

How Often Can I File Bankruptcy?

Sometimes life has a way of repeating itself, and not all of the things that come around again are welcome. History is full of stories of people who have been knocked down, and gotten back up more than once. When money problems come up, there is no guarantee that once resolved they will not resurface. So, if you have filed for bankruptcy before and are having a hard time paying your bills again, you might need to file a second (or even third) case. But there are rules in place about how often you can file, and what type of case you can file if you have filed before. In order to make a choice that works for you, it is good to know what these rules include.

If you want to file bankruptcy but have filed a case before, here is what you need to know:

• If your first case was a Chapter 7, you cannot receive another Chapter 7 discharge for 8 years from the date your first discharge was entered.
• If your first case was a Chapter 13, you cannot receive another Chapter 13 discharge for 2 years from the date your first Chapter 13 discharge was entered.
• If your first case was a Chapter 13, you cannot receive a Chapter 7 discharge for 6 years.
• If your first case was a Chapter 7, you cannot receive a Chapter 13 discharge for 4 years.

These rules can limit what you are able to do, and so should be considered thoughtfully if you need to file a subsequent bankruptcy case. In some instances these rules lead to what is informally known as a Chapter 20, which is a combination of a Chapter 7 and 13 during the same case, most often achieved by converting from one chapter to the other before discharge is entered. It is also important to note the timeline restrictions are as to the actual entry of discharge, and not to the act of filing a case. That said, you will need help making sure any case you file is done properly. Call our office to learn more, and find out what you are eligible to file.

For more information about debt management and what you can to do get out of debt, contact us at We will help by coming up with solutions that work for you.

Bankruptcy Basics And What You Need To Know To File A Case

Bankruptcy is a valuable tool that allows you to get rid of overwhelming debt, or at least reduce the amounts you owe. But you will only reap the benefits offered if you are understand how the process works, and play your part in the case. Typically, this means you need to provide all of the debt and income information to your attorney, so your petition can be prepared. You will also be required to appear at an initial hearing before the Trustee assigned to your case, and answer any questions the Trustee has as well as any questions from creditors. You can expect the Trustee to ask you about your assets, and what lead to the need to file bankruptcy. This line of questioning is not intended to embarrass you, or to pepper you with questions. As for the creditors that may be present at the initial meeting, you can expect to be asked whether you intend to reaffirm the debt held by the creditor. Most times the lenders for your house and car ask these questions, as unsecured credit card debts are rarely reaffirmed. Once your initial hearing is over, you may or may not have to return to Court.

The process described above is a pretty basic overview of bankruptcy, and most cases go off without a hitch. Some of the more specific things you might encounter during your case include:

• If you file a Chapter 13 you will need to come up with a plan of repayment of your debts. This plan will include repayment terms for all the debt you have, including unsecured debt. The amount paid back to an unsecured creditor will only be a percentage of the total debt, most times just pennies on the dollar. As for your secured debts, a Chapter 13 will allow you to pay past due house payments out over time, and you can pay the value of your car rather than the full balance owed.
• If you have student loan debt, you should not expect to get out paying it back unless there are extraordinary circumstances. If you believe this to be your case, it is critical to have your attorney perform an in depth review of your overall financial picture and what your financial picture will look like even after you file your case. Once this is done, a determination as to whether you should attempt to discharge student loan debt can be made.
• If there are judgment liens on any of your property, you may be eligible to have those released during your bankruptcy. It is essential to make a request for the removal, so be sure you let your attorney know about any liens against your property.

Once you have made the decision to file for bankruptcy, let us help you. We will take your data and provide you the information needed about how your case will be filed, and then file for you. Call us to learn more.

For more information about bankruptcy, contact us at We will help by coming up with solutions that work for you.

Three Steps To Take Before You File Bankruptcy

Most things go much more smoothly when you are prepared for what is involved. For instance, if you have a test or paper coming due, or a big project at work, you are well advised to start preparing early and staying on top of your preparation. If you forget to study, or don’t do the research needed for a project assigned to you on your job, the chances of performing successfully begin to dwindle. The same is true with your budget, even if your budget is not currently working for you. When you have more debt than money, bankruptcy is a good answer. But before you file a case there are some things you need to do to get ready.

Three steps to take before you file bankruptcy include:

• Write down all of your monthly expenses, even the ones you think don’t count (like Netflix bills or your daily stop at Starbucks). Knowing where your money goes each month will help you to know what you can and cannot afford.
• Gather all of the documents that show your income, including paystubs for the past 6 months and at least the last two years’ worth of income tax returns. If you are married and will be filing a joint case, make sure you gather this information for both yourself and your spouse.
• Make an appointment with a knowledgeable bankruptcy attorney. When you go visit with your attorney, take your list of debts and income with you, so you can be prepared to give an accurate picture of your finances.

After your attorney reviews all of your debt and income information, you may be asked to provide additional documents, such as car titles and the deed to your house. It is best to get all of this stuff together as soon as you can, so your case can be prepared quickly. Once your case is prepared you will be asked to look it over to make sure there are no errors, and this is much easier to do if you have organized your papers in advance. We can help by letting you know what to expect during your case, and getting it ready to file for you. Once filed it is our job to stay on top of the progress in your case, and let you know about any hearings that are scheduled that require your attendance. Call us today for help; we can put you on the path to financial recovery.

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Four Things To Know About Filing Bankruptcy

When important decisions have to be made, it is best to make them with as much information as possible. When those decisions have to do with your monthly budget, the need for accurate information is at an all-time high. No one likes to struggle to make ends meet, but if that is your situation, you might consider filing for bankruptcy. Bankruptcy is a way to eliminate or reduce debt, making your budget more manageable and giving you a fresh financial start. But before you take the plunge, take a few minutes to learn about some of the bankruptcy basics and how filing a case can help you.

Four things to know about filing for bankruptcy are:

• The minute you file a case your creditors are no longer allowed to contact you. This includes calls, letters, and any pending litigation against you. If your wages are being garnished, the garnishment must also immediately stop. These benefits are courtesy of the automatic stay, which is a legal mechanism that prohibits collection action by your lenders the instant your bankruptcy case is filed.
• You will need to make a decision about what things you want to keep, and what you can live without. Most people file bankruptcy to eliminate credit card or medical debt, and free up their money to pay their house and car payments instead. If that is your choice, you need to understand that you have to pay for the things you keep, as bankruptcy is not about keeping collateral without paying.
• If you reaffirm a debt, that debt will remain due even after you case is finished. What this means is that if you skip a payment, the lender is now allowed to call you and ask for payment. This is in stark contrast to debts that are not reaffirmed. A debt that has not been reaffirmed does not have to be repaid and the creditor cannot ask you for payment.
• A Chapter 7 case is one where your debts are liquidated, meaning they will no longer be due once the discharge order is entered in your case. A Chapter 7 takes between 3 to 6 months to complete and will allow you to eliminate all of your unsecured debt. A Chapter 13 is more like debt consolidation, and during the case (which can take up to 5 years), you will pay back at least a portion of your unsecured debt.

We know you work hard for your money, and when it gets tight it can also get frustrating. But there is light at the end of the tunnel, and we can help you get there. Call us today to find out more about how filing for bankruptcy can help you.

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