Bankruptcy is supposed to get rid of your debts, right? Well…it depends on what type of case you file and what plans you have for your property. If you want to hang on to certain things, you will still have to make the payments for those items. And most times the payments are made after you sign new paperwork with the lender, within your bankruptcy case, promising to keep paying. The process is referred to as reaffirmation, and it is how most people keep their houses and cars when they file for bankruptcy.
Common debts that are still required to be paid even in a bankrupt situation are:
• House payments
• Car payments
• Payments for collateral you’ve given the lender a security interest in when the purchase was made (in some instances this might include a television or furniture bought on credit at the store rather than with a credit card)
Even when you have to pay back some of your debts, filing bankruptcy is a good way to fix your finances. In a Chapter 7 case you will be able to completely wipe out your unsecured credit card debts, and in a Chapter 13 you will be allowed to pay the value of your car at a lower interest rate rather than paying the balance on the loan at the contract rate of interest. The savings on these things makes it easier for you to pay the rest of your bills and maybe even put some money aside for when an emergency arises. When you file for bankruptcy you also get the benefit of the automatic stay, which prohibits creditors from taking certain actions against you. Among the prohibited actions are continued garnishments, actions to foreclose on your home, and attempts to repossess you auto. The peace of mind that comes with knowing you will not lose part of your money to a garnishment or will not be forced out of your home, or on foot if your car is repossessed is a huge benefit. If you are behind on your monthly obligations, let us help. We will let you know what type of case you qualify to file, and how it can benefit you.
For more information about how to handle overwhelming debt, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.