Will Bankruptcy Stop Foreclosure Of My Home Loan

Bankruptcy will delay foreclosure temporarily, but will not stop or terminate it altogether.  If you file for bankruptcy, the foreclosure will be “stayed” in the State Court.  Normally, the mortgage bank then files a motion in the bankruptcy court that requests that it be allowed to proceed with the foreclosure.  In most instances, the motion will be granted, and the bank will be allowed to remove the home from the bankruptcy and proceed with the foreclosure.  A homeowner remains responsible for paying the mortgage.  A bankruptcy does not relieve the homeowner from the responsibility to pay his or her mortgage.

If homeowners are behind on their mortgage, they may choose to file a Chapter 13 bankruptcy.  A Chapter 13 bankruptcy allows the homeowner to catch-up the arrearage by paying it over the term of the of the Chapter 13 Plan, which is 3 – 5 years in length.  As long as the homeowner continues to make his or her monthly payment to the Chapter 13 Trustee while the Plan is in effect, when the Plan is completed, the arrears are caught-up and the homeowner may remain in the home.  While the Chapter 13 Plan is in effect, in addition to making the monthly Plan payment to the Trustee, the homeowner must resume making the regular mortgage payment to the bank, each month.  Homeowners must decide if they are able to afford to file Chapter 13 bankruptcy.  A Chapter 7 bankruptcy does not afford the same opportunity as a Chapter 13 to save a home from foreclosure.  If homeowners are behind on their mortgage payments, and they file a Chapter 7, the bank will be able to proceed with the foreclosure.  However, upon successful discharge of the homeowner following the Chapter 7, the bank can not sue the homeowner for and deficiency owed on the loan account.

Regardless, of what type of bankruptcy a homeowner files, the important thing is to act quickly in seeking legal help.  There are many misleading advertisements out there that promise help to homeowners who fall behind on their mortgage.  Seek qualified legal help in your area as soon as a problem arises.

Can the Credit Card Company Sue Me After the Statute of Limitations?

When you obtain a credit card, you sign a written contract.  The statute of limitations in Illinois on  a written contract is 10 years.  If 10 years has not expired, the credit card company may still bring suit against you for the unpaid balance.

What we sometimes see happening more often is this:  the original card company writes off the debt as being uncollectible.  After the account is written off by the original company, a new company comes along and offers to buy the account that has been written off from the original card company.  Usually, the new company buys the written off debt for pennies on the dollar.  The new company then brings a lawsuit against the card holder for the balance due.  In the past recent years, this has produced a multi-billion dollar industry.  These new companies that purchase the written off debt do nothing other than operate to make profits from these written off debts, and often times, they are successful in obtaining judgments against the holder of the card for the balance due.

If you are sued by a company that is not the original card holder, there are things that you can do to defend against a judgment being entered against you.  However, if the statute of limitations has not expired, the new company may proceed against you by virtue of it purchasing the account.

If you are served with a complaint and summons on such an account, review it to see if the original company is suing you, or whether it is a new company.  If it is a new company, give us a call and we’ll be happy to review it with you, and advise you of whether we can help you defend against the action.  Call us for a free, no-obligation, consultation.  We’re happy to help.

Is Bankruptcy Right For Me?

Why should you consider bankruptcy? You and your family are priority number 1! If you can not realistically take care of yourself and your family, then the same rationale applies to your creditors. Eventually, you will not be able to take care of them. Your credit will be better! This is a tough pill to swallow, but the reality is that when you eliminate your debt, you actually are improving your credit score. Generally speaking, 1/3 of your credit score with all three bureaus is based upon the debt to credit ratio. Bad credit always improves with Bankruptcy. Only good credit drops, but usually not as much as you would think and only temporarily. In most cases, its not uncommon to be in the 600 to 700 credit range within 1 to 2 years of completing bankruptcy, provided you get at least 4 main lines of credit and maintain your payments. When should you talk to an attorney about bankruptcy? 1. Your wages are being garnished.Wage garnishments take a big chunk out of your paycheck, often leaving you unable to make rent/mortgage payments, car payments, pay for medicine, or even put food on your table. A bankruptcy filing will stop garnishments immediately, and may let you get back some of the money that’s already been sent to the creditor. 2. You’re facing a foreclosure or repossession. If you’ve fallen behind on car or mortgage payments and need more time than the lender will give you to catch things up, a Chapter 13 is the perfect option. It gives you up to 5 years to bring things current (even if the lender won’t give you the time now). 3. The IRS is going after you. Bankruptcy lets you discharge, or wipe out, some taxes, and a Chapter 13 gives lets you set up a 5-year payment plan on those that aren’t. 4. You’re in over your head and don’t see a way out. If you’ve been hit with a universal default on your credit cards and are paying 29%+ APR, your house or car is worth a lot less than you owe on it, you owe a lot of debt and don’t see ever being able to pay for it…well, bankruptcy offers you the opportunity for a fresh start. Most of my clients tell me that they should have filed at least a year before they call me for the first time, and they lost a lot of money trying to fix the unfixable. If this is your situation, a Chapter 7 or 13 can help you climb out from under the debt mountain.

For further information on whether Bankruptcy is something you should consider, contact us for a free copy of “Is Filing Bankruptcy the  Right Choice For Me.”  Simply enter your name and email address below, and we will forward a copy of this helpful pamphlet to you.

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