Is your mailbox full of collection letters? When the phone rings, is it a collector calling? Are you losing sleep because of debt-stress? If the answer is yes, then bankruptcy may be an option for you. Many people fear a bankruptcy will ruin credit and their financial future. Reality is – bankruptcy is probably the best thing an indebted person can do.
If your debt is in collections, your credit score is already affected. Filing a bankruptcy will not make it worse. Instead, a discharge provides you with the opportunity to reestablish and rebuild. Sometimes the only thing you can say is, “I can’t pay you.”
It’s easy to fall into a cycle where you pay the minimum payment; use the credit card because income went to the minimum and the balance stays the same. If you opt to stop paying the minimums, the balance can quickly double with interest and late fees. You get trapped in a credit nightmare.
Filing a Chapter 7 or Chapter 13 bankruptcy will stop the collections. You can start over and rebuild. If your financial goal is to purchase a house, a new vehicle or simple refinance, you can save money by eliminating the debt for a down payment.
Many homeowners apply for loan modifications during difficult financial times. They call mortgage companies and are told to show a financial hardship (some “consultants” tell homeowners to STOP paying their mortgage). Majority of homeowners then spend countless hours faxing and mailing the same documents in hope their mortgage company receives the package.
In most cases, during “loan modification” review, homeowners are not paying the mortgage. A loan modification review can quickly end in a denial and a foreclosure. Some modification “reviews” can take years.
I spoke with a woman today who claimed her mortgage company told her loan was in underwriting. She ignored letters from her mortgage company because the “person on the phone” told her she was still under review. This morning she received a sheriff sale notice with a sale date of one week.
It took her almost 2 years to call a law firm. She was promised this and promised that and nothing came into fruition. She is scheduled to meet with Geraci Law where we will figure out a plan to save her home. If you are struggling to pay your mortgage, call Geraci Law. A Chapter 7 can eliminate all of your other debt so you can focus on the mortgage. If you are behind, a Chapter 13 is a great way to stop the foreclosure and give you a plan to get current.
If you have a sheriff sale, you have a time stamp. To stop the sale, the case must be filed before the auction. Call us sooner than later so we can keep you in your home!
A woman in Michigan sued Kohl’s department stores for harassment. She owes a $20 debt and claims collectors harassed her with calls and letters – all over $20. She was driven to the point of filing legal action against her financer. Collectors are just doing their job. Some are given a list of names and debts and are expected to call until payment is received.
Creditors will call from dawn until dusk and on weekends. If you are ignoring the phone and not opening mail because you are tired of saying, “I cannot pay you” – maybe it’s time for a different approach.
Bankruptcy will STOP the collectors. Once the case is filed and creditors are notified – collectors cannot contact you. Now, it’s not beneficial to file a bankruptcy against a $20 bill. But if you owe $10,000 or more in debt and the calls are causing sleepless nights and stress, bankruptcy can help!
You are probably thinking if I can’t pay the collectors – how can I pay an attorney? The answer is you meet with Geraci Law and together we can figure out a payment arrangement to fit your budget.
Solutions to problems are not found by burying your head in the sand. If you are worried about the constant phone calls and balancing act of robbing Peter to pay Paul – call Geraci Law. We specialize in your problem.
Retirement. It’s the light at the end of the tunnel, the tape at the finish line, and for many a tremendous loss of income. Many financial experts stress saving for retirement early. The more you save, the happier you’ll be in the golden years.
But what if you have debt? Trying to save money for retirement does not seem like an urgent problem when you have thousands in debt. You assume you’ll start saving when the other debt is paid off. If you’re only paying minimums, it could be years until the debt is paid.
Some people will try to borrow against retirement accounts. Often, it’s a Band-Aid for a wound. Unless you take enough money from your retirement to pay all of your debt – you will still owe creditors and owe the retirement loan. You could face tax penalties for an early withdrawal and have less retirement savings.
Bankruptcy could be a solution to the problem. Think about how the minimum payments. If you eliminate the debt with a Chapter 7, the money for minimum payments can be saved for retirement. A Chapter 13 is a budget based repayment plan. You consolidate your bills based on what you can afford. When the plan is complete, you use the affordable Chapter 13 payment for retirement!
Please visit Bankrate for a useful calculator (you can click here). You can input income and number of years to retire to find the amount you need to save to meet your current annual income. You’ll be amazed at the amount. If your current plan to retire is not working and you need help with debt, call Geraci Law. Peter Francis Geraci is a financial expert and his attorneys can determine if bankruptcy is right for you.
When a car is repossessed, financers require large down payments to release vehicles. There are late fees, tow fees and storage fees added to the balance. So, if you want your vehicle back, you will probably pay more than the payments you fell behind on.
Generally a person is given 21 days to retrieve a vehicle before it is auctioned. During this time you must figure out what you want to do with the car. Once the vehicle is sold, it is no longer your vehicle to try and redeem. Usually vehicles are sold for next to nothing so not only are you car-less but you probably owe a large balance on a car you do not have anymore.
You have a solution to the problem! File a bankruptcy with Peter Francis Geraci and Geraci Law. If you want to keep car, a Chapter 13 bankruptcy must be filed before the car is sold. Geraci Law attorneys can file in as little as one day. A Chapter 13 is a 3-5 year repayment plan consolidating debt based on your income and expenses.
If you do not want the vehicle, you will owe a deficiency after the car is sold. A Chapter 7 bankruptcy can eliminate your obligation to the balance with any other credit cards, medical or other debt. Filing either bankruptcy will stop creditors from calling and stop any lawsuits!
There seems to be countless Web sites, pamphlets and talking heads on television talking about foreclosure. But there is not much information about how to stop the process. Once the foreclosure judgment is entered, most banks want it all or nothing. I talk to countless people able to pay the majority of arrears and their mortgage company will not accept partial payment.
It’s very simple – if you can afford your house, a Chapter 13 can help you. A Chapter 13 bankruptcy will not modify or change your monthly mortgage payment. But, you can pay the mortgage arrears over a 3-5 year repayment plan. You will start paying the regular mortgage payment and another to the bankruptcy court to get current.
So you fall behind on your mortgage, file a Chapter 13 repayment plan and then there is a loss of income. Sometimes it seems easier to bury your head in the sand and ignore the problem. But this is why you hire Geraci Law! You hire Peter Francis Geraci and Geraci Law Attorneys because we are here to help you. Almost every problem has a solution.
A similar situation happened to an Illinois couple. The wife lost her job during the Chapter 13 plan causing a loss of household income. Regular monthly mortgage payments fell behind and the couple was facing a motion to modify the stay (meaning the house is taken out of bankruptcy protection). The wife returned to work but could not pay the full balance to vacate the motion. Instead of the mortgage company’s motion being granted, Geraci Law Attorney Ashley Chike was able to work out a six month payment plan for the arrears. She was able to keep the house in the bankruptcy and prevent a foreclosure.
Earlier this week, the Seattle City Council approved the largest increase in minimum wage. The minimum wage in Seattle is $15 per hour (minimum wage in Illinois is only $8.25 per hour). The Seattle city council took a step toward balancing income inequality.
If other cities would follow the example, many people would not need to rely on credit as an income supplement. Instead, a person can budget to live within their means. When you are only making $330 per week (before taxes), using credit cards or payday loans as a crutch seems like an easy solution.
The problem is paying minimums means you are paying interest. The debt is not getting paid off and the balance might be increasing. So you are stuck in a bad cycle where you are current with the minimums but using credit because your income is going to paying the minimums.
Break the cycle and consider bankruptcy! You can file a bankruptcy and eliminate the debt allowing you to budget even with minimum wage earnings. So when your state or city increases the minimum wage, you have more income to save instead of paying toward high interest debt.
How much debt do I need to file a bankruptcy? It’s a common question. What seems like a small amount to one person can seem like millions to someone else. Generally speaking, the biggest qualification for a bankruptcy is debt you cannot pay. But how much is enough?
The best place to start is your credit report. You can pull a free credit report annually (www.annualcreditreport.com). Many people are surprised when debt and judgments show up from years ago.
It’s a common misconception that unpaid debt will just disappear. It is not magic – debt doesn’t just go away. Your creditors may write off the balance but the debt is still owed. Creditors just consider you to be a bad customer but are not collecting.
If total debt is approximately $10,000 or more, consider a bankruptcy. A Chapter 7 bankruptcy will eliminate any obligation to the balance and prevent creditors from calling you, suing you or trying to collect. If you have less debt but are behind on a car payment or a mortgage, a Chapter 13 bankruptcy can be an option. You can consolidate your bills into an interest free repayment plan and bring delinquent loan payments current.
If you are considering a bankruptcy, contact Geraci Law. We offer free phone and in-office bankruptcy consultations to figure out the best option for you. If we cannot help you, we’ll point you in the right direction.
I will blog often about student loan debt. Student loans are just a bill you must pay. Most people have education debt in some form or another. Federal and private student loans are not typically handled by a bankruptcy filing. However, other debts like financed cars, credit cards can hinder student loans from being paid.
Student loans are the next housing bubble. Most families simply cannot afford to send children to college without financial help. Other than working with the financer directly (there are some programs available) there is not a 3rd party program to consolidate loans to an affordable payment. Simply, you must pay the loans.
On July 1st, the interest rates on federal student loans will increase. Stafford loans for undergrads will rise from 3.86% to 4.66% and PLUS loans will increase from 6.41% to 7.21%. If you have a large balance in student loans and other debt, the increased payment could significantly affect your budget.
Bankruptcy will not help eliminate your student loans. But, you could eliminate the rest of your debt to make the loans affordable. When there is substantial other debt (i.e. credit cards, payday loans, etc), something has to give. Whatever is not paid, can go into collections and ultimately into a lawsuit.
Take the long weekend and make a budget. You can use a Geraci Law version by clicking here. If you have more going out then coming in, give us a call to see if bankruptcy can help!
The Consumer Financial Protection Bureau released a report analyzing the effect of medical bills on credit scores. Findings show unpaid medical bills carry the same weight as unpaid rent when calculating scores. Medical debt and credit scores
Many people do not realize they owe medical bills. After a hospital stay or doctor’s visit, it’s easy to assume insurance covers 100% of the cost. If unpaid, a bill can go to collections and start negatively affecting a credit score.
Debt is reported to credit bureaus in two ways – from the original creditor (i.e. doctor, hospital) or from a collection agency. Majority (close to 99.4% according to Consumer Financial Protection Bureau) is reported by collection agencies.
Most medical bills are caused by expensive and unexpected procedures – i.e. emergency surgeries, hospital stays, and emergency room visits. Insurance may pay part but not the entire bill. You could easily find yourself owing thousands for an emergency room visit.
Bankruptcy is an option. If you have a tremendous amount of medical bills, filing a bankruptcy will alleviate the stress that comes with owing. I spoke with a man from Illinois who was diagnosed as a diabetic. He was uninsured and spent three days in the hospital. In the end, the bills amounted to over $80,000. Without a bankruptcy option, he would spend the rest of his life trying to pay down a three day visit.