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Should I file bankruptcy?

If you are wondering “should I file for bankruptcy?” the answer is probably already YES, however go ahead and read through the questions below and see how you fair, and remember, you’re not alone.

Have you been served with legal papers, are you being sued, or are your wages already being garnished?
Are you receiving an overwhelming amount of harassing phone calls from creditors?
Do you have trouble seeing a way out of your debt, or feel like you can’t do this alone?
Are you only paying the minimum payments required on your credit cards or bills?
Do you skip payments on some bills in order to pay others?
Do you find yourself making regular payments without any of your balances going down?
Do you pay over 20 percent interest on any of your debt?
Do you have multiple mortgages on your home?
Do you need help?

You’ve done everything right, yet you still find yourself drowning in debt and unable to shake creditors and pay any of your bills on time. Were you hit by the housing collapse, lose your job or go through a bad divorce? Good people can run into bad credit situations too, you’re not alone.

Call Eileen Dolaghan at Dolaghan Law to get your free consultation today. You owe it to yourself to seek financial freedom. Call 904-354-4935.

What is a Chapter 7 bankruptcy?

Under the federal bankruptcy statute, a discharge is a release of the debtor from personal liability for certain specified types of debts. This, in basic terms, means that the debtor (the person who filed the bankruptcy) is no longer required by law to pay any debts that are discharged. The discharge operates as a permanent order directed to the creditors of the debtor that they refrain from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, lawsuits and personal contacts. If you have further questions regarding Chapter 7 bankruptcy, contact Eileen Dolaghan.

What is a Chapter 13 bankruptcy?

A Chapter 13 bankruptcy is also called a wage earner’s plan. It allows individuals with regular income to develop a plan to repay all or part of their debts. Under Chapter 13, debtors propose a repayment plan to make installments to creditors over three to five years. If the debtor’s current monthly income is less than the applicable state median, the plan will be for three years unless the court approves a longer period “for cause.” If the debtor’s current monthly income is greater than the applicable state median, the plan generally must be for five years. In no case may a plan provide for payments for longer than five years. If you have further questions regarding Chapter 13 bankruptcy, call Eileen.

If I file for bankruptcy, is my credit ruined forever?

No. If you otherwise keep your credit clean after the filing of bankruptcy, your credit can be largely rehabilitated in about three years after you receive the discharge of debts in bankruptcy. You must reestablish your credit, by paying bills on time, making car payments on time, when you do establish new credit cards, use them wisely and pay the statements in a timely manner. If you have further questions regarding bankruptcy, contact Dolaghan Law.

Can bankruptcy help me with my credit card debts?

Yes. Credit card debt is the common debt when a person files for bankruptcy. Almost all credit cards are those unsecured debts, meaning the creditor (whoever issued your cards) cannot claim an interest on any items purchased with those cards. Therefore, those debts are discharged and forgiven in full in Chapter 7.  In Chapter 13 unsecured debts, like credit cards, will be repaid over time, through your debt consolidation process. The amount repaid – if any – will depend on calculations surrounding your income, expenses and assets.

If I file for bankruptcy does my husband or wife have to file bankruptcy, too?

No, although it is often wise for both husband and wife to file a bankruptcy together if both have significant joint debt. If they both owe on a credit card debt, and only one spouse files for bankruptcy, the credit card company will demand payment from the spouse not filing for bankruptcy. If you have further questions, contact Eileen at Dolaghan Law.

Can filing for bankruptcy help me save my home?

Filing for bankruptcy can be effective in dealing with your home through a variety of circumstances, including:
– Helping you catch up if you are behind on your mortgage by giving you more time
– Getting rid of unsecured second mortgages and lines of credit against the home
– Dissolving other debts so you may afford your mortgage payment

In today’s market, many people are now “underwater” with their homes or mortgages, meaning the home is worth less than the amount owed on mortgages.

If you were hit by the market collapse, lost your job, going through a divorce, facing overall debt or other circumstances leading causing you to fall behind on your mortgage payments, Chapter 13 may give you the time to make up the missed payments and continue with current mortgage payments. If you have multiple loans against your home, you can sometimes get rid of the secondary mortgage if the home is worth less than the first mortgage.

Do I have to take a credit counseling course prior to filing?

Yes, a credit counseling class must be completed prior to the filing of your bankruptcy case. Credit counseling classes can be attended in person, on the phone or on the internet. Once the credit counseling class has been completed, a certificate will be issued which must be filed in your bankruptcy case. Certificates of credit counseling go stale after six (6) months, so the class should be taken shortly before you plan to file. If you have further questions, contact Eileen Dolaghan today.