Areas Of Help

Chapter 7 Debt Elimination

When a person files for Bankruptcy we help him or her to protect their assets so the creditors or courts cannot take them away. The minute you file Chapter 7 or 13, a legal protection called the “automatic stay” comes into existence and, by law, all creditor action must stop. The types of creditor actions that must cease include:

foreclosures
repossessions
harassing bill collector calls
collection letters
sheriff seizures of your personal and real property

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Chapter 7 allows you to walk away from a mortgage you cannot afford. Chapter 7 will also stop a foreclosure and give you time to find a new place to live.

Chapter 7 is a debt elimination type of bankruptcy rather than a reorganization. There is no payment plan and there is no payment plan to catch up and repay missed mortgage payments. In other words, if you are behind on your mortgage and you file Chapter 7, you will most likely need to surrender your home.

When you file a Chapter 7 debt elimination, you can stop a pending foreclosure, most likely for a few weeks to a few months. A Chapter 7 therefore, will not solve your current mortgage delinquency but it will give you breathing room and a chance to move on your terms.

Chapter 7 will also help you to walk away from credit card bills, medical expenses, repossession deficiencies, old apartment leases and personal loans. You can use Chapter 7 to cancel lease contracts, and to surrender that too-expensive car or house.

Chapter 7 bankruptcy exists because Congress recognizes that honest, hardworking people sometimes get into serious financial trouble. Despite what an aggressive bill collector may tell you, Chapter 7 is legal, it is ethical, and it functions as a powerful financial tool that you can use.

Major determining factors for a routine Chapter 7 case:

The total amount of debt
The type of debt (secured debt, judgments, credit cards, unsecured loans, taxes, student loans, etc.)
The amount and type of assets
Whether you owe either federal or state taxes
And the number of pieces of real estate owned

Chapter 13 Debt Reduction and Repayment Plan

Chapter 13 bankruptcy puts an immediate stop to foreclosure and allows you to take up to 5 years to pay back your missed mortgage payments and other debts. In most cases, you can reduce some or all of your credit card debt as well. Chapter 13 can be a good choice if you want to keep your home, cars and personal property, but you need time and better payment terms.

At its core, Chapter 13 is a payment plan. In order to qualify for Chapter 13, you must have a regular source of income, preferably in the form of a steady paycheck. Mr. LaMontagne will evaluate your income and expenses and calculate a repayment plan that will meet the approval of the Chapter 13 trustee and your bankruptcy judge. Once this plan is in place, you will remain protected from all creditor action while you fund your repayment plan. Chapter 13 plans typically last three to five years.

Chapter 13 can be a great financial tool to help you stop creditor actions that threaten your family and your way of life. The minute you file Chapter 13, a legal protection called the “automatic stay” comes into existence and, by law, all creditor action must stop. The types of creditor actions that must cease include:

foreclosures
repossessions
wage garnishments
harassing bill collector calls
collection letters

The automatic stay protection remains in force until your case pays out, or otherwise closes.

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Fair Debt Collection Practices Act (FDCPA)

The most common complaint to the Federal Trade Commission (by far) year after year is complaints about debt collectors and/or collection agencies. In April of 2006 the FTC reported that it received 66,627 complaints against third-party debt collectors in 2005. This was more than any other industry and nearly six times the amount in 1999. It is also important to note that these collection agencies recovered over 39 billion dollars in 2005. Unfortunately most consumers do not know their rights regarding these collectors and simply put up with unacceptable conduct.

Common Violations:

Constantly calling you at work when you have asked/told them not to.
Revealing your debt to third parties.
Leaving messages and not revealing they are a debt collector.
Threatening a lawsuit when they do not intend on bringing one.
Claiming that you can or will be arrested if you do not pay the debt.
Claiming that a judgment will occur immediately if you do not pay.
Claiming that they can garnish your wages if you do not pay.
Claiming that they will put a lien on your house if you do not pay.
Using abusive language with you and/or a family member.

If you believe that you have experienced one more of these violations here are some immediate steps to take prior to contacting our office.

Write out a detailed summary of all violations including the date of the calls, the collection agency, the name of the person calling and the phone numbers they called from. Save copies of all letters and notices from collection agencies. Save all phone messages and voice mails. Make note of your conversations with these bill collectors.

What kind of damages am I entitled to?
The FDCPA allows you to collect (if successful):

$1,000 of Statutory Damages
Actual damages (you lose your job, or sustain some physical or mental injuries as a result of the unlawful collection practices)
Attorneys fees and Costs