A reaffirmation is an official way to “reobligate” yourself on the loan. This involves the lender sending us a reaffirmation contract to be signed by you.
How Do I Know if I Should File Bankruptcy?
It’s a question that everyone who has been struggling with debt and debt collectors has to ask themselves. The question is complicated by the fact that there are so many myths surrounding bankruptcy. Many people assume bankruptcy is the worst thing you could ever do to your credit and avoid looking into the option altogether. They assume that bankruptcy means you are going to lose everything you own and will have a black mark on your credit that will prevent you from getting credit, a new job, or an apartment in the future.
All of these myths stem from one common misconception – the misconception that the bankruptcy laws are in place to somehow exact a punishment on those who use them in return for wiping out their debts. But this is not the case at all. The bankruptcy laws are in place to give people saddled with burdensome debt a fresh start. The laws are not designed to take everything you own: Congress has no interest of leaving you broke on the street and create a strain on state welfare programs. The fact of the matter is that most people filing for chapter 7 bankruptcy protect everything that they own. Their debts are wiped out (with some exceptions like child support or taxes meeting certain criteria). They are able to move forward with their lives and rebuild their credit more quickly than if they were forced to climb out of the $20k, $30, $40k, or more hole that they’ve fallen into.
Another misconception is that the only people that file for bankruptcy are irresponsible, careless, dumb or otherwise unethical and the reason they’re filing bankruptcy is because of the type of person they are. The fact of the matter is that most people have some amount of debt that they pay: credit cards, student loans, mortgage, auto loans, etc. As long as people have a steady income, everything is fine and people make their debt payments. The top 3 triggers for bankruptcy are: a) Unemployment/ Underemployment; b) Medical Expenses; and c) Divorce. If you’ll notice, those 3 triggers are all external factors. So people are not filing bankruptcy because they’re horrible careless people that don’t try to pay their debts. They’re filing bankruptcy because something has happened in their life so that they cannot afford to pay their basic living expenses (e.g., put food on the table) and meet the debt payments.
Bankruptcy is an option. It’s the last option, but should be considered an option. So now that you’ve decided to push aside the myths and the hype, how do you know if bankruptcy can help you? There is no substitute for consulting with an experienced bankruptcy lawyer, but knowing common signs of whether you should pick up the phone an call a bankruptcy lawyer are worth noting:
1. Paying the minimums on credit cards and continuing to use the cards;
2. Using credit cards to pay for basic living expenses and not being able to make the payments;
3. Using one card/ line of credit/ payday loan to make payments on others;
4. Pulling money from retirement accounts or life insurance policies to get by;
5. Beginning to ignore the problem by not opening bills and collections notices and ignoring collection calls;
6. Feeling hopeless that you can get out of the mess.
If you’ve experienced one or more of the above. Make today the day that you begin working on the solution and call us to schedule a FREE consultation. Absolutely no obligation. But you owe it to yourself to speak with a professional who can identify your options and give you all the pros and cons.
Chapter 13 is essentially a payment plan that you organize through the court system. Think of it as a consolidation loan with teeth.
There are 2 things you must do after your case is filed: (1) attend the meeting of creditors (aka the 341 hearing); and (2) complete a debtor’s education course via phone within 75 days from the date your case was filed. The 341 hearing is sometimes referred to as the meeting of creditors because your creditors can attend the meeting and ask you questions about the information contained in your petition.