The Federal Bankruptcy System allows debtors, who are in need of financial relief, to rid themselves of unneeded unsecured debts or to pay only a small percentage, while keeping items of collateral which are needed and paying only those secured debts which are required by law.
Secured debts are usually secured by such collateral as houses, mobile homes, automobiles, furniture, jewelry, etc…These are things you ordinarily want to keep and the bankruptcy system will almost always allow you to do so.
More importantly, in almost every instance, you will not be required to pay any interest whatsoever to the unsecured creditors and only a small interest rate to secured creditors (no matter what the contract says). This allows you to reduce your debt by potentially thousands of dollars in interest charges alone.
We generally can reduce the balance, interest and monthly payment on most of your secured debts, with the exception of your house payments. By reducing your monthly obligations on other debts, you should then be able to make your house payment and improve your cash flow.
Probably the most important facet of bankruptcy law is the "automatic stay". This is a legal phrase which means that upon the filing of a bankruptcy petition with the Federal Bankruptcy Court, all of your creditors (including the IRS and other governmental creditors) are prohibited from contacting you in any manner. They cannot telephone you or send harassing letters. Any legal proceedings (except for criminal matters) are prohibited from further action, without the permission of the Federal Bankruptcy Court.
There are generally two types of bankruptcy which apply to individuals and married couples. They are Chapter 13 (reorganization) and Chapter 7 (liquidation). In spite of what you may have heard, neither of these types of bankruptcies force you to necessarily give up your home, automobile, furniture, etc.
Note: The Federal Bankruptcy Laws are quite complicated and few attorneys handle bankruptcy matters. There are a number of things which need to be taken into account on a case by case basis, especially the personal exemptions provided for under state law. Therefore an experienced bankruptcy attorney is needed to ensure that your rights are protected and that you receive the maximum benefits under the law.
Our initial consultation is absolutely free and no pressure will be placed upon you to hire us. We wish to provide the correct information about bankruptcy, instead of having you rely on what you have heard, so that you can make a well informed decision. If we feel you can solve your financial problems without filing bankruptcy, we will advise you accordingly. We look forward to meeting with you and to helping you and your family solve your financial problems. We can almost guarantee that some form of bankruptcy will greatly reduce your debt and allow you and your family to live better and to get a "fresh start" in your lives.