Avoid Chapter 13 Bankruptcy !For most people that run into financial difficulty especially for "homeowners" I would say this... Avoid Chapter 13 Bankruptcy if at all Possible There are many.. other alternatives as you will find from investigating this site. Alternatives that don't require filing bankruptcy, which should be used only as a LAST RESORT!
I actually used bankruptcy like many other people as my first and only option, as I mentioned many years ago when I brought my first rental property on the home page of this site.
Truth About Chapter 13 BankruptcyI wish I had avoided bankruptcy, because like many other people that take this course of action I couldn't keep up with the payment plan. Keep in mind also that if you are in an adjustable rate mortgage at the time that you file; Your Mortgage Payment Can Go Up also!.
Like I said earlier, I wound up losing my first property and the negative effect on my credit lasted for 10 years. I can't tell you how many times I looked like a nervous wreck- trying to scrape together the Trustee payment for the (Mortgage Arrears) after barely just making the mortgage payment before it would be considered late. Alway's stressed that my case would be dismissed from the court and my property would be foreclosed on. Many times I was so afraid of sending a regular check by snail mail, that I would jump into my car after getting a tellers check from the bank, and rush to the trustee's office to make the payment in (person). I was lucky that the Trustee's office was pretty close to where I worked at that time, so I could literally take off at lunch time to do this, other people are not that lucky, if you want to call that luck I guess.
Back then (pre bankruptcy law changes) if your case got dismissed which mine did; you had to go back before the trustee, to (Re-file) and explain what happened, and prove all over again with supporting documents that you could afford to make the plan work.
Here's a kicker..
One time my case got dismissed not because of me, but because my attorney didn't file paperwork that he was suppossed to file!
You get no sympathy or reprieve even in situations like this... Your case just gets Dismissed. I can't tell you the amount of people that I've spoken with over the years with similar stories.
" I got my case dismissed because no one told me when my payments were suppossed to start"
" I got my case dismissed, and I don't understand because my employer was deducting trustee money directly from my check under the Wage Earner Plan"
" I have proof that I've been making payments for the last eight months on time but my bank is posting them as late" Some of the really nasty bankruptcy court Judges are enough to make you want to Avoid Bankruptcy at all costs. I have seen people with very legitimate hardships be humiliated and threatened to have their cases dismissed by some very insensitive Judges.
Don't get me wrong Here.. There are some cases where it makes perfect sense to file bankruptcy. It's important however that you know about all of the options that are available to you to Stop a Foreclosure Although nasty Judges still exist times have changed since then especially when it comes down to the new Bankruptcy Laws that took effect recently.
The most significant change to the nation's bankruptcy laws since 1978, was the culmination of a ten year-long push by the credit card and auto-financing industries to make it harder for consumers to wipe out debts through bankruptcy. The new law toughened the rules with the intent of steering more debtors into a form of bankruptcy that requires people to repay more of their debts.
Chapter 7: Debtors wipe out most debt, though some assets might be sold to repay a portion of what's owed. In some cases, a debtor can keep his or her house and other belongings, but that varies by state.
Chapter 13 : Debtors reorganize their finances under a court-supervised plan to repay creditors as much as possible over three to five years.
The new law requires people seeking bankruptcy protection to pay higher filing fees and attend mandatory credit-counseling sessions with an accredited firm before and after they file. The goal is to discourage people from filing if they don't have to, and if they do, to pay off as much of their debt as possible. Click below you will find some of the major provisions.
By the way this is not meant to be legal advise. Please consult your attorney. Bankruptcy Abuse and Consumer Protection Act of 2005 Avoid Chapter 13 Bankruptcy |