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When faced with the decision of whether or not bankruptcy is right for you, it is important to research your options and speak to an experienced bankruptcy attorney.

What type of bankruptcy can I file?

The two most common bankruptcies people file are a Chapter 7 or a Chapter 13 bankruptcy. A Chapter 7 bankruptcy involves a complete discharge of most unsecured debts such as credit cards, medical bills, personal loans, civil judgments, broken leases, and some back taxes that are three years or older. A Chapter 13 bankruptcy is a reorganization of your debts into a payment plan paid over a period of time. Both a Chapter 13 and 13 bankruptcy can be used to stop foreclosures, repossessions, and wage garnishments. Bankruptcy attorneys can answer all your questions and assist you with creating a solution that works for you.

How does a Chapter 13 bankruptcy work?

A Chapter 13 bankruptcy allows you to keep your property and combines your debt into a three to five year plan that is paid through the trustee. These debts would include back mortgage payments, vehicle payments, credit cards, medical bills, personal loans, and any other type of debt.  You also have the choice of having your mortgage or vehicle payment out the Chapter 13 plan if you are current.  And depending on your situation, it is possible to eliminate the mortgage if there is no equity in your house. The payment plan is based on your disposable income. Disposable income is the difference between the money coming in minus your monthly expenses.

Will I lose my house or car if I file a Chapter 7 bankruptcy?

When you file a Chapter seven bankruptcy, you are allowed to keep specific amounts of equity in certain types of property. In most cases, this means that your equity in your house and car will be protected. Your attorney will be able to examine your assets and determine whether a Chapter 7 bankruptcy is best for you. It is rare for debtors in bankruptcy to lose their home or other assets

Who can file a Chapter 7 bankruptcy?

You must qualify to file a Chapter seven bankruptcy based on your gross income, monthly expenses, and assets. The most common type of bankruptcy filed is a Chapter 7.

How do I know filing for bankruptcy is the best option for me?

Filing for bankruptcy is a personal decision and not right for everyone. However, bankruptcy was created to give those individuals with financial difficulties a fresh start. It can stop creditors from harassing you, stop repossessions, and stop foreclosures immediately. Other credit counseling agencies cannot do this. The Mortimer law Firm will answer all your questions and assist you with creating a solution that works best for you.

How will filing bankruptcy affect my credit?

Most people who file bankruptcy will have an increase in their credit score by 25 to 100 points. Bankruptcy would seem to hurt most people’s credit, however, when you have judgments and tax liens, filing a bankruptcy helps restore a person’s credit.

Creditors cannot lend money to people with judgments or tax liens because new creditors stand behind judgment creditors who can execute and seize assets of the credit applicant. The creditors will not loan money to people with judgments and tax liens, knowing that the older creditors can garnish wages, seize bank accounts, and repossess vehicles as the loan applicant, thereby preventing the new lender from being paid.

Filing bankruptcy for most people is a fresh start, allowing them to restore their credit score. Normally, after one year following the filing of bankruptcy, the debtor can get a mortgage and acquire new vehicle financing.

By not filing bankruptcy, the debtor with judgments, tax liens, or mortgage deficiencies will have bad credit for 10 years or more.