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Medina Bankruptcy Law Blog

4 reasons to consider Chapter 13 bankruptcy

Declaring bankruptcy is a big decision, and it is important to carefully consider all the potential benefits, weighing them against the specifics of your situation. Only then can you determine exactly what type of bankruptcy is the right fit for you and how to proceed.

To help you get started, here are a few reasons why you may want to consider Chapter 13:

  1. Collection activities against you have to stop. Are you tired of getting phone calls from the lenders? Are you sick of the threat of asset repossession? Once your bankruptcy case begins, all of that has to stop until the case ends. It gives you a much-needed break.
  2. It can stop foreclosure. This is the most serious type of asset repossession most people will ever face. Just filing bankruptcy creates an automatic stay. It saves your home on a temporary basis. It gives you a chance to work out the details and perhaps put an end to the foreclosure entirely.
  3. It gives you more time to pay off your debt. Chapter 13, unlike Chapter 7, does not focus on asset liquidation. Instead, it gives you a repayment plan. This buys you some time -- often, three to five years -- to pay your debt. If the problem is just that you can't pay it all at once, this is an ideal solution.
  4. You can get current on what you owe, including your mortgage. Your bankruptcy plan will carefully help you move forward so that the end result is that you are current on your payments once again, stopping the collections activities and eliminating the need for foreclosure.

What is the "meeting of creditors" in Chapter 7 bankruptcy?

Your Chapter 7 bankruptcy proceedings are all about absolving you of as many of your existing debt obligations as possible. This means that -- after selling off your unexempt assets -- the creditors to whom you owe money will not receive anything else, and your remaining debts covered by the bankruptcy will be dissolved.

Because this process will have a financial impact on your creditors, they will have the opportunity to ask questions about the process in a "meeting of creditors."

Get legitimate help when facing foreclosure in Ohio

When you can't make your mortgage payments, your lender could begin sending you foreclosure notices. Because you haven't paid your loan as agreed, your Ohio lender can threaten to take possession of your home, evict you and sell the property to recoup the loan.

Help!

Are you being targeted in a debt relief scam?

Ohio residents who are mired in debt can find themselves the targets of scams that promise to repair their credit and negotiate their payment obligations. Desperate people tend to latch on to anything that promises to help them out of their predicament. However, falling for one of these debt relief scams can only wind up costing you more of your hard-earned money.

These scammers look for consumers who have run up huge credit card bills. They may send fliers in the mail or "robocall" their victims. They promise to negotiate lower settlement amounts to creditors -- for a hefty fee, of course.

Filing bankruptcy comes with specific responsibilities

The crushing financial impact of being underwater in debt can make every aspect of your life miserable. When you are in this position, finding a way to address the debt becomes a priority. Some people might come out of the woodwork to offer you seemingly easy ways to get out of debt fast. Don't fall for these. The old adage "if it seems too good to be true, it probably is" definitely applies to these cases.

One option that can help you address the debt is bankruptcy, which is commonly handled through a Chapter 7 or Chapter 13 case. Many people aren't trying to do this because they want to pay for their bills. If you are thinking this way, remember that bankruptcy protection isn't an easy way out. Not only do you have to meet the requirements for the chapter you are going to file, but you also have specific responsibilities to uphold.

Study: The value of foreclosed homes is increasing quickly

The general trend for home values in the United States, in the wake of the recession and the dramatic dip in value that it created, has been a notable increase. While there are exceptions, many homeowners have seen the values of their homes rise.

However, a new study looked at homes that people lost in the Great Recession through foreclosure. What it found was very interesting.

How to get debt relief while keeping your house

Carrying enormous amounts of debt is no way to live. It can be the cause of endless worry and stress, leaving you and your family unable to fully enjoy the simple pleasures of life.

While it is likely that you have considered the different options available as a debtor in the state of Ohio, you may have come to the conclusion that you would not want to go through the process of bankruptcy if it means losing your house and car.

Did you find a debt relief scam?

You have to be very careful with debt relief programs. Some of them absolutely are scams, and they can significantly alter your financial future.

For example, one scam that was eventually uncovered had simply taken payments from people without ever doing anything to eliminate their debt. These people did not know this and thought they were out of debt. They assumed everything was taken care of.

Tips to help you actually follow your budget

As you look into your debt relief options, you know that the key to staying out of debt in the future is to create a budget and stick to it. The first part is easy; you've tried it already. The second part is where it gets difficult. How can you actually stay on budget and get control over your money?

Here are a number of helpful tips:

  • Put money into savings automatically. You can use your online banking system to set up weekly transfers that happen on schedule. Without that money sitting in your checking account, you're less likely to spend it.
  • Use auto payments for your bills. Using a credit card wisely can help you build up your credit score, and one way to do that is to automatically pay your bills every month. Then you simply pay off the card at the end of the month and you know you did not forget anything.
  • Always round up. Tracking exact numbers for your budget can get complex, and saving receipts is frustrating. Instead, just track your spending by rounding up. $12.17 for a pizza becomes $13.00. When you add up your budget, you know you'll have enough -- and even a little extra.
  • Have an emergency fund. Your budget should not max out your earnings. Leave a little bit extra for those things you cannot predict, like car repairs. Don't let one incident ruin the entire budget.

How did I end up considering bankruptcy?

Personal bankruptcy is not exactly what it seems to most people, and the results are often better than people expect. The concept means different things to different people suffering massive debt. The right type can rescue a family's financial future.

What are the different types of bankruptcies?

Get the debt relief you need, the personal attention you deserve.

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