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Creditors are harassing me!

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Q: Creditors are harassing me – but I lost my job, and cannot pay. How do I stop them calling?

Paul AllenA: If you cannot pay your bills, creditors will take steps to collect. That’s natural, but continued harassment can be emotionally depressing. If you have lost your job, or simply cannot cope, call me. You have options, and depending on your situation, I will help you choose the option that’s best for you. Federal bankruptcy laws are designed to give people in distress, a fresh start, and may be the right solution for you.

Q: Will a bankruptcy stop collection agencies from calling me?

A: Yes, filing a bankruptcy protects you from creditor harassment, and provides peace of mind. Creditors will not contact you if you filed bankruptcy and have an attorney representing you. Otherwise they risk being cited for contempt of federal court, something they will not risk. Another reason to consider a bankruptcy now, even if you do not have assets to protect, is that after a bankruptcy, you can immediately begin the process of repairing your credit. This usually takes between 6 to 12 months, so an early start will get you there faster.

Q: I have just received a summons from a creditor. Is it too late to file a bankruptcy?

A: No. When you file for bankruptcy, an automatic stay goes into effect immediately stopping any lawsuit filed against you and any action against your property by a creditor, collection agency or government entity. This can be very important, Especially if you are at risk of being evicted or foreclosed on, being found in contempt for failure to pay child support or losing such basic resources as utility services, welfare or unemployment.

Here is how the automatic stay affects some common emergencies:

Utility disconnections. If you’re behind on a utility bill and the company is threatening to disconnect your water, electric, gas or telephone service, the automatic stay will prevent the disconnection for at least 20 days. Bankruptcy will also discharge the past due debts for utility service. Although the amount of a utility bill itself rarely justifies a bankruptcy filing, preventing electrical service cutoff might be justification enough.

Q: Will filing a bankruptcy stop the foreclosure on my home?

A: If your home mortgage is being foreclosed on, the automatic stay temporarily stops the proceedings, but the creditor will often be able to proceed with the foreclosure sooner or later. If you are facing foreclosure and wish to save your home, Chapter 13 bankruptcy is almost always a better remedy than Chapter 7 bankruptcy if you qualify, because it provides for a repayment plan on the arrears.

Q: Can a bankruptcy stop an eviction?

A: If you are being evicted from your home, the automatic stay can buy you a several months, just enough time to find somewhere else to live. However, don’t file for bankruptcy solely because you’re being evicted. You’ll probably be better off looking for a new place to live or fighting the eviction in Municipal court instead. Remember, the main idea behind bankruptcy is to discharge debt.

Q: Will bankruptcy protect me; I’m behind in my child support payments?

A: If you owe child support or alimony, bankruptcy will not interrupt your obligation to make current payments. And while the automatic stay will temporarily stop proceedings to collect back support you owe, usually the bankruptcy court will permit collection to go forward if the creditor requests it. In any event, these debts will survive bankruptcy intact and will have to be paid once the case is closed. Chapter 13, however, lets you pay the back support as part of the repayment plan.

Q: A creditor is garnishing my wages. Will bankruptcy help me?

A: Yes. Although no more than 25% of your wages may be taken to satisfy a court judgment (up to 65% for child support and alimony), many people file for bankruptcy to protect their income. For some people, any loss of income is devastating. Your employer may also get angry at the expense and hassle of facilitating a succession of garnishments and take it out on their employees. Although federal law prohibits you from being fired for one garnishment, an employer can fire you for multiple garnishments. Filing for bankruptcy stops garnishments dead in their tracks. Not only will you take home a full salary, but you also can discharge the debt in bankruptcy.

Q: Should my wife and I file bankruptcy together?

A: Most married couples are better off filing for bankruptcy together, if all property and debts are community property. If, however, you are in a relatively new marriage, have not accumulated any joint (marital) property and you want to get rid of separate (premarital) debts, you are probably safe filing alone. In addition, you may want to file alone if: You live in a community property State, but your debts are primarily non-community in nature, Your spouse owns separate, valuable property, such as a second home, or you and your spouse own a house in tenancy, (look at your deed), or you and your spouse have separated.

Q: Can all debts be discharged in bankruptcy?

A: Certain categories of debts cannot be discharged in Chapter 7 bankruptcy. These are called non-dischargeable debts, and it doesn’t make much sense to file for bankruptcy if your primary goal is to get rid of them. The main ones are: Back child support or alimony obligations, Student loans that first became due fewer than seven years ago, Court-ordered restitution. Taxes less than three years past due. The bankruptcy judge may rule other debts non-dischargeable if the debt resulted from a wrongful act on your part and the creditor raises the issue and proves your bad actions in the bankruptcy court. These debts may be ones incurred on the basis of fraud, such as lying on a credit application or writing a bad check. Debts from willful or malicious injury to another or an other’s property, including assault, battery, false imprisonment, libel and slander, and debts from larceny (theft), breach of trust or embezzlement. However, even if they cannot be discharged in a Chapter 7, they can be consolidated in a Court approved repayment plan under Chapter 13 rules, which will still give you the normal bankruptcy protection against harassment, liens and garnishment.

You can also file a Chapter 13 repayment plan, that discharges all debt that would normally be discharged in Chapter 7, but includes the non-dischargeable debts in the payment plan. So even if the bulk of your debt may be nondishargable, you can still be protected by the bankruptcy Court.

So if you have too many debts, and not enough money, call the Law Offices of Paul M. Allen and schedule a free consultation. Let’s discuss your options and get you the relief you are entitled to by law. Call 818-552-4500 or 562-356-9931 today, for “Peace of mind” and a good night’s sleep tomorrow.

 (This article is for information purposes only, and does not necessary reflect the company’s opinions and views on general issues. We make no warranty, prediction nor representation, nor do we assume any legal liability for the completeness of any information and its effect on any case. Each case is different and results depend on the facts of each case. Consult with and retain counsel of your own choice if you need legal advice.)

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