People that are new to these types of financial troubles may have never experienced credit card companies calling and demanding payment. It is extremely stressful, particularly if you simply do not have the money to pay them.
Because of the level of financial distress in this country, debt collectors are more persistent and aggressive than ever. When you are in the midst of the financial storm, the last thing you need is the constant, unrelenting demand for money that you simply do not have.
It is important to know that there are laws to protect the consumer. The Fair Debt Collection Practices Act prohibits debt collectors from using abusive, unfair and deceptive practices to collect their debt. However, even when a collector stays within the confines of this law, they can call you repeatedly and strike fear into the hearts of many.
If you simply are unable to make ends meet, it may be time to consider filing bankruptcy. Bankruptcy was created to give individual in serious financial trouble a fresh start. Bankruptcy can provide you the breathing space you need to be able to get back on solid financial ground.
There are two main types of personal bankruptcy available, Chapter 7 or Chapter 13. A Chapter 7 can be used to discharge your unsecured debt. A Chapter 13 is normally for people who make too much to qualify for a chapter 7. It is a form of debt reorganization, where you will pay a portion of your debt to your creditors via a payment plan over the course of 3-5 years. The amount you pay, depends entirely on your disposable income, and could vary from as little as $100.00 per month upwards.
A major advantage of filing either types of bankruptcy is that all collection efforts must stop immediately. This is known as the “automatic stay” provision. Once you retain an attorney and your initial bankruptcy petition is filed, all of your creditors are immediately barred from contacting you in any way. If you are constantly being hounded and harassed by creditors on a daily basis, this is no small thing.
The automatic stay provision is a powerful tool. If you are about to be evicted from your home, are behind in child support payments, or are about to have your utilities shut off, the automatic stay provision can truly be a lifesaver.
An automatic stay can:
Stop foreclosure. The automatic stay will stop the foreclosure proceedings immediately. This will of course not solve the problem that caused the foreclosure, but it will buy you time to come up with a solution.
Stop eviction. If you landlord is about to evict you, and automatic stay can stall the eviction process. However, if your landlord already has a judgment against you, the automatic stay may not provide relief. Courts generally side with the landlord on these types of issues, so it is important to work closely with your attorney if you are in this situation.
Stop wage garnishments. If your wages are currently being garnished, the automatic stay will stop this.
Stop utilities from being disconnected. When you have an automatic stay, the utility company will be unable to disconnect your service for at least 20 days. While this is not a permanent solution, it buys you valuable time to look into a solution.
Stop creditor calls. It is unnerving to have the phone ring constantly, with each call demanding money that you simply do not have. You also may be receiving letter after collection letter demanding payment. The automatic stay will stop these collection efforts in their tracks.
Filing bankruptcy is not an easy decision. However, it is a valuable tool for consumers to get the relief they need and financially regroup. Take the first important step to get back on the road to financial stability and call today.
Consultations are free. We have two offices conveniently located to serve you, Glendale 818-334-5445, or 818-552-4500, and Cerritos 562-865-4480 or 562-356-9931.
Law Offices of Paul M. Allen
(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.)