Should I File for Bankruptcy? Part 1

My Philosophy and Overview:

I believe that Bankruptcy is a financial planning tool for people who are suffering from all kinds of debt. If you are young, Bankruptcy can provide you the relief that you need to start fresh and rebuild your financial life for the future. If you are middle aged, Bankruptcy can help you get back on track for your for retirement or college for your children. If you are later in years, Bankruptcy can give you the freedom to live and enjoy your life free of the worry and stress that comes from debt. Almost all types of debt can be addressed in the Bankruptcy process. The moment you file for bankruptcy, you are protected from your creditors. The Automatic Stay stops all collection efforts against you and against your property. Creditors must stop calling you and sending letters to you. If a creditor has already sued you, that lawsuit must stop. The automatic stay also prevents creditors from repossessing your property and from foreclosing on your home. I offer a free consultation. After reading through this information if you decide that you need my help, feel free to call. I will be happy to meet with you.

Chapter 7 Bankruptcy

This type of Bankruptcy allows you to eliminate debt without the necessity of a payment plan. As a general rule of thumb, you can keep your home, cars and retirement plans. Also, the Bankruptcy Court has created a new program to help people with the modification of their mortgages. Unfortunately, I see too many people who wait too long to get help. First they get harassed over the telephone, then they get sued and lastly they get a wage garnishment. Do not be embarrassed! No one is here to judge you or make you feel like a failure. All too often, as a last resort, people ‘cash out’ their retirement before coming to my office. If you are at that point, please stop. Most of the time cashing out your retirement will only postpone the fact that you are in trouble. Also, what makes it worse is that you end up paying income taxes on the money you take out. There is no one test to determine if you are eligible. Sometimes people who make a lot of money are eligible for Chapter 7 Bankruptcy, and, sometimes people who make very little are not. Everyone’s case is different.

Chapter 13 Bankruptcy

This type of Bankruptcy allows you to consolidate and eliminate your debt. Chapter 13 Bankruptcy is the only form of consolidation that forces your creditors to accept your proposed payment terms. All other forms of consolidation rely on the creditor’s agreement to your plan and therefore usually do not work. Some debts are not eliminated through the Bankruptcy process; however, the Chapter 13 Bankruptcy can still provide you relief and allow you to reorganize that debt into a smaller payment. For example, many times I have helped people consolidate their student loan payments into one manageable monthly payment. Most people never knew that they can use the process to consolidate their student loans, second mortgage debt (called a strip off), and, IRS taxes. Sometimes, my clients simply want to consolidate their credit cards and pay them off on their own terms without the interest, penalties and legal fees. Most importantly, you can file Chapter 13 Bankruptcy more than once, and, even immediately after filing a Chapter 7 Bankruptcy.

Home Loan Modifications

You may be surprised that many lenders are participating in the President’s HAMP loan modification program. Home loan modifications are one of the simplest ways to consolidate your mortgage debt. However, don’t be misled; it does take an average of three to six months. Further, the process requires that we work together very closely. Because my office is local, you will have no problem coming to our office to drop off paperwork, or, simply to speak with someone about your case. Most modification companies are not lawyers and are not licensed to practice law. Also, they will tell you to not pay your mortgage and give them three to five thousand dollars upfront! Be very careful before you hand over your money and fall behind on your mortgage. My office does not work that way. You only pay us while we work on your file. We have had a very good success rate and have obtained some amazing results for our clients. Feel free to stop by and see our thank you letters and cards proudly on display in our waiting room.

About the author: Stephen Levesque is the owner of the RI Bankruptcy Center and concentrates in the areas of chapter 7 and chapter 13 bankruptcy, and home loan modifications, serving clients throughout Rhode Island and Massachusetts. For more information on this subject or to setup your free consultation please call us at (401) 216-4188 or visit our website for more info.