Eric Lester Leinbach, Esquire
The bill collectors won't stop calling. They call morning, afternoon, and night. They call on Saturday, Sunday, Holidays. They will not listen to you they just want MONEY. As much as you would like to pay them, you don't have the money. Bill collectors are tireless, relentless, and frequently just rude and nasty! You offer to pay what you can, but that is not good enough. They do not care if you, your spouse or your child is sick, that you or your spouse lost your job or overtime, that you are in the middle of a divorce, they just want MONEY. Unfortunately it is money you do not have. You still need a roof over your head, food, money for gasoline, utilities, car insurance, medical expense, and the Bill Collectors don't want to hear it.
If you are overwhelmed with Credit Cards, Medical Bills, or Loans Chapter 7 is where you want to be so you can be debt free. If you are being sued, your credit is bad, if you need to start over again, then Chapter 7 is a solution not a problem. All the stress creating harassment stops, the anxiety, headaches, stomachaches stop, the loss of sleep stops, and generally all legal proceedings stop, even evictions, foreclosures, wage attachments, and wage garnishments. Repossessions just stop, actions on judgments stop, collections efforts stop. But that's not all, it is almost always easier to get a car loan and at lower interest rates after a Bankruptcy. The car Manufacturers and Car Dealers want to sell you vehicles - that is how they make money. After a Bankruptcy, you are not saddled with all that Debt and the associated high monthly payments, so you can afford to pay for the car. Before a Bankruptcy you had so much Debt that you could not possibly have afforded to pay for a car. You are actually a better credit risk with a Bankruptcy! The same is true with buying a house. Before a Bankruptcy you have high monthly payments to pay for existing Debts, and lenders are worried you will not pay them because you can not afford to pay them with all the debts you already have. After a Bankruptcy your Debts are gone, as are the associated monthly payments, So you can afford to repay a mortgage, and you will be able to obtain a Mortgage for a house easier than before a Bankruptcy.
Chapter 7 Bankruptcy also commonly referred to as a "liquidation" or "straight Bankruptcy" is the most common type of Bankruptcy. Although the term and description "liquidation" may sound scary, it should not be cause for undue concern. In Chapter 7 your Debts are "Discharged", simply put - Your bills are wiped out, gone, erased, eliminated! However, ( there is always a but isn't there) there are exceptions to "Discharge". Actually there are 30 exceptions to discharge. That means there are 30 kinds of debts you can not get rid of. It is important that you speak with a Lawyer about what these exceptions are and more importantly how these exceptions are applied and pursued buy creditors and the "Trustee" assigned to your case. If there are exceptions that may be applicable in your case, you may need to consider Chapter 13, because there are only 3 exceptions to Discharge in Chapter 13, not 30 exceptions as in Chapter 7. In a Chapter 7 Bankruptcy you keep your "exempt property" and your nonexempt property is liquidated (sold) with the proceeds going to pay your debts. The catch is MOST PEOPLE DO NOT HAVE "NONEXEMPT PROPERTY". Therefore, none of your property is taken-you KEEP ALL YOUR PROPERTY !!! What allows you to keep you property are your "exemptions". The amount of property you can exempt and keep is actually higher because of the manner in which exemptions are applied. If you do find yourself in a position of having excess equity there is always Chapter 13. In Chapter 13 you can have excess equity and not lose your property.
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Disclaimer and Limitation of Use : The information on these pages is not intended as legal advice but rather general information. Reading or using the information on this website does not establish an Attorney-Client relationship. Such a relationship can only be created with the express written consent of an Attorney and the Client. The Bankruptcy Statute and Court Rules are complex. The answers to frequently asked questions at this site are only intended to provide a general information concerning the bankruptcy statute and rules. Individuals should always consult with an experienced bankruptcy Lawyer before making any decision or taking any action. We are proud to be a debt relief agency. We help people file for bankruptcy under the Bankruptcy Code. I offer a free initial consultation by appointment only. I am licensed to practice in both Pennsylvania and New Jersey.