I DON’T KNOW WHERE TO TURN. I’M BEHIND ON MY MORTGAGE PAYMENTS, TRUCK PAYMENTS AND I AM BEING SUED BY MIDLAND FUNDING. WHAT CAN I DO?
One of the most important concepts about bankruptcy is that it is enacted under Federal Law, plus it takes a UNIVERSAL approach to deal with your debt.
Steven N. Taieb, Esq. has seen so many clients make the mistake of trying to deal with individual creditors by robbing Peter to pay Paul.
First, this does not solve anything since you will constantly be playing catch up. You cannot continuously try to pay one creditor and ward off another creditor, since the stress will be unbearable. Also, if you try to make deals with all your creditors, there can be serious tax implications since the creditor will send 1099’s. Thus, if you settle with one creditor, you will have a tax obligation to the Internal Revenue Service.
Bankruptcy takes a universal approach since it deals with ALL creditors and there is an automatic stay which stops creditors from pursuing you except in rare situations where a debtor has filed on numerous occasions within the last year. Thus, you don’t have to choose whether to stop a shut off from a utility or repossession by an auto company or a garnishment by a creditor, since the stay stops all creditors, even the Internal Revenue Service.
In a Chapter 7, you are not obligated to pay any of your creditors except if you don’t pay future utility bills you can then be shut off, or if you fail to make a mortgage or auto payment, they can file a Motion to lift the bankruptcy to pursue their State law rights.
However, in a Chapter 13 there is a specific payment plan for each individual’s specific case depending on his or her circumstances. There is no general plan since some plans can include paying a vehicle while others deal with arrears. However, once a bankruptcy is filed the creditor must ask the Court to lift the bankruptcy stay to proceed with its collection activities. The only exception is if you fail to pay future utility bills since the code requires adequate assurance of future payments.
Steven N. Taieb, Esq. is here to help you and is a South Jersey Bankruptcy Attorney who has helped over 7000 people with their financial problems for the past 32 years and is board certified in consumer bankruptcy law by The American Board of Certification which is accredited by The American Bar Association.
We are more than happy to discuss all your options and to see if bankruptcy is the best option for you.