Today I spoke to the Philadelphia area Plymouth Meeting Chapter of BNI on the topic of Bankruptcy, chapters 7 and 13 what is this all about. 40 people were in attendance and as a bankruptcy practitioner I am always interested in hearing from people and the questions they have concerning bankruptcy in general and its process.
Questions ranged from what does a bankruptcy do, how is a person affected by a filing, when can a filing occur, what property do they lose, how long does it stay on a credit report and how does it affect a credit score? What is the process? How long does a bankruptcy take? When should a bankruptcy be considered? And of course, the most interesting, How does the lawyer get paid?
Under the Fair Debt Collection Practices Act, a bankruptcy can stay on your credit report for up to 10 years; the discussion does not end there however; the real question of concern is how quickly will my credit be repaired. The answer to that question is that soon after your filing your score will begin to rehabilitate/increase. Assuming you stay current on your regular bills after filing, you may well be able to purchase a home or remortgage as early as 2 years later. People are very surprised to learn of this.
To answer the question “What happens when I file?” the answer is “You receive immediate and complete protection from all creditor collection action”. As I like to say, the only thing more powerful than the US Bankruptcy law is the US Military. Whether you file a chapter 7 or 13, sheriff sales are stopped immediately, garnishments are halted, law suits and telephone call collections stop; mortgage companies must stop foreclosing on your home. A bankruptcy filing even stops the IRS in its tracks. You no longer will be paying creditors that you don’t want to pay; with a chapter 13, you can force a repayment plan upon your mortgage company. There is much more to dealing with your bankruptcy creditors than written in this paragraph but what I have said here is a good start and you will want to learn more.
Not only should a bankruptcy be considered when you are at the end of your rope but also when you see trouble on the horizon. If the sheriff has come to your door with paperwork; if the telephone calls and letters and past due bills are mounting, that is a good time to come in to discover your options.
That is it for now. I will write about more of the questions I posed in the opening paragraph in future blogs. If you have a question you would like answered in the blog, please email me at Schroeder@jrlaw.org. If you would like a consultation to discuss your particular situation, whether it is bankruptcy or debt negotiation, call and schedule an appointment 215-822-2728.