If you are a homeowner considering filing for bankruptcy, there are two petition options—Chapter 7 and Chapter 13 bankruptcy. Filing a Chapter 7 bankruptcy petition allows you to discharge your debts while creating a reaffirmation agreement with your lender. A Chapter 13 bankruptcy petition, on the other hand, allows you to keep your home by paying off your debt obligation under a supervised repayment plan.
Automatic Stay Order
As soon as you file for bankruptcy, the court will issue an automatic stay order, which ceases any creditor collection activity against you. This means that if you are late in making your mortgage payments, the automatic stay prevents your lender from continuing collection against you, unless your lender receives permission from the bankruptcy court.
There is a misconception that homeowners always lose their home during a bankruptcy case. In reality, the U.S. Bankruptcy Code provides some flexibility in avoiding foreclosure, whether you decide to file for Chapter 7 or Chapter 13 bankruptcy. In order for you to maximize the benefits of declaring bankruptcy, it’s important to choose the correct bankruptcy process for your finances. For example, Chapter 7 is the best option if you have limited financial resources. Chapter 13 is a better option if you are in a more stable financial position, as it allows you to pay off most, if not all, of your debt.
In order to protect your home and assets, you need to understand bankruptcy law as well as procedure. For this reason, it’s best to consult with an experienced bankruptcy attorney instead of trying to handle this complicated legal process alone. Your attorney can help you decide whether a Chapter 7 or a Chapter 13 petition is in your best financial interest.
Since 1990, the bankruptcy attorneys at Cutler & Associates, Ltd. have provided quality representation to people in the Chicago area. By calling us today, we can stop collection calls, UCC 1 filings, and foreclosure proceedings. Call (847) 868-2265 to schedule a meeting at our Aurora or Schaumburg office.
For many people, it’s not a surprise that financing a college education is expensive. However, most people believe that taking out student loans is a worthwhile investment because a college degree opens up doors to higher paying jobs. Unfortunately, in today’s economy, post-college salaries don’t always provide enough to cover cost of living expenses as well as student loan payments.
As this video explains, the Institute for Financial Literacy reports that college graduates are the fastest growing group of people filing for bankruptcy protection. With monthly college loan payments up to $625, some recent college graduates simply can’t afford to pay for basic living expenses like food, rent, and transportation. Unfortunately, student loan debt isn’t dischargeable through a bankruptcy petition.
If you’re faced with financial problems, it’s important to understand what debt is dischargeable through bankruptcy. Call (847) 868-2265 to schedule a consultation with Cutler & Associates, Ltd. of Aurora.
The way you handle money early on in your life can set a spending pattern for many years to come. For example, if you begin relying on credit right after college, you may find yourself continuing to accumulate credit card debt for the rest of your life. For this reason, it’s important to actively build your financial future by creating a budget, improving your credit score, and paying back owed debt.
Know your credit score
The first time you borrow money from a lender that reports to a major credit bureau, you will generate a credit report. Most home loans, student loans, and credit card debt is reported to a major credit bureau, so you may already have a credit report in your name. Any time you wish to take out a future loan, your lender will look at your credit score to determine whether you qualify for the loan and what your interest rate should be. For this reason, it’s incredibly important to check your credit score for any errors.
Use debt sparingly
The biggest rule in borrowing is to never borrow more money than you can repay. If you’ve never owned a credit card, then you should begin by just taking out one card in your name. As you use your credit card, be sure to only charge what you know you can pay back. You may also want to consider building up your credit history by using a secured card, which you pay for in advance.
Repay your debt
Six months after you stop attending school, you need to start repaying your federal student loans. This includes your Stafford and Perkins loans. In order to ensure that you don’t miss any loan payments or benefit options, make sure that your lender knows your new address.
If you are considering filing for bankruptcy, Cutler & Associates, Ltd. can help you understand your options. Our bankruptcy law firm has focused on Chapter 7 and Chapter 13 cases since 1990. You can reach our Aurora or Schaumburg office by calling (847) 849-1834.
I worked with Stuart from Cutler and Associates to help me file for Chapter 7. On my first visit , Stuart made my feel at ease by his calm demeanor, thorough explanation of the entire process, and his honesty. Stuart kept me up to date on all aspects of my case and was quick to reply to my many, many e-mails, texts, and phone calls. . .. His...