How Does a Lawyer Help People Get Relief from Financial Debt?

Home / Blog / How Does a Lawyer Help People Get Relief from Financial Debt?

Estate Planning Lawyer

No one likes to think about losing their home, car, or possessions to harassing creditors. When you’re facing serious debt problems, these thoughts could be at the forefront of your mind. You might be thinking about bankruptcy, but feel concerned about repercussions with regards to your credit and assets. A bankruptcy lawyer can help you explore your options.

Filing for Chapter 7 Bankruptcy

Many states have laws that mandate individuals to pass a means test in order to file for Chapter 7 bankruptcy. If your monthly income is less than the state’s median income, you will likely automatically qualify. It is not uncommon to be told that you don’t qualify even though you actually do. Sometimes it takes a little readjusting of your financial assessment to prove that after your mandatory expenses, you have little to no extra income. Our lawyers have assisted many people in this process and are ready to help you too.

Filing for Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a special debt repayment plan. It is easier to qualify for and requires you to create a plan with your lawyer regarding your debts and how you will pay them over a 3-5 year period. After this time, any remaining debt is forgiven. Chapter 13 protects your assets and is favorable by people who do not want to lose their house, car, and other valuables.

Individual vs. Joint Bankruptcy

If you are married, and have significant amount of debt, a lawyer may advise you to file for joint bankruptcy. This lets you resolve each spouse’s debt problem at the same time. Joint bankruptcy does have downsides which is why you should consult a lawyer first.

Foreclosing on a Home and Repossessions

When you filing for Chapter 7 or 13 bankruptcy, and foreclosure action by your lender is immediately stopped. If however, you owe several months of house payments, a lawyer might recommend that you file for Ch. 13. Under this type of bankruptcy, you may be granted between 3 and 5 years to bring your payments up to date.

Filing for bankruptcy will also immediately stop the repossession process of your assets such as a car. If you wish to keep the asset, you may be asked to sign a reaffirmation agreement which obligates you to catch up on your payments.

Tax Debts  and Home Liens

Taxes can amount to a serious financial burden. When you file for Chapter 13, you may be able to discharge more debts than you would be able to with Chapter 7. Owing back taxes might have also caused the IRS to put a lien on your home. By filing for bankruptcy, a lawyer might be able to have the lien removed.

Relief of Credit Card Debt

Creditors commonly tell debtors that credit card debt cannot be discharged. However, this is not true. If you have large amounts of credit card debt, bankruptcy might provide you with relief.

Wage Garnishments and Lawsuits

In certain situations, creditors will file a lawsuit against you to recover the money owed to them. As a result, your employer might legally be required to garnish your wages. If you file for bankruptcy, a lawyer might stop this from happening.

Talk with a Respected Bankruptcy Lawyer

There is an excessive amount of false information about bankruptcy and the laws. By sitting down with a bankruptcy lawyer Bloomington, IL trusts, you can explain your unique situation and find out what options are available.



Thank you to our friends and contributors at Pioletti & Pioletti for their insight into bankruptcy and debt relief.