YOUR RIGHTS IN BANKRUPTCY: The Right not to be harassed; the Right to a Fresh Start, leaving the past behind; the Right to stop late charges and high interest on Credit Cards; the Right to keep secured property if you can pay for it (home, car, appliances)
If you have been to court on your bills, or faced collection efforts, you know the law seems one-sided in favor of the people you owe, called creditors. The refreshing change when you get into Bankruptcy Court is that the scale is more balanced, and in fact gives you some advantages. Most people like best the fact that all collection efforts STOP, as soon as the Bankruptcy is filed. You do have to follow the rules, which we help with, and sometimes if your income is too far down, you may lose things you can't afford. But the bottom line is this system of laws called Bankruptcy can give you a chance to start your financial future over again.
BANKRUPTCY is a business decision for you, much in the same way as Chrysler (2 times), General Motors (1), and lots of big businessmen have done. It is a doorway out of the stress of trying to make too little money go too far.
BANKRUPTCY is your weapon to take back your financial future. While most your debts were created under State Law, Bankruptcy is a Federal Law, and so it controls over all those State rules. If you follow the procedures and rules in Bankruptcy, you can take back control of your money and not have to worry about those past debts. This applies to most debts, but TAXES and STUDENT LOANS, as well as a few others will require special treatment.
First, as soon as you file, collection efforts must stop. Once your case is filed, there is an automatic court order (called a STAY) stopping all harassment and collection efforts, even GARNISHMENT. This means creditors cannot even call you, and you don’t have to deal with them in any way.
SECURED CREDITORS must be paid in any case, because they have a right attached to their security. So, if something is mortgaged, be sure that you keep up payments as well as you can, at least until you get legal advice. In Chapter 13, you may be able to limit payments if the security is worth less than you owe.
G. Paul Marx, A Professional Law Corporation
THE DEAL THE TRUSTEE EXEMPT PROPERTY
MORTGAGES, SECURED CREDITORS TRUSTEE ACTIONS