The average American family owes almost $140,000 to a wide variety of creditors. That figure is more than twice the average annual household income in America. So, many families struggle to pay the bills, at least during some parts of the year. Often, the resulting stress causes Post Traumatic Stress Disorder-type symptoms. When creditors constantly call and threaten adverse action, like foreclosure or wage garnishment, this stress becomes much worse. Thankfully, there is a way out.
The aggressive attorneys at Miranda, Magden & Miranda, LLP offer a wide range of solutions for Central California families who struggle with unpaid debt. We know the law, and we know how to use it to your advantage. So, we stand up for your legal and financial rights throughout your bankruptcy case. All the while, we also give you solid legal advice, so you can make the best possible choices.
Chapter 7 Bankruptcy in Monterey County
Much of the aforementioned household debt is in the form of high-interest credit card obligations. It is extremely frustrating to spend thousands of dollars on such debts every year, yet only see the balances shrink marginally. In their desperation, some families turn to high-interest payday loans, and the downward financial spiral continues.
Until recently, the Fair Debt Collection Practices Act assisted consumers in these situations, but the Supreme Court has basically eliminated these protections. So, bankruptcy may be the only remaining option, especially when collections calls turn to wage garnishment and lawsuits.
Bankruptcy’s Automatic Stay puts a stop to all these things. When consumers file Chapter 7, creditors must immediately cease all adverse actions, including:
- Wage garnishment,
- Repossession, and
- Harassing phone calls.
In most cases, the Automatic Stay remains in effect throughout the proceeding. Moneylenders can only bypass Section 362 of the Bankruptcy Code if the judge grants special permission. This permission is not easy to obtain.
At the same time, the Bankruptcy Code also protects most of the debtor’s property. In most cases, the court cannot seize houses, cars, retirement accounts, and most other assets in order to pay off debts.
Procedurally, about six weeks after debtors file their Chapter 7 petitions, the person in charge of overseeing the bankruptcy (the trustee) reviews the paperwork, asks a few identity-related questions, looks at a few financial documents, and clears up any red flags. Within about two to four months later, all the debtor’s credit cards, medical bills, and other unsecured debts are discharged.
Chapter 13 Bankruptcy in Marina
In Chapter 13, which is also called the wage-earner plan, the trustee’s role is a bit different. Instead of merely reviewing paperwork, the trustee basically places the debtor on an allowance for either three or five years. All the debtor’s disposable income goes to pay off secured debt arrearages. That includes things like past-due mortgage payments and delinquent auto loan installment payments.
Since the Automatic Stay remains in effect for the entire period, moneylenders must normally accept the income-based repayment plan. The Automatic Stay even prohibits them from complaining about it, in most cases.
At the end of the protected repayment period, the judge discharges any remaining unsecured debts. The debtor is also current on all secured obligations. That combination is the very definition of a fresh financial start.
Count on Dedicated Attorneys
The Bankruptcy Code offers multiple options to distressed California debtors. For a confidential consultation with an experienced bankruptcy lawyer near Marina, contact Miranda, Magden & Miranda, LLP. Initial consultations in Bankruptcy are provided free of charge.