Most lenders have little patience when it comes to late payments. For example, mortgage lenders typically begin foreclosure proceedings after just two missed payments. This process begins with an acceleration notice, which means the moneylender stops accepting partial payments. So, every month, the homeowner gets further and further behind, even if the homeowner makes the installment payments.
The experienced attorneys at Miranda, Magden & Miranda, LLP, routinely handle bankruptcy matters throughout Central California. At your initial consultation, we review all the legal procedures and answer all your questions. Then, working with you, we set out on a course of action. Then, we stand up for your legal and financial rights all the way to the end of the case.
Much of your consultation revolves around the two major types of consumer bankruptcy, as outlined below.
Chapter 7 Bankruptcy in Hollister
Many people struggle with credit cards, medical bills, and other types of unsecured debts. These obligations typically involve high-interest rates, extremely fast referrals to debt-buyers, or both. The high interest makes it hard to keep up with debt payments, and collections referrals significantly affect your credit score in a negative way.
Chapter 7 offers a way out. It is also straightforward to qualify for this federal debt relief program. Debtors must simply take a credit counseling class, have an income that is below average for that geographic area, and declare their assets and debts.
After they file their voluntary petitions and financial schedules, the judge discharges most unsecured debts after a brief waiting period. Unsecured debts include, but are not limited to:
- Credit cards,
- Medical bills,
- Payday loans, and
- Some back income taxes,
Some of these debts are only dischargeable under special circumstances. For example, back income taxes must be at least three years old, and the returns must have been on file for at least two years. Additionally, student loans are dischargeable if the debtor has an “undue hardship,” a phrase that has a specific legal meaning.
Chapter 13 Bankruptcy in San Benito County
In both Chapter 7 and Chapter 13 cases, the Automatic Stay usually takes effect as soon as debtors file their paperwork. Section 362 of the Bankruptcy Code prohibits any form of adverse action, even if the underlying debt is nondischargeable. Some common types of creditor adverse action include:
- Wage garnishment,
- Foreclosure, and
- Creditor lawsuits.
In Chapter 13, the Automatic Stay lasts up to five years. The protected repayment period gives debtors plenty of time to catch up on past due mortgage payments, auto loan payments, and other secured debt payments. This repayment plan is income-based. Debtors pay what they can afford to pay when they can afford to pay it.
During the protected repayment period, creditors can only overturn the Automatic Stay if they have special permission from the bankruptcy judge. Unless there is an imminent threat to the collateral (e.g., “I’m going to drive my car off a cliff”), the judge is unlikely to grant permission.
Work with Dedicated Attorneys
Bankruptcy is the best way to combat aggressive creditors who demand instant payment. For a confidential consultation with an experienced bankruptcy lawyer in Hollister, contact Miranda, Magden & Miranda, LLP. We routinely handle matters in San Benito County and nearby jurisdictions. Initial consultations in Bankruptcy are provided free of charge.