If your home is in foreclosure, you can stop the process by filing bankruptcy. Once you file bankruptcy, the automatic stay stops lenders and creditors from taking any actions to collect (and this includes foreclosure proceedings). If you are filing Chapter 13 bankruptcy, you will have the opportunity to catch up on your mortgage payments and stay in your home. Chapter 7 bankruptcy benefits filers by wiping out the entire mortgage debt (as long as you file before the foreclosure process is complete). By filing Chapter 7, the homeowner isn’t stuck owing the difference between the auction price the bank was able to get during foreclosure and the balance on their mortgage (the deficiency). This is excellent news because without a bankruptcy even if the lender forgives the deficiency once the foreclosure is complete, the homeowner is likely to owe taxes on the forgiven deficiency since it will be considered income. Filing bankruptcy avoids this bad tax result in a Chapter 7, and may save the house in a Chapter 13.

The automatic stay of bankruptcy also puts a stop to any efforts your lender may take to repossess your car. When filing Chapter 13, you have the opportunity to catch up by including past due payments in the plan. Both Chapter 7 and Chapter 13 bankruptcy offer the possibility of getting your car back if it was repossessed recently. Discuss your options more thoroughly with a local Board Certified bankruptcy law specialist.

If your landlord is evicting you, a bankruptcy filing will most likely stop the eviction. (But not for very long). However, if your landlord already got a judgment for possession (or, in other words, an eviction order from the court), bankruptcy cannot force your landlord to allow you to stay.

If you are being sued for breach of contract, medical debt, credit card debt, car accident damages, etc. filing bankruptcy stops the lawsuit. While bankruptcy will not stop all lawsuits such as setting your child support, it is essential to look into the possibility as it simply does not make sense to pay to defend against a lawsuit based on a debt that bankruptcy could discharge.

If you are about to start a higher paying job or you are expecting to inherit a property soon, you should talk to a bankruptcy attorney as quickly as possible. Your changing circumstances may change how the court will assess your ability to repay, and whether you are taking advantage of your creditors. Qualifying for Chapter 7 bankruptcy means satisfying the presumptions arising from the means test. The filer’s income is essential in determining whether or not they pass the test, enabling them to access the protections of Chapter 7 bankruptcy. With an income increase, the means test average income increases every month you wait to file. Filing bankruptcy sooner will increase your chances of having access to the benefits of Chapter 7 bankruptcy. Although even if you do pass the means test, the bankruptcy trustee will consider whether or not your income is higher than what you need to cover your monthly expenses. If it is, the trustee will likely recommend you turn to Chapter 13 bankruptcy instead. This analysis is done in our office before your case is filed. Means test challenges should never be a surprise to you.

If you are in an impossible financial situation and you aren’t sure where to turn, don’t give up. Turn to the experienced Tennessee and Georgia bankruptcy attorneys at Kenneth C. Rannick P.C. We help good people through bad times every day, and we can help you, too.

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