Tag Archives: Can I keep my house? Can I keep my car?

Joseph Wrobel Chicago Bankruptcy Podcast: August 2019

Podcast: Listen to the August 2019 Bankruptcy Q&A With Chicago Bankruptcy Attorney Joseph Wrobel

For educational and entertainment purposes Chicago Bankruptcy Attorney Joseph Wrobel answers real people’s questions in this question and answer podcast about bankruptcy and consumer finance issues and problems. Joseph Wrobel wants everyone to be financially successful. At times a Chapter 7 Bankruptcy (full discharge) or a Chapter 13 Bankruptcy (3-5 year repayment) is the solution to your financial woes. There are other times you may not need to file for bankruptcy. Joseph Wrobel is here to help you figure out the best way out of your financial problems.

When you have a fresh financial start and don’t owe so much of your paychecks to creditors you are in a good position to save money and rebuild your credit. People are amazed by how easy it can be to have great credit again after they have financial troubles. We help you with everything.

Too often people are scared to use the bankruptcy laws to help them. There are all kinds of myths about bankruptcy and you should know the truth.

Read our blog article on our Chicago Bankruptcy Blogger page, Myths About Bankruptcy in Illinois: Debunked by Joseph Wrobel.

Myths About Bankruptcy in Illinois
Helping people get out of debt with dignity and respect for over 40 years.

Listen to this podcast as Chicago Bankruptcy Attorney Joseph Wrobel answers real questions about bankruptcy from real people all over the country. Below are summaries of the questions and answers. Note that this is not legal advice, these are general answers based on the information provided. Actual legal advice must take place in the office of an attorney you hire for legal advice. If you need legal advice, please call Joseph Wrobel, Ltd. in Chicago at (312) 781-0996. We have offices all over the Chicagoland area and suburbs so it is easy to come to see us and get answers to your questions.

Vehicle Title Issues

Question: How can I get the title to a vehicle from the bank a year and a half after I filed for bankruptcy? The bank did not want the vehicle back.

Joseph Wrobel: If the car has value and you want to sell it you will not be able to sell it without the title. You could also keep the car and junk it when you are done driving it when you no longer want it or it no longer runs. In the podcast, Mr. Wrobel explains in more detail what documentation might be required by a salvage yard.

Question: Can the lender tack the debt owed on one vehicle to the other we have on the same account with the bank? We declared bankruptcy more than a year ago. With our credit union, we had payments and loans for both vehicles. We were thinking of relinquishing one of the vehicles to the credit union. If we do that can the credit union add that balance to the other loan for the vehicle we want to keep?

Joseph Wrobel: The credit union may have special provisions that say that the collateral for one loan also applies as collateral to the other loan.

Property Lien Issues

Question: Can the bank put a lien on my current property if they foreclose on my rental property? I bought my home in 2007. Then I bought another house and rented out my first house. My renters damaged and abandoned my rent house. Should I just let the bank foreclose on it and get out of the mortgage for the rent house? If they do foreclose on the rent house can they put a lien on my newer house where I am living? If I have to do anything, I have $30,000 in savings.

Joseph Wrobel: There is a Chapter 7 exemption that may apply if you qualify. If you file for Chapter 13, you might surrender other property and get into a plan to repay your debts. This would help you avoid a deficiency judgment and tax on the loss of the lender. Listen to the podcast for more detail from Chicago Bankruptcy Attorney Joseph Wrobel.

Out of State Collection Activity Issues

Question: Can an out of state collector sue me in a state in which they do not operate? I live in NJ and am being harassed by a debt collector from OH.

Joseph Wrobel: Yes, but they cannot sue you out of state in OH unless that is where you were when you signed for the debt. Meanwhile, nothing prevents them from suing you where you live in NJ. They will likely hire contracted attorneys in your state to sue you and attempt to collect a money judgment.

Financial issues cause stress. Read this article: 5 Strategies to Deal With Financial Stress.

Concerned Wife and Spouse Issues

Question: Can my wife stop a foreclosure? My wife is not on the deed for the house even though we have been married for 10 years and file joint tax returns together. I have a mortgage foreclosure sale coming up in three weeks. Can my wife file a Chapter 13 Bankruptcy or a Chapter 7 Bankruptcy to stop the foreclosure sale? I have filed for bankruptcy twice already in the past.

Joseph Wrobel: If your wife is not named on the mortgage, any bankruptcy case she files will not affect anyone else’s property, including yours, even though you are married to her and file joint taxes. While she does not need to be on the title (on the deed) to affect the mortgage, she does need to be named on the mortgage loan agreement.

Insurance Coverage Issues

Question: Is the pending cancellation of my car insurance policy stopped by my filing bankruptcy to get the advantage of the automatic stay provision?

Joseph Wrobel: No, the automatic stay stops collection procedures but does not prevent an insurance company from canceling your insurance.

New Loan and Lender Issues

Question: Can I get a new loan if I am making payments to my lawyer to file my Chapter 7 Bankruptcy?

Joseph Wrobel: If you are making payments on attorneys fees to your lawyer and your bankruptcy will not be filed until you pay your attorney in full, then there is nothing to stop you from getting a new loan. However, if you incur new debt just before you file the bankruptcy, it is a bad idea. The trustee may not allow you to discharge the new debt, especially since you knew you were going to file for bankruptcy and had been making pre-payments to your attorney.

Read our article on our Chicago Bankruptcy Blogger page, Bankruptcy Court: Go Ahead and Make Their Day (The last thing you want to do is lie to the bankruptcy court.)

Chapter 13 Bankruptcy Repayment Issues

Question: I understand I can file for Chapter 13 Bankruptcy and get a five-year repayment plan. But what happens if I lose my job and cannot make the payments?

Joseph Wrobel: You may want to convert a Chapter 13 Bankruptcy to a Chapter 7 Bankruptcy and discharge their remaining debt. Whether this is your best option depends upon why you filed a Chapter 13 and not a Chapter 7. Did you have a prior Chapter 7 filing? Did you have too much equity in an asset?

Call Joseph Wrobel in Chicago to learn more about how and when to file a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy. Our main number in Chicago is (312) 781-0996.

Foreclosure Summons Detail Issues

Question: What happens if the name listed in the foreclosure summons is not my name because it is misspelled? My last name is spelled wrong. Are these grounds for dismissing their foreclosure case? What can I do?

Joseph Wrobel: This is what is known as a “di minimis error” and is easily correctable if you were to challenge the validity of the summons.

Avoiding Foreclosure Sale Issues

Question: Can I stop a foreclosure auction by filing a Chapter 13 Bankruptcy only three days before the sale?

Joseph Wrobel: Yes, absolutely you can stop the foreclosure auction and save your house by filing for Chapter 13. You MUST have the petition filed with the Court before the auction sale. If you were to wait until after the foreclosure auction sale, you will not be able to save your home if that is your goal for filing a Chapter 13 Bankruptcy petition.

Bankruptcy and Credit Report Issues

Question: If I filed a Chapter 13 Bankruptcy and it was immediately dismissed, can I get that removed from my credit report? I filed Chapter 13 to protect my home from being foreclosed when I was behind on my mortgage. Luckily I was able to work out a payment plan with the lender mortgage company and no longer needed the Chapter 13. I cannot increase my credit score at the moment because of the bankruptcy filing showing up on my report.

Joseph Wrobel: Your credit report is a history of your credit. You cannot change it and you cannot remove the bankruptcy filing information, that will be present for 7 years.

Bankruptcy Case Time Issues

Question: How long does the Chapter 7 Bankruptcy process take from start to finish?

Joseph Wrobel: About 4 months.

Do I Need Bankruptcy Issues

Question:  My son is 27 and has about $25,000 in medical and credit card debt. How can we figure out whether a Chapter 7 Bankruptcy is a good option for him? My son lives with us and he owns no property.

Joseph Wrobel:  Maybe a Chapter 7 Bankruptcy is a good idea. Assuming your son has no other assets, and he can pass the income test for Chapter 7, this might help him out depending on his financial situation. Other options might be repaying enough of the loans in enough time to avoid bankruptcy. When creditors are facing getting zero dollars because the debt was discharged, they might be more likely to make a deal for less than the amount owed or a payment plan over time that makes the debt payments more manageable while your son works to earn more money and get ahead financially.

You might also like this article: Why You Should Never Cosign for Your Kids

What Are the Financial Questions that Keep You Up at Night?

Don’t Waste More Time in Anxiety: Call Joseph Wrobel, Ltd. (312) 781-0996

Joseph Wrobel and his staff at Joseph Wrobel, Ltd. are ready to help answer your questions about financial problems and solutions. If bankruptcy is a good option for you, they will help you figure that out. Don’t waste another day being harassed by creditors. Use your right to the automatic stay: it stops bill collectors in their tracks.

We hope you find this information helpful. We host and share these podcast interviews and summaries about questions and answers about bankruptcy every month. You can also find more information by searching our website. Thank you for reading and sharing our podcast interview summary!

Want to listen to more of our Chicago Bankruptcy Question and Answer Podcasts? Find this episode, August 2019 Chicago Bankruptcy Question and Answer Podcast with Joseph Wrobel, and all our episodes on the Chicago Bankruptcy Update channel on the Blog Talk Radio network.

Myths About Bankruptcy in Illinois: Debunked by Joseph Wrobel

Chicago Bankruptcy Lawyer Joseph Wrobel Debunks Myths About Bankruptcy in Illinois

There are all kinds of myths about bankruptcy and the truth about bankruptcy gets more appealing when people learn how a bankruptcy case actually works. You can ask for a Chapter 7 full discharge or a Chapter 13 partial discharge and repayment plan. If you need to keep your home and car, we have options for you. When searching online for information about how bankruptcy in Illinois works, it is important to get your information from an experienced Chicago bankruptcy lawyer who can dispel myths about bankruptcy in Illinois.

Myths About Bankruptcy in Illinois
Helping people get out of debt with dignity and respect for over 40 years – (312) 781-0996

Myths About Chapter 7 Bankruptcy in Illinois

People worry about losing their property in bankruptcy in Illinois. Do not worry, because most of your important property asset exemptions. The Illinois Homestead Exemption allows you to keep up to $15,000 in equity in your home. The Illinois Motor Vehicle Exemption up to $2,400 in one motor vehicle is also allowed. You can also keep personal property up to $4,000. There are also exemptions for a list of additional categories.

Read our blog article, Bankruptcy Exemptions in Illinois to learn more about keeping your property in bankruptcies.

Myths About Chapter 13 Bankruptcy in Illinois

Despite myths, you can keep your house and save your mortgage with Chapter 13 bankruptcy. In a Chapter 13 you will repay a portion of your debts over a three to a five-year repayment plan. People might also think they do not qualify for a Chapter 13 bankruptcy because they make too much money. When people are looking for a Chapter 7 bankruptcy but they make too much money, they can file a Chapter 13 and enjoy its many benefits.

You can dismiss your bankruptcy at any time if your financial situations change, even if you are still in your Chapter 13 plan. You can also sell your home while in Chapter 13.

We answer all the myths about bankruptcy in Illinois in our article, What Everybody Should Know About Chapter 13 Bankruptcy.

Credit Rebuilding Myths Debunked

Bankruptcy will affect your credit score but it is not forever. Actually, Chapter 7 is on your credit report for 10 years and seven years for a Chapter 13. Meanwhile, despite what some think, your credit score can be repaired. After your bankruptcy discharge, you can get a secured credit card and start rebuilding your credit. The more you use credit responsibly, the quicker your score will rise.

People worry traditional credit card companies will never give you credit. Actually, as you rebuild your credit and you have fewer creditors after you, you are a better credit risk. A credit union knowing you had a bankruptcy, can make car loans based on your credit score and your current financial position.

Many people who had a bankruptcy get approved for mortgages within a few years of their bankruptcy. The Non-Prime Lenders website offers information about mortgage after bankruptcy.

Read our article, Good Credit After Bankruptcy

Housing and Apartment Rent Myths

People are worried about renting or buying an apartment or house after bankruptcy in Illinois. Do not worry about being out on the street. You can certainly rent a home or apartment after a bankruptcy, even if your credit score is not where you want it. Many larger rental companies frequently work with people in a bankruptcy or who recently completed a Chapter 7 or a Chapter 13 case. Sure, some smaller rental companies and individual owners with properties could deny you. But most will charge you a larger security deposit or ask for a co-signer. It is very rare to hear a case of someone not being able to rent a place to live during or after bankruptcy.

Some say you will never qualify for a mortgage after bankruptcy, and they are wrong. When you have more money to pay your bills, it can be easier to rebuild a good credit score for a mortgage in a few years. When you no longer have debts you are unable to pay, you are a better credit risk. If you are renting, you can improve your chances to get a better mortgage and lenders have options for buyers who had a bankruptcy.

The Myths About Employment and Bankruptcy

No, your employer cannot fire you because you filed for bankruptcy. Nor can an employer change anything about your employment because of a bankruptcy.

Public, government agencies may not use bankruptcy in the hiring process. Private employers are not likely to make hiring decisions based on whether someone had a bankruptcy. Private companies may ask to check your credit. While there may be certain special employment positions where bankruptcy could be a problem, for most people this is not a problem.

One of the common reasons people do file for Chapter 7 or Chapter 13 bankruptcy is to avoid pending wage garnishment. Through the process of taking advantage of the bankruptcy laws to stop a wage garnishment, the employer receives a notice of the bankruptcy.

Check out this ForRent.com article, Can You Rent an Apartment after Filing Bankruptcy?

Call Joseph Wrobel, Ltd. at (312) 781-0996 to Learn Answers to Myths About Bankruptcy in Illinois

Whatever your questions or concerns are about bankruptcy, call Joseph Wrobel. Ltd., the Chicago Bankruptcy Law Firm. Joseph Wrobel has been practicing consumer bankruptcy law for many years and has seen and heard just about everything. How do I start?

Every question you have is a good question. Call us to learn answers to myths about bankruptcy in Illinois by dialing (312) 781-0996.

Bankruptcy for Unpaid Workers

Bankruptcy for Unpaid Workers in Chicago Who Run Out of Money

The current government shutdown causes people to ask themselves what would happen if they did not receive their paycheck for several weeks or longer. For families living on budgets, not receiving pay means the bills are not going to be paid. Unpaid workers without savings to temporary replace regular income can lose their homes, cars and credit cards if payments are delinquent.

Even though currently unpaid government workers are promised to receive their back pay after the shutdown, they may not be paying their mortgage, rent, car payment, student loans, utilities and other financial obligations. How long would you be able to continue without pay and the immediate need to get another source of income.

In many cases the unpaid workers with specialized work skills and experience cannot find another job very easily, and not at the same pay grade.

Read an article by CNBC focused on 800,000 workers without pay and the impact of the shutdown: “Workers going unpaid during the shutdown owe $438 million in rent and mortgage payments this month.”

Examples of Situations Causing Unpaid Workers Who Consider Bankruptcy

Workers are unpaid for a variety of reasons. Layoffs happen in manufacturing due to slow business or problems. Companies with a cash flow problem may not be able to pay their workers on time. Sometimes a struggling company does not have enough money in the bank for all the payroll checks to clear. In other cases, the employers accounts could be seized or frozen. For people working as contractors for others, one party may refuse to pay because they have an issue with the work not being performed correctly. In each of these scenarios, the unpaid employee still needs to pay their bills.

Unless workers have several months of bill paying money set aside for cash flow emergencies, they may be considering their bankruptcy options. Chapter 7 and Chapter 13 bankruptcies have features and options that will help people and their families.

The Automatic Stay Provision of the Bankruptcy Code Stops Creditors from Contacting You

Creditors and bill collectors are aggressive and persistent. Economic conditions like a government shutdown mean that many workers will not get their paychecks. After the bills come due and are not paid, collectors have options. Some waive late fees and extend due dates. Temporary relief runs out at some point. Aggressive bill collectors want you to pay them before you pay someone else. They will call you and send extra past due notices in the mail. When friends or relatives listed as references on loans getting phone calls about you not paying your bill it can be embarrassing and aggravating.

The “Automatic Stay” stops bill collectors in their tracks. When either a Chapter 7 or Chapter 13 bankruptcy case is filed, including a list of all the creditors the filer may owe, those creditors receive notice that they may not continue any collection activity so long as the bankruptcy case is ongoing.

Save your home from foreclosure and sale by filing for bankruptcy, taking advantage of the automatic stay. The bankruptcy postpones foreclosures and sales.

Our Bankruptcy Blogger article explains the automatic stay in further detail: The Automatic Stay: It Stops Bill Collectors in Their Tracks. Call Joseph Wrobel, Ltd. today to get more information (312) 781-0996.

Chapter 7 Bankruptcy for Unpaid Workers

For some unpaid workers a Chapter 7 bankruptcy case might have already been on their mind. When people have debt, they cannot afford to pay, when they are making less income than before, and when the outlook for paying off all the debt is bleak, a fresh start with a Chapter 7 bankruptcy can make a major difference for a family struggling with money and bills.

The point someone who already has financial troubles doesn’t receive their paycheck, a Chapter 7 bankruptcy will help. Eliminate the credit card debt, the payments for a car worth less than owed. Eliminate the mortgage on the house that is too big and expensive.

When people start over after a Chapter 7 bankruptcy, they can control their budgets and not get behind in debt. And when people no longer owe money to so many creditors, they become a better credit risk. Rebuilding credit after a bankruptcy takes some time but is easier than people think.

Learn more about rebuilding credit. Read our article, Good Credit After Bankruptcy on the Bankruptcy Blogger section of the Joseph Wrobel, Ltd website. See also results for searching our site for the word “credit.”

Chapter 13 Bankruptcy for Unpaid Workers

Chapter 13 bankruptcy may be attractive to unpaid workers who expect to receive their back pay but who need temporary protection from collections and foreclosures. When you file for a Chapter 13 bankruptcy you can “cure” your mortgage default by making up past payments over months.

A Chapter 13 “reorganization” bankruptcy can last three to five years, giving the unpaid employee time to catch up on debts when the paychecks stopped coming for whatever reason.

One misconception about Chapter 13 is that every dollar owed must be repaid. In fact, depending on a person’s financial calculations, they may only have to repay a percentage of the amount owed.

To save your home, car and other assets you don’t want liquidated, call Joseph Wrobel, Ltd. and learn where you stand and for which type of bankruptcy you qualify. Call day or night (312) 781-0996.

Read Homeowners Keep Their Home Using Chapter 7 or Chapter 13 Bankruptcy Laws.

Joseph Wrobel Can Help if Bankruptcy Makes Sense and Will Help Unpaid Workers Get a Fresh Start

When you call Chicago bankruptcy lawyer Joseph Wrobel and make an appointment at one of the conveniently located offices around the Chicago area you are taking the next step in finding out if bankruptcy is the right thing to save you from money problems.

At your meeting with Joseph Wrobel when your financial information is processed, he will tell you about your options under the bankruptcy law. If you or a friend is an unpaid employee because of a shutdown, lack of business, layoff or any reason, contact online or call Joseph Wrobel, Ltd. today and get the information about bankruptcy for unpaid workers, to turn off the bill collectors and turn on your fresh financial start. The main Chicago office telephone number is (312) 781-0996.

Choosing an affordable college

Choosing an affordable college and creating an employable foundation is a key to success. In 2017 there is one thing that seems certain and that is change. The rise and fall of professions and the volume of applicants for certain jobs can put a college graduate in a rough spot. Especially if you have a specialized education in a competitive and sometimes saturated market, it can be difficult to compete with others who have even more education and connections. The concept of earning a degree and being due a job in your field is yielding the right of way to making smarter and arguably safer choices and choosing an affordable college.

Bankruptcy Attorney Joseph Wrobel earning a degree and being due a job in your field is yielding the right of way to making smarter and arguably safer choices with your time and money.
Bankruptcy Attorney Joseph Wrobel

Will the career you are going to school for exist in 20 years when you are still paying off student loans?

Consider careers in nursing versus computer programming. While the programmer may be easier to train in new IT careers, the specialized degrees may not be as valuable in the future, especially when you consider technology and how quickly things change. For tech lovers choosing an affordable college, there are many local community college programs offering certificate programs in the foundation skills a tech industry worker needs to be able to continue learning and training on new technology as it develops.

Nursing, however, will always be necessary. For anyone committed to a nursing career, the time and money spent on a reputable college nursing degree may be worth your resources. That said, what if you decide down the road that nursing is too stressful, and you want to make a career change. Ask yourself what your base education is worth in other careers and industries and will you need to go back to school for more education and training?

Do you need to work full time, or can you take more time to pursue your education while keeping food on the table? Choosing an affordable college sounds like a smart idea. 

When some people go to school full time they take on extra student loans to pay for housing and living expenses because they are not working during college. While some students are living on their parent’s support and have the luxury of not working and not taking additional student loans, they not be better off if they do not maintain a job and work ethic while in school. For many students, the flexibility of part-time and online course alternatives makes it easier to work and go to school. It may take longer to finish your education, but you can help pay towards your tuition while you are going and will have significantly less student loan debt when you graduate.

Know what you are getting into when you take financial aid and student loans to avoid buyer’s remorse.

Have you ever read the fine print when buying a car? You may nod your head and just sign on the dotted line. When you do this with student loan financial aid packages you might be putting yourself in the path of a bad deal and significant consequences if for some reason you are unable to make your regularly scheduled loan payments.

We recommend reading this CNBC article, How to pick a college that won’t leave you with a mountain of student loan debt to read some of the alarming facts and figures that might prompt you to play closer attention to what may seem like free money at the time.

At Joseph Wrobel, Ltd., we want everyone to take control of their financial future and success by sharing smart financial information and helping people working to reach their financial goals.

About us: Joseph Wrobel, Ltd., works with clients to find out if they qualify for Chapter 7 or 13 bankruptcy, and their options and rights under the law. The firm will also advise and assist clients with questions and concerns about the collectors and their rights to pursue you.

Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. (312) 781-0996.

Don’t forget to keep up with us on Facebook, Twitter, LinkedIn and Avvo, where you can read client and peer reviews!

Chicago Bankruptcy Q&A Podcast with Joseph Wrobel: November 2017

Chicago bankruptcy and consumer credit attorney Joseph Wrobel shares news and updates in bankruptcy law as well as business and consumer financial matters. It has been documented that financial troubles can cause all sorts of ailments, the most common of which is sleeplessness. Joseph Wrobel helps clients alleviate their anxiety created by the inability to pay bills and the embarrassment of financial distress.

Chicago bankruptcy
Helping people get out of debt with dignity and respect for over 40 years.

Sample questions answered in this 30-minute show: Use this link to listen anytime.

  • What happens when a corporation I sued filed for Chapter 7 bankruptcy?
  • Do I have to include my paid for automobile in my Chapter 7 bankruptcy?
  • What happens when my car loan co-signor files for bankruptcy?
  • What happens if a bankruptcy lawyer does not file my bankruptcy petition?
  • I missed my date to file a bankruptcy claim, what happens to my rights?
  • In bankruptcy can I pay for the value of my car instead of what I actually owe?
  • How will my ex-husband’s bankruptcy affect my home if he’s on the mortgage?
  • Can a family member loan me money for a down payment if I am in Chapter 13?

Joseph Wrobel has been a practicing attorney since 1973 and has experience in a wide variety of law relating to legal matters for individuals and families. Wrobel helps clients get out of debt and get a fresh start. He is an active member in several bar associations and the Bankruptcy Panel of Pro Bono Program of the Chicago Volunteer Legal Services. After serving the U.S. Army Reserve 363rd Civil Affairs Unit, Wrobel earned a B.A. in Psychology from Northwestern University and in 1973, he earned a JD from DePaul University Law School.

Don’t forget to keep up with us on Facebook, Twitter, LinkedIn and Avvo, where you can read client and peer reviews!

Visit our Chicago Bankruptcy website online for more about the firm or call for more information at (312) 781-0996 or e-mail at JosephWrobel@ChicagoBankruptcy.com.

Filing bankruptcy: Eliminating medical bills

 

There are several options for filing bankruptcy and eliminating medical bills. When bad things happen to good people the financial consequences can be suffocating. Especially when it is not your fault, you should not have to be stuck with unpayable debt and non-stop collector harassment. Medical debt collectors may sue you and garnish your wages, creating additional anxiety and burden to anyone already struggling with money.

eliminating medical bills
Helping people get out of debt with dignity and respect for over 40 years.

You can make the phone calls and lawsuits stop when you file a petition for Chapter 7 or Chapter 13 bankruptcy. After your bankruptcy, there are great options to boost your credit and put yourself in the best place to make and keep more money and enjoy financial freedom.

How medical debt collectors seek money judgements and wage garnishments

Mary, a single mother of three was severely injured in a car crash that was not her fault. The other driver did not have insurance and had no assets. Mary was stuck paying for hospital and medical bills for her emergency care, surgery and rehabilitative care that over many months. Mary could have paid cash for a new home for money she owed in medical bills. The medical bill collectors hired a lawsuit and served Mary with a lawsuit and she was facing a potential wage garnishment. Luckily Mary’s employer kept her job for her when she was able to get back to work but Mary wanted to keep her pride and avoid the embarrassment of having her wages garnished and losing that much more out of her paycheck.

How bankruptcy stops medical debt collectors in their tracks with the Automatic Stay provision

One day, Mary accepted the reality that the accident and medical bills were not her fault. The freedom from harassment by collectors sounded like music to her ears. Having the lawsuit go away meant Mary would be able to sleep at night. When she filed for bankruptcy, Mary had the protection of the automatic stay provision in bankruptcy, which orders that all collection activity must stop during the bankruptcy.

Read our article for more: Examples of the Automatic Stay and how it operates in bankruptcy law.

Qualifying for Chapter 7 discharge or Chapter 13 bankruptcy reorganization

Mary had no idea there were options and more than one type of bankruptcy. She learned that Chapter 7 was the traditional bankruptcy she was looking for. Because she did not have too many assets or too high an income, she was able to qualify for the full discharge of all her debts allowed by the bankruptcy code. She also learned how she could have entered a Chapter 13 repayment plan and pay back a smaller portion of her medical bills over several years, which could have also helped her get back on track and stop the harassment and collection efforts.

Read our article for more: How is Chapter 7 different from Chapter 13 bankruptcy?

About us: Joseph Wrobel, Ltd., works with clients to find out if they qualify for Chapter 7 or 13 bankruptcy, and their options and rights under the law. The firm will also advise and assist clients with questions and concerns about the collectors and their rights to pursue you.

Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start.

Don’t forget to keep up with us on Facebook, Twitter, LinkedIn and Avvo, where you can read client and peer reviews!