Bankruptcy

Should You Consult an Attorney When
You are Having Financial Problems?

Consumers are bombarded by advertisements regarding credit, financial issues and tax problems. Often the advertiser is trying to “sell” the consumer a debt relief program or debt consolidation. Sadly, in our easy credit economy the general public is often unaware of their legal rights as a consumer and they can fall easy prey to companies that make all kinds of promises to lower your payments or debt relief. The vast majority of people that are having financial hardships have had something unexpected happen to them such as loss of a job, divorce or medical issues. The stress that follows such life changing events does not stop creditors who will often exploit any opportunity they can to get your money regardless of what is happening in your life. It is at a time like this that people should get an unbiased legal opinion on what their legal options are regarding debt problems.

There are two options in bankruptcy for individual consumers. Chapter 13 debt consolidation places your debts in up to a five year court approved debt repayment plan. Past due taxes, mortgage arrearage, automobile loans, medical bills, credit cards, personal loans etc… are all included in a Chapter 13 case. Plan payments are calculated based on a broad range of factors that are factored on a case by case basis. An experienced attorney can evaluate the debts and assets and propose a payment plan that is proposed in good faith to the Court for approval. Chapter 13 allows individuals to keep their assets and prevents creditors from any further collection action such as harassing telephone calls, filing a lawsuit, garnishing wages, repossession or foreclosure.

The second option in bankruptcy for individuals is Chapter 7. Chapter 7 allows people to discharge unsecured debt such as credit cards, medical bills, personal loans, cancel a lease contract or in some circumstances past due income taxes. Chapter 7 also allows a debtor to surrender a home, automobile or any financed property and discharge the debt. There is an Income or “Means Test” that must be followed to verify that a person qualifies to file Chapter 7 but a Consumer Advocacy survey has shown that more than eighty (80%) of people qualify for Chapter 7 debt relief. Chapter 7 allows people to get a “Fresh Start” and the opportunity to rebuild their credit.

Any legal action taken by a creditor after a Chapter 13 or Chapter 7 case has been filed has to be allowed by a bankruptcy judge and a creditor can be sanctioned for a violation of the Automatic Stay provision of the U.S. Bankruptcy Code by the judge. This protection of the Court is very important as “debt relief” programs offered by various companies cannot provide this protection. An attorney can guide clients through the process and provide counsel as to the best option for people that are often overwhelmed with debt and financial difficulty.

Eric Heath Johnson
Hill, Gossett, Kemp & Hufford P.C.
7900 Parkway Drive
Leeds, AL 35094
205-833-7656

No Representation is made about the quality of the legal services to be performed or the expertise of the lawyer performing such services.