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The online home of the Law Office of Craig B. Lane
What Is
Bankruptcy?
Bankruptcy is a legal proceeding in which a person who can not pay his or her bills can get a fresh financial start. The right to file for bankruptcy is provided by federal law, and all bankruptcy cases are handled in federal court. Filing bankruptcy immediately stops all of your creditors from seeking to collect debts from you, at least until your debts are sorted out according to the law.
What Can Bankruptcy Do for Me?
Bankruptcy may make it possible for you to:
1. Eliminate the legal obligation to pay most or all of your debts. This is called a “discharge” of debts. It is designed to give you a fresh financial start.
2. Stop foreclosure on your house or mobile home and allow you an opportunity to catch up on missed payments.
3. Prevent repossession of a car or other property, or force the creditor to return property even after it has been repossessed.
4. Stop wage garnishment, debt collection harassment, and similar creditor actions to collect a debt.
5. Restore or prevent termination of utility service.
6. Allow you to challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more than you really owe.
What Bankruptcy Can Not Do
Bankruptcy can not, however, cure every financial problem. Nor is it the right step for every individual. In bankruptcy, it is usually not possible to:
1. Eliminate certain rights of “secured” creditors UNLESS you intend to return the property to the creditor. A “secured” creditor has taken a mortgage or other lien on property as collateral for the loan. Common examples are car loans and home mortgages. You can force secured creditors to take payments over time in the bankruptcy process and bankruptcy can eliminate your obligation to pay any additional money if the property is returned to the lender. Nevertheless, you generally can not keep the collateral (property) unless you continue to pay the debt.
2. Discharge types of debts singled out by the bankruptcy law for special treatment, such as child support, alimony, certain other debts related to divorce, most student loans, court restitution orders, criminal fines, and some taxes.
3. Protect cosigners on your debts UNLESS you file a Chapter 13. When a relative or friend has co-signed a loan, both of you owe the debt. If one of you is "taken off" the debt becuase of a bankruptcy filing, the other still owes the debt.
4. Discharge debts that arise AFTER bankruptcy has been filed. Generally speaking, a bankruptcy only deals with debts that were created before the bankruptcy was filed.
Bankruptcy is a legal proceeding in which a person who can not pay his or her bills can get a fresh financial start. The right to file for bankruptcy is provided by federal law, and all bankruptcy cases are handled in federal court. Filing bankruptcy immediately stops all of your creditors from seeking to collect debts from you, at least until your debts are sorted out according to the law.
What Can Bankruptcy Do for Me?
Bankruptcy may make it possible for you to:
1. Eliminate the legal obligation to pay most or all of your debts. This is called a “discharge” of debts. It is designed to give you a fresh financial start.
2. Stop foreclosure on your house or mobile home and allow you an opportunity to catch up on missed payments.
3. Prevent repossession of a car or other property, or force the creditor to return property even after it has been repossessed.
4. Stop wage garnishment, debt collection harassment, and similar creditor actions to collect a debt.
5. Restore or prevent termination of utility service.
6. Allow you to challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more than you really owe.
What Bankruptcy Can Not Do
Bankruptcy can not, however, cure every financial problem. Nor is it the right step for every individual. In bankruptcy, it is usually not possible to:
1. Eliminate certain rights of “secured” creditors UNLESS you intend to return the property to the creditor. A “secured” creditor has taken a mortgage or other lien on property as collateral for the loan. Common examples are car loans and home mortgages. You can force secured creditors to take payments over time in the bankruptcy process and bankruptcy can eliminate your obligation to pay any additional money if the property is returned to the lender. Nevertheless, you generally can not keep the collateral (property) unless you continue to pay the debt.
2. Discharge types of debts singled out by the bankruptcy law for special treatment, such as child support, alimony, certain other debts related to divorce, most student loans, court restitution orders, criminal fines, and some taxes.
3. Protect cosigners on your debts UNLESS you file a Chapter 13. When a relative or friend has co-signed a loan, both of you owe the debt. If one of you is "taken off" the debt becuase of a bankruptcy filing, the other still owes the debt.
4. Discharge debts that arise AFTER bankruptcy has been filed. Generally speaking, a bankruptcy only deals with debts that were created before the bankruptcy was filed.