Why File Chapter 13? Does Filing Bankruptcy Stop The Harassment?

First and foremost in most people’s minds is they want peace of mind.  Yes, the filing of a bankruptcy case will stop the creditors’ harassment.  If creditors continue harassing the debtor after his or her bankruptcy case is filed, the creditor can be sued in bankruptcy court for money damages.  Most good people need to stop the repo man from taking their car or the mortgage company from foreclosing on their home.   

Chapter 13 bankruptcy cases allow individuals to get current on property they need.  Property an individual, or husband and wife, needs would necessarily include a car, right? Gone are the days of horse and buggy, and Dallas’ DART, well some of us just want to drive our own car. The filing of the bankruptcy stay creates the Automatic Stay of collection against the debtor and his or her property.  The Automatic Stay is not some limp defense that a judge gives lip service. It has bite.  To learn more about suing dead beat creditors who intentionally violate this Automatic Stay, read Chuck Newton’s StayViolation.Com recent article by clicking on this link: Posting Sign About The Debtor Can Constitute A Stay Violation (Judgment Achieved On One Of Our Cases)

Sometimes individuals get behind on mortgage payments, try as they may that loan modification with Wells Fargo, Bank of America, or another bank won’t work, there’s not enough money coming in to pay a substantial back payments and at the same time making the regular mortgage payment. Chapter 13 gives people control over how many months to spread out the back house payments, even up to five years, and the mortgage company will accept this pay back time in most cases, however, the mortgage company expects the homeowner to stay current on his or her house payments after the Chapter 13 bankruptcy case is filed. And, unless homeowners insurance and property taxes are escrowed, the homeowner will need to furnish proof of current homeowners insurance to the mortgage company and pay the property taxes when due. 

That’s why people file Chapter 13 in most cases. Other times Chapter 13 cases are filed to pay back income taxes and child support.  Those cases are typically filed after a debtor has his or her wages garnished. The filing of the bankruptcy case will stop future garnishments, levies and the filing of tax liens against the debtor’s property.

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