Modesto Bankruptcy Lawyer Blog

A recent article out of St. Louis looks at the two personal bankruptcy options available to all Americans -- Chapter 7 bankruptcy and Chapter 13 bankruptcy..

Modesto bankruptcy lawyers will take a look at which form of bankruptcy could be appropriate for the average consumer struggling with debt. Whether choosing Chapter 7 bankruptcy or Chapter 13 bankruptcy in Modesto, the consumer can obtain debt relief.

Both forms allow for either all or a majority of a person's unsecured debt to be discharged after going through the bankruptcy process. So, both are beneficial. But there are requirements for qualifying that are based on a person's income and their individual situation. That's why consulting with an experienced Modesto bankruptcy lawyer should be your first step if you're considering bankruptcy.

Chapter 7 bankruptcy is the form that most people think of when they think of bankruptcy. This is where a person's debts are discharged and they may be called on to give up some of their possessions to sell and pay off debt. But that's not always the case. There are many situations where a person has few pricey assets or they owe more on them than they're worth and creditors aren't interested in them.

That means a person can keep their assets and still have their credit card, medical and other debt wiped clean. This is a form of bankruptcy considered for non-wage earners or people who have more debt than their income can reasonably satisfy. They are unable to pay their debts either because of job loss or are overwhelmed with debt.

According to statistics from the American Bankruptcy Institute, Chapter 7 bankruptcies consistently make up about 70 percent of personal bankruptcies nationwide.

In the first two quarters of 2011, they made up 71.3 and 72.32 percent of bankruptcies, respectively. In 2010, they peaked at 73.45 percent during the second quarter and going back a few years they made up as low as 57.45 percent in 2006. The number of bankruptcies has more than doubled from 597,965 in 2006 to 1,536,799 in 2010. Numbers for 2011 should be relatively close to 2010 numbers.

But studies have shown that Chapter 13 bankruptcies have become increasingly popular. In 2005, lawmakers changed the standards for filing for Chapter 7 bankruptcy, making it more difficult. Since then, some people have been forced to file Chapter 13 because they make too much money for Chapter 7.

This may be because people who make money, but whose houses are dragging them down, are looking at bankruptcy as a viable option. If people bought a house at the peak of housing prices only to see them crumble and currently are living in a house that is worth 1/4 of what they paid for it, they may allow it to go into foreclosure.

That could be a strategic decision or it could be because of job loss or job transfer. In these cases, it may be possible for the bank to come after the homeowner and seek a deficiency judgment, which means the bank attempts to get the homeowner to pay the difference between the mortgage amount and the sale price at auction after foreclosure.

For these people, perhaps Chapter 13 bankruptcy in Modesto fits best. Under Chapter 13, all debts aren't simply discharged like in Chapter 7. In this form of bankruptcy, the debtor must set up a payment plan, typically over a 3- to 5-year period. During this time, they make monthly payments to pay back some of the debt. The exact portion is determined on a case-by-case basis.

After the payments are made, the debt is considered discharged. While this may be more expensive, it guarantees that a person's assets remain intact. This includes a house, vehicles and other assets.

Continue reading "Which Chapter of Bankruptcy in Modesto Is Right For You? 7 or 13?" »

Two Georgia legislators recently introduced a bill in Washington D.C. that would allow people to pull money from their retirement accounts penalty free if they use it to pay for their mortgages, The Atlanta Journal-Constitution reports.

While this may be a well-meaning attempt to solve the mortgage crisis that has hammered our country, this by no means is a good idea.

Filing for bankruptcy in Modesto is a much smarter move if you are struggling to make mortgage payments.

Here's why. In bankruptcy, retirement funds are protected from creditors. Without money stored away for the future, you'll be robbing from your retirement in order to save a house that likely has lost its value. Even if a person wants to stay in their house, bankruptcy can help.

As Modesto bankruptcy lawyers have seen time and time again, people can file for bankruptcy and stay in their home during the process even if they've missed payments. They ften can stay in their home with a modified payment plan after bankruptcy has ended.

Or, after all their debts have been discharged, they can be debt free and can start a new life without credit card balances or other debt. It makes much more sense to go that route that throw away whatever long-term savings you have.

Sen. Johnny Isakson and Rep. Tom Graves have said they believe their bills would help people stay in their homes in these difficult economic times.

Isakson said he doesn't think that the country will be able to recover financially until the housing market turns around. He said he believes the legislation would reduce foreclosures and "stabilize home values."

Graves said many Americans who have saved up for retirement are now out of work and the current tax laws don't allow for withdrawals without paying a 10 percent penalty. The law, he said, would quash that penalty for those using the money for their houses. He believes this will cut down on late payments, foreclosures and help boost the economy.

Maybe this would help the economy and it would be fine to have that option available, but tossing away your retirement to save a house can't be a strong consideration for most people. A house is a necessity, but so is having the money stored away for food, medical care and other cost-of-living expenses when you can no longer work.

While the economy is bad and jobs are scarce, being at an age where a person can still work makes it a lot easier to one day build a secure retirement. For older consumers who can no longer earn a paycheck, tossing away your savings is not a smart plan. It would be better to lose a house, get rid of existing debt through bankruptcy in Modesto and start to repair your credit without touching your retirement accounts.

Continue reading "Modesto Bankruptcy Watch: Retirement and Bad Real Estate Debt " »

An article out of Florida reports that more women than men are seeking help with personal debt, possibly brought on by job loss for men in recent years, the Orlando Sentinel reports.

Regardless of why people are seeking credit counseling, or which gender is more likely to seek help, it is a problem that harms and affects people of all backgrounds. Modesto Bankruptcy Lawyers have helped many people of various stages of life with filing for bankruptcy in Modesto.

Medical bills, job loss and predatory lending have left many Americans and people here in Modesto in over their head in debt. Some seek help with their homes and slip into mortgage foreclosure scams that can leave them in worse shape financially. Others look to credit counselors, who try to help the consumers reorganize debt or negotiate with creditors and lenders. But they charge a fee to people who are stuck trying to get by often by paying the minimum on their credit cards. With little authority, but only advise, sometimes it doesn't work. Other times it's a scam.

But filing for and qualifying for bankruptcy in Modesto will help people clear away debt and give them a fresh start. Being able to clear away debts that have creditors calling and threatening to garnish wages is refreshing for many of our clients who feel like there are few places to turn for help. We will assess your situation and help you figure out what avenues exist to best help you.

And for those who want to stay in a house that is on the brink of foreclosure, filing for bankruptcy immediately stops the process.

According to the article out of Florida, more than 62 percent of the clients of one of the largest credit-counseling agencies in the state are female. Historically, the gender gap has existed going back for most of the last decade.

The newspaper and others speculate that more women today are the breadwinners in households, though studies show women still make about 80 percent of what men make in the workplace. But with 4 million people -- mostly men -- losing their jobs in the construction industry during the Great Recession, it's possible that more women are being forced to lead the household and are more in charge of family finances.

Whatever the reason for out-of-control debt, credit counseling may not be the answer for everyone. Bankruptcy can sometimes be a more stable and long-term solution to debt and can be more beneficial to a person's credit score than counseling. If debt lingers, a credit score can suffer. But taking care of it in one fell swoop can more quickly get a person or family on a fresh path financially.

Continue reading "More Women Seek Credit Card Debt Help Than Men in California" »

The Stockton Record is reporting that while foreclosure filings in California are down nearly 28 percent from a year ago in May, the Stockton metro area remains among the hardest hit by the mortgage meltdown.

Consulting with a bankruptcy attorney in Stockton or Modesto could stop foreclosure or prevent you from being subjected to a deficiency judgment or other consequences. Bankruptcy laws are designed to help people take control of their finances, and using those laws to one's advantage can provide many advantages.

The Stockton metropolitan area, which includes all of San Joaquin County, ranked second nationwide in the rate of default filings, followed closely by Vallejo-Fairfield ranking third and Modesto ranking fourth. Las Vegas led the way with the most defaults filed followed by the Reno-Sparks area in fifth.

"It's a reflection of how deeply buried the Stockton area was by the mortgage tsunami. We're up to 18 straight months of year-over-year decreases in foreclosure activity," Daren Blomquist, a RealtyTrac spokesman said of San Joaquin County legal filings, which include trustee sales, notices of default and lender repossessions. "The trend is in the right direction, but the numbers are still persistently high."

According to RealtyTrac there were 1,652 recorded foreclosure filings on San Joaquin County houses in May. Though this shows an almost 26 percent decrease from the 2,222 recorded in the same month in 2010 it still means 1 out of 139 households are filing for foreclosure.

Nationally, RealtyTrac reported nearly 215,000 foreclosure filings in May, a drop of 2 percent from April and a drop of 33 percent from May 2010. That means that last month, 1 out of every 605 housing units filed for foreclosure. Led by California, five states accounted for 51 percent of the national foreclosure activity in May, where almost 52,000 properties got a foreclosure filing. Florida had 19,192 foreclosure filings followed by Michigan with 14,614, Arizona with 13,122 and Nevada with 11,039.

"Foreclosure processing delays continue to mask the true face of the foreclosure situation, although there were some clues in the May numbers of what lies behind that mask," says James Saccacio, chief executive officer of RealtyTrac. "First, activity spiked in May for various stages of the foreclosure process in some states, a pattern that has occurred in several states over the past few months. This pattern provides evidence that lenders are somewhat unevenly pushing batches of bad loans through foreclosure as they overhaul their paperwork and documentation procedures and as they determine that some local markets are able to absorb more foreclosure inventory.

Filing for bankruptcy doesn't have to be painful; millions of Americans do it every year. Many bankruptcies are beyond the debtor's control, caused by circumstances like a devastating illness or injury or loss of a job. Filing for bankruptcy is an option to rid yourself from debt due to medical bills, credit cards or student loans. Let our attorneys assess your case and determine the best course of action for you.

Continue reading "Foreclosure Filings Still up in Stockton, Modesto Areas" »

The Sacramento Bee recently chronicled the experiences of two couples struggling with credit card debt. Both couples used a debt solutions company and took more than five years to pay off their debts. Evaluating your options is recommended before you sign on with any agency claiming to make you debt-free.

Contacting a bankruptcy lawyer in Modesto could have given these couples a fresh start much sooner.

Most people think of bankruptcy as something to be ashamed of, but it's not. Consumers that have fallen on hard times because of medical bills, real estate debt and credit card debt deserve a new start. An experienced bankruptcy lawyer can explain the two types of bankruptcy options a consumer has. One can wipe out most of your debts immediately so you can start anew. Credit counseling, which won't save your credit rating, is another option. Your credit report will show late payments that will stay on the report for years. This will greatly affect your ability to obtain loans.

The state Department of Corporations keeps on eye on the credit counseling agencies in California.

Here are some cautionary tips and red flags regarding credit counseling agencies:

-Considerable upfront fees - most places charge you a set-up fee and then add on additional fees.

-Misplaced or diverted payments - some companies won't tell you your first month's payments are actually fees. So your money going to the credit counseling company and not your creditors. Missed payments mean bad marks on your credit report, which will last for years.

-Idealistic promises - no company will wipe out your debt for free without damaging your credit rating. Supervised payment plans involve systematically paying off your loans.

-No accreditation - agencies that aren't accredited by the National Foundation for Credit Counseling and/or Association of Independent Consumer Credit Counseling Agencies should be avoided. Accredited credit counseling agencies meet minimum standards for free or low-cost confidential services.

Bankruptcy laws give legal protection that most other debt-relief options don't; personal bankruptcy shouldn't be viewed as a last resort, but as a new beginning. Your own situation will determine if bankruptcy is the right choice for you. Let an experienced bankruptcy lawyer assess your financial needs and explain your options.

Continue reading "Those Considering Debt Solution Agency should speak with Modesto Bankruptcy Attorney " »

The end of first quarter 2011 reflected that the West region still holds the highest unemployment rate of any region in the country at 10.7 percent. It should be no surprise for those who are jobless then that California ranks 4th in bankruptcies per capita according to The Orange County Register.

Individuals who suffer from insurmountable debt should seek the help of an experienced Stockton bankruptcy lawyer in order to get your life back on track. You do have options -- an experienced bankruptcy attorney can help. One income households often find it impossible to keep up with mortgage payments, credit card bills, and medical expenses over time, which in many cases leads to filing for bankruptcy in California.

When we think of the classic bankruptcy candidate we often think of frivolous spenders, victims of divorce settlements or people who spend beyond their means. The recession has killed most of those old, unfair stereotypes. Recent data indicates that healthcare is the number one reason for bankruptcy in households that claim debt. The U.S. Department of Labor Bureau of Labor Statistics recently reported that California ranks 2nd in the nation in unemployment with a 12 percent rate. This is substantially higher than the national average recorded in March of 2011 at 8.8 percent. Twelve percent of Californians without jobs means a substantial amount of families without health benefits.

California reported 7.05 bankruptcy filings per 1,000 population for the 12 month period ending March 31, 2011. According to the U.S. Bankruptcy Court, California was ranked 4th highest among states, an increase from the previous year when the state was ranked 8th and had 6.15 bankruptcies reported per 1,000 population.

Nationally, there were over a million and a half filings for the 12 month period ending March 31, 2011 which is a 2.6 percent increase when compared to the same months of the previous year. Interestingly, personal bankruptcies filed increased by 6.8 percent while business bankruptcies filed decreased by 11.3 percent for the 12 month period ending March 31, 2011.

The stress of filing for bankruptcy can be overwhelming, especially when you are faced with the fear of potentially losing your home. Contacting an experienced bankruptcy law firm can help you make a fresh start -- experience the relief that comes with a new beginning.

Continue reading "California ranked near the top nationally in bankruptcies filed" »

Modesto bankruptcy lawyers have helped thousands deal with the economic downturn by seeking the fresh start that can come with bankruptcy protection. With the economy the way it is the last few years, many of us have had to take the necessary measures to keep our heads above water in order to protect our families. These steps have led to maxed out credit cards, bad credit, overdrawn accounts and unpaid mortgages or loans. The help of a bankruptcy lawyer can help you save your home from foreclosure and give you a clear vision on the right course of action to take.

Banks and lenders are continuing to take advantage of individuals who suffer from hardships and who can't make ends meet. The Modesto Bee recently reported about several cases of soured plans to build and develop northern Modesto. Multi-million dollar debts can't be paid, which have led to civil lawsuits and court dates. Westamerica Bank has captured one large development property after going to a foreclosure auction recently. Another 36 acre property was scheduled for foreclosure but the over $11 million debt was delayed when the developing company filed for bankruptcy the afternoon before the auction was to take place.

The state of California reported over 255,000 filings for bankruptcy in 2010. The filings per capita rate was 6.90 per 1,000 people. The ratio breakdown of filings were 76 percent filed to be discharged of all debts (Chapter 7) and 24 percent filed to pay off the debt under a three to five-year plan (Chapter 13). In 2010, there were over 500,000 projected foreclosures in California. It is estimated that during 2009 through 2012, there will be almost 2 million foreclosures.

Chapter 7 and Chapter 13 bankruptcy are option to help consumer gain a fresh start. Most homeowners may not know that it is possible to keep your home after filing for bankruptcy in Chapter 7 or Chapter 13. Furthermore, creditors can be fined for imposing or violating your rights if they continue to harass you about collecting on owed debts after you file. Determining which chapter and filing for bankruptcy can be a complicated process so having an experienced attorney who can monitor the situation and help you make the right decisions should be a top priority for any individual facing financial problems.

Continue reading "Preventing foreclosure after filing for bankruptcy a possibility with the help of an experienced Modesto bankruptcy lawyer" »

The number of January bankruptcy filings dipped below 100,000 last month for the first time in a year. January 2010 was the last time fewer than 100,000 filings were recorded, according to the National Bankruptcy Research Center, which reports filings were down 22 percent compared to December.

Bankruptcy lawyers in Stockton and Modesto continue to see consumers seeking Chapter 7 protection and Chapter 13 bankruptcy in record numbers throughout the U.S. Bankruptcy Court's Eastern District of California.

Primary drivers of bankruptcy filings continue to be foreclosures and bad real estate debt, unemployment, medical bills and insurmountable credit card debt. January filings totaled 3,924, up 5.7 percent from a year ago. By comparison, just 1,829 were reported in the Eastern District in January 2005.

Last year, 54,365 sought bankruptcy protection in the Eastern District of California, compared to 17,397 in 2007, before the economic downturn.

Nationwide, about 1 in every 3,000 people sought bankruptcy protection. As the economic recovery took tentative hold last year, the number of filings grew increasingly uneven across the country.

Filings in Nevada remain at a level more than twice the national average. And rates in Georgia, California and Tennessee remain at more than 1.5 times the national average. Eight areas reported rates less than half the national average: Alaska, South Dakota, District of Columbia, South Carolina, Vermont, New York, Wyoming and North Dakota.

California is one of just four states where January filing rates were higher than last year. The others were Delaware, Idaho and Utah. Several state reported levels at least 30 percent below last year's, including Vermont, Connecticut, New York and D.C.

Continue reading "Bankruptcies in Modesto, Stockton, Continue to Increase Even as Numbers Fall Nationwide" »

Short of winning the California State Lottery, bankruptcy is probably the fastest way for many overwhelmed Modesto residents to get out of debt. There are income restrictions as to who can file for Chapter 7, or total, bankruptcy, so a bankruptcy lawyer may recommend Chapter 13 bankruptcy instead. As opposed to eliminating your debt totally, Chapter 13 negotiates your debts down to a lower amount and puts you on an affordable payment plan to rid you of them over time.

That being said, many people wonder how long it actually takes for bankruptcy to clear away debts. In the case of Chapter 13 bankruptcy, it depends on the length of your payment plan, but the average plan is structured over three to five years.

For Chapter 7 bankruptcy, on the other hand, there are no payments to make. Most of your unsecured debts, like credit cards and medical bills, will be eliminated completely in a few short months. On average, people who file for Chapter 7 bankruptcy with a lawyer in Modesto can see their eligible debts gone within 90 to 120 days, although you may even start seeing the effects almost immediately since creditors and collections agencies have to stop calling once you file. Certain debts will still need to be paid, however, such as student loans, government loans, back taxes, child support and alimony.

Bankruptcy can stay on your credit report for seven to 10 years, but you can start rebuilding your credit immediately after you file for bankruptcy if you make smart financial decisions and timely payments. Contact a bankruptcy lawyer to devise a financial plan for your debts today.

Many Modesto residents find themselves considering bankruptcy to get rid of or pay down outstanding debts. As you educate yourself on your bankruptcy options, it's also a great idea to consider alternatives to bankruptcy. With the help of a bankruptcy lawyer and depending on your financial situation, some of these techniques might be helpful before you file for bankruptcy:

Negotiate Your Unsecured Debt. Credit card companies (one of the primary sources of unsecured debt) will sometimes work with you to negotiate down your debt without having to file for Chapter 13 (reorganization) bankruptcy. Since they are the last to get paid when you file for bankruptcy, it is better for most companies to settle your debt for a lower amount.

Surrender Your Property. Basically, this is like acting as your own repo man without the unexpected visit. This method works for secured loans, such as those for large appliances, cars, boats or electronics. Simply ask the retailer if they'll take back the item. You won't likely get any money back, but you will eliminate that payment. You can also sell off your high-priced possessions to the highest bidder, but this is likely to still leave you with a monthly payment until the original debt is paid off.

Do a Short Sale of Your Home. If you're upside down on your mortgage, you can sell your house for less than it's current market value. This is especially useful if you have enough equity built up to cover the cost of your loss. Keep in mind that you will have to work with your lenders to get their permission before you can do a short sale.

It's important to note that you may not even qualify for bankruptcy if you make too much money of if your debt is too high (more than $336,690 in unsecured debt and secured debt less than $1,010,650). If you do qualify, though, and these techniques simply aren't enough to get you out of debt, it might be time to ask a Modesto bankruptcy lawyer to explore your options for Chapter 7 or Chapter 13 bankruptcy.

Filing bankruptcy in Modesto is a fairly straightforward process. There are a few things you must do before you file in order to ensure that your bankruptcy filing is valid and in order to preserve as much of your credit rating as possible. Following these five steps can also help expedite the process:

1. Evaluate Your Recent Purchases. Any large purchases made just prior to filing may be seen by a bankruptcy court judge as fraudulent. Just because you know you're about to file doesn't mean you can run out and buy a new car, a new wardrobe and take out cash advances on your credit cards and think that the bankruptcy will wipe the slate clean. This is highly risky behavior that can end up getting your case dismissed at the least and having you charged with fraud at the worst.

2. Enroll in Approved Credit Counseling. According to the sweeping bankruptcy law changes in 2005, people who want to file for bankruptcy must attend mandatory credit counseling prior to filing. In this session, a counselor will spend 60 to 90 minutes reviewing your financial situation, suggesting alternatives to bankruptcy and creating a personal budget plan. This session costs around $50, depending on where you live and the services received.

3. Request a Fee Waiver. If you know you cannot pay for your credit counseling session, you must request a fee waiver from the organization conducting the counseling prior to your session. Approved credit counseling organizations can be found on the U.S. Trustee's website.

4. Obtain a Certificate of Proof. After your session, be sure to obtain a Certificate of Proof of completion. This is required in order to file.

5. Get a Professional Bankruptcy Attorney. Although you can file for bankruptcy on your own, it is not advisable. The paperwork involved is labor-intensive and you must know the intricacies of dozens of federal laws. Do yourself a favor and hire a professional.

Given the state of the economy in Modesto and throughout the nation, many people are finding it more and more difficult to maintain the high costs of homeownership. People who have been laid off or downsized due to the economy are struggling more than ever. They've had to use credit cards to make ends meet and with rising interest rates and mortgage balloon payments due from bad loans of the past few years, it's just tough going all the way around.

As a result, many people are considering filing Chapter 13 bankruptcy in order to begin to dig out from mountains of debt. But Chapter 13 bankruptcy is nothing to be embarrassed about. Thousands of Modesto residents are in the same boat financially. They're simply looking for a way out and Chapter 13 allows many people to reduce debt while keeping their homes.

Chapter 7 bankruptcy requires the sale of assets (like a home) in order to pay off debts. With the help of a Modesto bankruptcy lawyer, Chapter 13 bankruptcy simply reorganizes your debt so that you can pay it off over three to five years. You don't have to sell your home, and if you file for bankruptcy while your home is in foreclosure, you will likely be able to keep it.

How Does It Work?
Chapter 13 inducts an "automatic stay," which stops all foreclosure proceedings and collection activities as soon as you file. From there, you can negotiate a repayment plan with your lender to pay back your mortgage arrears through your Chapter 13 plan. You will still have to make all future mortgage payments, but you can't be foreclosed on due to outstanding payments due.

Some Modesto residents subscribe to the "broken mirror" theory of bankruptcy, believing that "you'll have seven years' bad luck" if you file for Chapter 7 or Chapter 13. However, this just isn't true. Some people's credit scores actually go up almost immediately after filing for bankruptcy, while others only need a few months to get back on their feet financially. If you're unsure of what path to take, it helps to consult a bankruptcy lawyer to devise a comprehensive plan for your financial future.

Rebuilding Credit with Chapter 7 Bankruptcy
Chapter 7 bankruptcy clears away your debts through the sale of your assets (home, car, electronics, etc.). Although it will stay on your credit report for ten years, this type of bankruptcy can help rebuild credit faster than you might think. All or most of your unsecured debts will be discharged within 90 days of filing, creating a zero balance on your credit report that is attractive to creditors. While unsecured credit may not be available to you right away, you can get secured lines of credit (requiring a deposit) to bring your FICO score into the 600 range or better within six months. The main advantage, though, is that total bankruptcy simply frees you of debt, allowing you to minimize your lifestyle to live within your means to rebuild your credit with wise financial decisions.

Rebuilding Credit with Chapter 13 Bankruptcy
With Chapter 13 bankruptcy, your Modesto attorney will work with a trustee to settle your debt for a lower amount, based on your ability to pay over the next three to five years. It stays on your credit report for seven years, but you will get to keep your home and property, giving you instant collateral for new lines of credit. Additionally, Chapter 13 inducts an "automatic stay," which is a court order for creditors to stop all collections activity and other pursuits, even eviction in some cases. This also helps to clear blemishes off of your credit report to boost your score.

Commercial bankruptcy rates in Modesto, CA are on the rise. In particular, the economic recession has had a marked effect on small and medium-sized businesses in this region. In June of 2009 alone, the U.S. Courts website reports that more than 16,000 businesses in the U.S. filed for commercial bankruptcy. Of those, 3% were located in the Modesto area. Considering this community is only home to 0.06% of the country's total population, this is a remarkable number compared to other areas of the country that are much larger and more densely populated with businesses.

Commercial Bankruptcy Options
Bankruptcy is often an attractive option for many business owners whose revenue simply can't match up with their expenses. Corporations, LLCs and partnerships are all eligible to file for Chapter 7 or Chapter 11 bankruptcy. Sole proprietors have the option to file for Chapter 13 bankruptcy and farmers can utilize Chapter 12 bankruptcy to reorganize debts.

Chapter 7 bankruptcy applies to commercial cases just as it does for individuals: it eliminates a business's debts by selling off assets in order to pay creditors. Chapter 11 bankruptcy helps businesses reorganize debt into a feasible payment plan out of future income or from the sale of assets. It's basically the same as Chapter 13 bankruptcy, except that it has higher debt limits. Chapter 12 bankruptcy is designed for farmers looking to reorganize debt. It allows the debtor to retain all property to pay off debts out of future income. Only a commercial bankruptcy lawyer can help you accurately file the correct paperwork needed for any type of bankruptcy in Modesto.

When you file for Chapter 13 bankruptcy in Modesto, you'll be granted an "automatic stay," which is a court injunction that stops all activity from creditors related to collections. This means that harassing phone calls, repossessions and foreclosures will all be halted immediately.

Chapter 13 bankruptcy structures your debts so that you can pay them over a three to five year period. With the help of a bankruptcy lawyer in Modesto, you can have your debts reduced and spread out over a payment plan that is feasible for you, given your level of income. Unlike Chapter 7 bankruptcy (which eliminates debts through the sale of assets), you can often keep your home with Chapter 13, which makes it more attractive to many Modesto residents.

An automatic stay takes immediate effect on most unsecured debts. It may prevent and/or halt the following: utility disconnections (for at least 20 days), home foreclosure, eviction (usually only for a short while though), collection of overpayments of public benefits such as disability or unemployment and multiple wage garnishments. There are exceptions, particularly in cases where judgments have already been made against you. For example, if a landlord already has a judgment of possession against you or alleges that you are endangering the property or are in possession of controlled substances, an automatic stay cannot prevent eviction. An automatic stay will also not stop certain IRS/tax proceedings, child support or alimony actions, criminal proceedings and loans from a pension.

A qualified bankruptcy lawyer can help you navigate the circumstances of your Chapter 13 bankruptcy filing. It's important to note that creditors have tricky ways of getting around automatic stays, so a lawyer will help protect your interests from every angle.