Stop foreclosure now and keep your home!
30 Sep
In short. YES FOR BOTH.
Now, in long……
STOP GARNISHMENTS. EVEN BEFORE THEY START
============================================
Filing bankruptcy can stop a garnishment immediately. If all funds that have been garnished have been properly exempted, the garnished funds can even be returned to the debtor.
When a bankruptcy is filed, a special provision of the bankruptcy code kicks in and stops all creditor action to collect a debt. The special provision of the bankruptcy code is Section 362 and is called “the Automatic Stay”. The Automatic Stay is a court order to all creditors to stop collecting debts immediately.
When a paycheck or bank account is garnished, money is taken from the paycheck or other account and held until a certain time when the money is supposed to be delivered to court and turned over to the creditor. The date that the creditor is supposed to pick up the garnished funds in court is often called “the return date”. If a bankruptcy is filed before the return date set for the garnishment, the garnishment is immediately stopped and the creditor cannot continue to collect the debt through the garnishment method.
An employer or bank that has been instructed to hold the garnished funds on behalf of the creditor will usually release all garnished funds to the debtor after the debtor has provided proof of bankruptcy filing. Usually, the bankruptcy attorney for the debtor will write a letter to the employer or bank and explain that the garnishment has been stopped by the filing of the bankruptcy and that the employer or bank should no longer withhold the funds from the paycheck or bank account.
Once notice has been given to an employer or bank regarding the bankruptcy filing, the employer or bank will then usually send all garnished funds that have been held to the bankruptcy trustee assigned to administer the debtor’s bankruptcy case. If the debtor, or debtor’s attorney, has successfully exempted the garnished funds on the bankruptcy petition, the bankruptcy trustee will “abandon” any interest in the funds and turn the funds over to the debtor.
Stopping a garnishment and recovering funds held pursuant to a garnishment can be very complicated. The process requires an expert knowledge of bankruptcy procedure and bankruptcy exemptions. Debtors should always consult with an experienced bankruptcy attorney concerning serious bankruptcy matters like stopping a garishment and recovering garnished funds.
FORECLOSURE
=================
Filing a Chapter 7 bankruptcy temporarily stalls your lender’s right to foreclosure, until it gets permission to go forward with the foreclosure proceedings. However, doing so could have other very serious consequences.
I caution you against falling for some of the schemes that have been developed that entice a homeowner who is facing foreclosure to transfer a portion of the title to his home to a third person, who then files for bankruptcy. While that may temporarily delay the foreclosure courts are getting wise to the scheme and the delay may be very temporary. Typically the homeowner pays large fees and loses his or her home anyway. Some of the people engaging in such schemes have also been charged with fraud.
If bankruptcy seems to be an option, consider a Chapter 13 or "wage earner" repayment bankruptcy as an alternative to a Chapter 7 straight bankruptcy. Under a Chapter 13 plan, it is possible to make up the missed payments out of your income through the repayment plan.
If you face foreclosure, bankruptcy may or may not make sense, depending on your other obligations and income sources, and the advice of an attorney will be very helpful.
I truly hope this has helped.
Enjoy your day,
Damon
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4 Responses for "Can we declare bankrupcy to stop wage garnishment fm credit card and stop foreclosure proceedings?"
In short. YES FOR BOTH.
Now, in long……
STOP GARNISHMENTS. EVEN BEFORE THEY START
============================================
Filing bankruptcy can stop a garnishment immediately. If all funds that have been garnished have been properly exempted, the garnished funds can even be returned to the debtor.
When a bankruptcy is filed, a special provision of the bankruptcy code kicks in and stops all creditor action to collect a debt. The special provision of the bankruptcy code is Section 362 and is called “the Automatic Stay”. The Automatic Stay is a court order to all creditors to stop collecting debts immediately.
When a paycheck or bank account is garnished, money is taken from the paycheck or other account and held until a certain time when the money is supposed to be delivered to court and turned over to the creditor. The date that the creditor is supposed to pick up the garnished funds in court is often called “the return date”. If a bankruptcy is filed before the return date set for the garnishment, the garnishment is immediately stopped and the creditor cannot continue to collect the debt through the garnishment method.
An employer or bank that has been instructed to hold the garnished funds on behalf of the creditor will usually release all garnished funds to the debtor after the debtor has provided proof of bankruptcy filing. Usually, the bankruptcy attorney for the debtor will write a letter to the employer or bank and explain that the garnishment has been stopped by the filing of the bankruptcy and that the employer or bank should no longer withhold the funds from the paycheck or bank account.
Once notice has been given to an employer or bank regarding the bankruptcy filing, the employer or bank will then usually send all garnished funds that have been held to the bankruptcy trustee assigned to administer the debtor’s bankruptcy case. If the debtor, or debtor’s attorney, has successfully exempted the garnished funds on the bankruptcy petition, the bankruptcy trustee will “abandon” any interest in the funds and turn the funds over to the debtor.
Stopping a garnishment and recovering funds held pursuant to a garnishment can be very complicated. The process requires an expert knowledge of bankruptcy procedure and bankruptcy exemptions. Debtors should always consult with an experienced bankruptcy attorney concerning serious bankruptcy matters like stopping a garishment and recovering garnished funds.
FORECLOSURE
=================
Filing a Chapter 7 bankruptcy temporarily stalls your lender’s right to foreclosure, until it gets permission to go forward with the foreclosure proceedings. However, doing so could have other very serious consequences.
I caution you against falling for some of the schemes that have been developed that entice a homeowner who is facing foreclosure to transfer a portion of the title to his home to a third person, who then files for bankruptcy. While that may temporarily delay the foreclosure courts are getting wise to the scheme and the delay may be very temporary. Typically the homeowner pays large fees and loses his or her home anyway. Some of the people engaging in such schemes have also been charged with fraud.
If bankruptcy seems to be an option, consider a Chapter 13 or "wage earner" repayment bankruptcy as an alternative to a Chapter 7 straight bankruptcy. Under a Chapter 13 plan, it is possible to make up the missed payments out of your income through the repayment plan.
If you face foreclosure, bankruptcy may or may not make sense, depending on your other obligations and income sources, and the advice of an attorney will be very helpful.
I truly hope this has helped.
Enjoy your day,
Damon
References :
Yes. Well, sort of.
To file bankruptcy is to ask the court to troll through all your financial matters and then declare to the world that there is no way you can pay your bills. You will then have debts wiped out or the court will force a restructuring. You will be forced to sell assets and otherwise pay as much as you can before the file is closed.
The lender on your home has a valid claim to the home. Unless there is something wrong they will get the home or you will be asked to bring all the payments up to date. Their lien on the home will not go away with a bankruptcy. You just slow down the foreclosure. A bankruptcy might mean that when the other debts are discharged you can afford to make the house payments so you might be able to keep your home.
Get down to the library and read up on bankruptcy. Then set up a time to meet with a bankruptcy attorney so you know where you stand. I expect you can get an initial meeting without needing to pay a fee.
Remember that the lenders have rights so the bankruptcy process is there to find a middle ground. It is not a way for you just to walk away with no pain.
The link below on foreclosure might help provide some idea of the foreclosure process.
References :
Foreclosure overview -> http://johncorey.wordpress.com/2007/04/11/foreclosure-overview/
Buying (REO) property from the bank -> http://johncorey.wordpress.com/2007/04/11/reo-deals-when-you-are-buying/
John Corey
Real estate investor, 20+ years - multiple states and countries
http://johncorey.wordpress.com/... - advice for real estate investors
Unit 30 pretty much covered everything except to point out that under the new bankruptcy laws you first must go through 6-months of credit counseling before you can file.
After the 6-months is over you have to take a means test to determine weather you qualify for chapter 7 or 13.
References :
Finance Manager for over 7-years.
I am unsure about the credit card information , however, on the forclosure side…. My company may be able to help you out. visit my website and fill out the short form , let's see what kind of help is available to you in this situation. http://www.consolidatedsg.com/brmj41975/fc
I hope you have the best of luck in whatever you choose to do.
References :
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