When Things Go From Bad To Worse And Bankruptcy Is Inevitable

No one expects a chapter 7 filing to be in their future. Some people wonder how bad their financial situation should be before they have to take action and file. While not being able to pay the bills is a start, the below situations will call for some immediate action before things get dramatically worse. Read on and heed the below signs of serious financial problems.

You're About to Lose Your Home

If you are behind on your mortgage, the lender will only wait so long before they take action to physically remove you from your home. Don't let that day come. If you cannot make your mortgage payments because you are having to pay large credit card or medical debts, a chapter 7 filing could bring immediate relief in several ways. First, the filing stops foreclosure actions immediately. No matter how far along in the process your lender is, they must call a halt to everything.

However, it's important to understand that you cannot stay in your home permanently without making mortgage payments. The automatic stay that stopped the foreclosure action is only temporary, and you will have to work with the lender to make things right or you could still lose your home. That brings up the second beneficial aspect of filing for chapter 7. You no longer have to make payments on your credit cards and any other debts that are not connected to property like your home is. That frees up more money to put toward your mortgage. If you want to hang on to your home, talk to your bankruptcy lawyer about how to make payments once you declare bankruptcy.

You Are About to Lose Your Vehicle

Just like your home, the filing will trigger an automatic stay to prevent your vehicle from being repossessed. However, you also have to take additional actions to prevent losing the vehicle. Speak to your lawyer about using the temporary reprieve to get caught up on your back payments on your auto loan and about reaffirming your auto loan.

The Court is Calling You

Unfortunately, bill collectors can take action and file a civil suit against you in court. The results can mean wage garnishment, property liens, and more. No matter where you are in the court process, however, a chapter 7 filing will help you. Unless the debts are secured to property, tax debts, student loans, or for back child support, the judgments can be vacated and the punitive actions stopped immediately.

Any of the above actions should prompt you to speak to a bankruptcy lawyer about your financial situation at once. Contact a local law firm, such as McCool & McCool, to learn more.