Filing for bankruptcy can bring debt relief, but for those with co-signed loans or joint accounts, it may complicate financial responsibilities. When a loan or account is shared, both parties are responsible for the debt, and bankruptcy can shift the burden in unexpected ways.
When someone co-signs a loan, they are legally bound to the same responsibilities as the primary borrower. This means that if the borrower cannot repay the debt, the lender can pursue the co-signer for payment. Bankruptcy can change the situation depending on the type filed.
In Chapter 7 bankruptcy, the primary borrower’s debts are typically discharged, meaning they no longer have to pay them. However, the co-signer remains fully responsible for the debt.
The lender can pursue the co-signer for the entire balance, and if the co-signer cannot pay, they may face collection actions, wage garnishments, or negative credit reporting.
Chapter 13 provides some protection for co-signers. During the repayment plan (usually three to five years), an automatic stay known as the “codebtor stay” may prevent creditors from pursuing the co-signer, provided the borrower keeps up with the plan payments.
This stay can be lifted if the creditor proves that the co-signer directly benefits from the debt, such as using a car financed through the loan.
Joint accounts, often opened by spouses or family members, operate similarly. Both parties are equally liable, which means bankruptcy affects each account holder.
Bankruptcy can provide significant debt relief, but it is important to consider its impact on co-signers and joint account holders. Each bankruptcy type has different effects, so it is important to review all options with a legal professional. For guidance tailored to your situation, contact O’Brien Law Firm, LLC, today.
If your source of income comes to a sudden halt, you might find yourself unable to pay your debts. Under such circumstances, you have to file for bankruptcy to keep bill collectors at bay, restructure your loan installments, and eliminate your debt in some cases. The question is whether you should consider filing for bankruptcy on your own or if you should seek guidance from an attorney.
You can ultimately determine your financial future by correctly filing for bankruptcy. Filing your bankruptcy without an attorney can save you the cost of attorney fees, but there are other major risks you don’t want to take as they outweigh those savings. At O’Brien Law Firm, LLC, we have seen many cases in Southaven, MS, where an experienced attorney has made a substantial difference in achieving a favorable outcome. Contact us today for professional guidance to navigate this challenging process successfully.
If you are unable to repay your debts, you have very limited options other than filing for bankruptcy. Unfortunately, filing for bankruptcy can negatively affect your future credit and loan opportunities. Here are some of the ways that bankruptcy can affect your financial future.
Depending on your situation, bankruptcy has the potential to knock about 200 points off your credit score. If you have an average score of 680, you can lose between 130 and 150 points in bankruptcy. A person with a 780 score can easily lose between 200 and 240 points in bankruptcy. The loss of credit score points can affect your ability to secure loans in the future, especially because lenders consider your credit score before giving you a loan.
Unfortunately, some credit reports can stay on for a longer time, depending on the type of bankruptcy. If you incur a Chapter 7 bankruptcy, it will remain on your report for ten years. A Chapter 13 bankruptcy stays on your record for 7 years. The longer you have that credit report, the longer it will take you to get new credit, as the bankruptcy mark will still be present in your credit report.
Ultimately, you can get out of the red if you work hard toward regaining your financial stability. However, rebuilding your credit score after bankruptcy is a gradual process that requires consistent financial discipline. Still, you can adopt different strategies, such as getting a credit card that has a small limit or getting a credit card that allows you to deposit cash as collateral. You should then use any one of these cards responsibly, paying off the balances each month in full. Paying off your bills and loans on time can rebuild your credit score with time.
Bankruptcy can sometimes be inevitable, especially when you lose your source of income and you have outstanding loans to pay. Filing for bankruptcy is the safest way to get your creditors off your back as you find ways to offset any loan balances. For expert guidance on bankruptcy and debt problems, contact O’Brien Law Firm, LLC, today.
Filing for bankruptcy can provide temporary financial relief from creditors and open doors for a fresh start. However, you may have to liquidate your assets to pay your debts. The good news is that not all assets qualify for liquidation.
Bankruptcy exemptions safeguard your property during bankruptcy procedures. These federal and state laws allow you to keep essential property so you can stay afloat even when indebted. The legislation protects some of your assets when filing for bankruptcy on the grounds that they are vital for your work and domestic needs. Items like clothing, furniture, and computers are exempt, meaning a bankruptcy trustee cannot claim them to pay your debts.
Chapter 7 bankruptcy is a liquidation bankruptcy option that protects exempt assets from seizure by a bankruptcy trustee or creditor. It prevents creditors from repossessing property or collecting payments for unsecured debts. Under this chapter, a bankruptcy trustee can only collect non-exempt items and sell them to repay creditors. Chapter 7 legally discharges your unsecured debts, giving you a fresh start.
Exempt assets in Chapter 7 bankruptcy include your primary residence, an inexpensive main vehicle, household goods, professional tools, health aids, and everyday items. Other exempt assets include federal benefits, retirement accounts, social security compensation, and life insurance policies.
If you have a regular income but cannot afford to pay your debts, consider filing for this bankruptcy option. Also known as a wage earner’s plan, Chapter 13 bankruptcy allows you to pay your debts over a specified period, typically 3–5 years. The best part is that you keep everything under a court-approved debt repayment plan. All assets automatically become exempt, meaning a bankruptcy trustee or creditor cannot repossess your property. You only need to stick to the plan to maintain your possessions.
Understanding the different bankruptcy options can be overwhelming. Our experienced attorney at O’Brien Law Firm in Southaven, MS, can help you navigate these unchartered waters. Call us today for legal assistance.
If you are in debt, financial difficulties may exacerbate your debt problems and leave you with no choice but to file for bankruptcy. In the heat of the moment, you may be tempted to file for emergency bankruptcy to get immediate reprieve. While an emergency bankruptcy filing may help, it is often a complex process with demanding requirements.
What Is an Emergency Bankruptcy Filing?
Emergency bankruptcy is a type of bankruptcy that allows for immediate reprieve from debts. It differs from normal bankruptcy filings in that the debtor only has to file the minimum required files to get the court to grant a stay order halting collections from creditors. In normal bankruptcy filings, one has to follow the entire process laid out in law, which can take months.
Requirements for an Emergency Bankruptcy Filing
Although the exact number of documents may vary depending on the specific court, below are the minimum documents you need to present when filing for emergency bankruptcy:
Notably, the above documents will help you get creditors off your back. However, you still need to provide additional documents and information on your finances within the specified period to avoid invalidation of your filing.
Looking for an Experienced Attorney?
At O’Brien Law Firm in Southaven, MS, we can help you file for emergency bankruptcy. Call us today to book a free consultation with our bankruptcy lawyers.
