September 6, 2012
There are two types of bankruptcy filings available for consumers. Chapter 7 is a type of bankruptcy that lasts about four months and there is no wage garnishment. Chapter 13 is a type of bankruptcy that lasts for three to five years and your wages are garnished every month for those three to five years. Chapter 13 is a serious commitment of time and money. If an attorney is advising that Chapter 13 is your only option, you would be wise to seek a second opinion.
Many attorneys place clients in Chapter 13 because the client can pay the attorney very little money down and then the balance of the attorney’s fees are paid over the three to five year wage garnishment. The “down payment” for a Chapter 13 may be low, but the attorney’s fees for a Chapter 13 are actually much higher than Chapter 7 attorneys fees. The amount at attorney can charge for a Chapter 13 bankruptcy case is established by the bankruptcy court. Chapter 13 fees are higher because the attorney will be representing you for three to five years.
If you are behind on your house note, many attorneys will assume that Chapter 13 is your only option. When a Chapter 13 case is filed, the foreclosure on your home is stopped. However, after a Chapter 13 is filed you are immediately required to commence making your monthly mortgage payments and your wages are garnished to make up the mortgage payments you have missed. However, we have found that Chapter 7 is actually a better option to save a home.
If you are behind on your car note, many attorneys will assume that Chapter 13 is your only option. When a Chapter 13 case is filed, the repossession of your car is stopped. However, you must repay your car creditor, with interest, and you must pay a 10% commission to the Chapter 13 Trustee. We have found that Chapter 7 is a better option.
Call us today for a free initial consultation to learn more about our unique options to addressing your financial problems.