12 Reasons to File Bankruptcy Part II of II

Part II of Twelve common reasons people file for Bankruptcy.

6. Stop Harassing Phone Calls From Creditors
Some creditors try to harass debtors or try and intimidate them until they pay their debts. Many times creditors will relentlessly call you at home or at your job to try to get you to pay your debt. A Bankruptcy filing will immediately stop your creditors, and stop their harassing phone calls and other collection actions. Creditors may only contact the attorney representing the debtor and there may be a claim against that creditor if they do contact the debtor themselves after the filing of a Bankruptcy.

7. Restore or Prevent Your Utilities From Being Shut Off.

If your home is in risk of foreclosure then your utilities such as electric and heat may also be in risk of being terminated. Filing bankruptcy can prevent the utility company from leaving you in the dark and without heat.

8. Provide Help For Massive Amounts Of Student Loan Debt.
Even though student debt will not be eliminated in most cases, Bankruptcy can consolidate your student loan debt into a payment plan. This consolidation will allow a debtor to make monthly payments through a Chapter 13 plan, that is within the financial ability of the debtor.

9. Stop a Wage Garnishment.

A Chapter 7 case will immediately stop a wage garnishment. A wage garnishment basically takes away 10% of your weekly paycheck. After the wage garnishment eats up your paycheck, then you most likely will not have enough of your paycheck left to pay your rent, buy food, and support your kids. By filing for a Chapter 7 you will once again be able to support yourself and your family.

10. Challenge Certain Claims of Fraudulent Creditors or Padded Debts.

A bankruptcy will allow you to challenge these claims from creditors who are trying to collect more money from you than you really owe. Many creditors charge you so much interest, late fees, and attorney fees that they try to collect twice as much from you as you borrowed.

11. You are recovering from a bad divorce.

Divorce is a major reason why many people file for bankruptcy. Child support and alimony payments can take away most or all of a spouse’s income, leaving them with no way to support themselves.

12. You are trying to deal with a lawsuit that has been filed against you.

Many people file Bankruptcy to stop a lawsuit that has been filed against them. Bankruptcy stops any litigation that has been filed against you. Bankruptcy stops credit card lawsuits, car accident cases, and any other small business related lawsuits.

http://ezinearticles.com/?Top-Ten-Reasons-People-File-for-Bankruptcy&id=15274

http://newjerseybankruptcycenter.com/wordpress/2009/01/05/top-twelve-reasons-people-file-for-bankruptcy/

The author, Ben W. Koyl, is an attorney located in Chicago, IL. He is the principal of the Law Office of Ben W. Koyl, P.C. with offices located in the Chicago Loop, Beverly Woods / Blue Island, and Joliet, IL. The firm's website is http://www.chicagobklaw.com.

12 Reasons to File for Bankruptcy, Part I of II

Once a person is educated on what Bankruptcy is and what it can do, the next thing they must decide is whether they have a valid reason to file for bankruptcy in which it will help them. Although Bankruptcy is a beneficial tool people must remember that it does have some negative repercussions that must be contemplated. Bankruptcy can affect credit, may create issues with keeping bank accounts and credit cards, can cause the loss of valuable possessions, and makes it difficult to get on with necessities of life such as buying or renting a home or car, getting insurance or finding a job. Financial advisors may view bankruptcy as a desperate last resort that should only be carried out with the counsel of an experienced bankruptcy attorney like myself, and only when budgeting, credit counseling or other efforts have failed.

Why do people file for Bankruptcy?

There are many reasons why people may find it beneficial, if not necessary, to file for Bankruptcy. Here is a list of twelve common reasons:

1. Eliminate the Legal Obligation to Pay Most of Your Debts.

As was discussed in a prior blog, the goal of bankruptcy is to discharge debt and give the debtor a fresh start. This can be done through Chapter 7, liquidation, or Chapter 13, reorganization.

2. Stop the Foreclosure on Your House and Allow You to Effectively Make Payments to Catch up on Missed Payments of Your Mortgage.

If your home is in a foreclosure, then a Chapter 13 will stop it if is filed before the sheriff’s sale. However, a bankruptcy does not eliminate your mortgages that are filed on your home. A Bankruptcy will structure a repayment plan to enable you to repay the amount that you are behind on your mortgage over a three to five year period.

3. Prevent Your Car or Other Property From Being Repossessed.

Bankruptcy can save property such as a car from being sold even if it has already been repossessed. However, your bankruptcy must be filed before the car or other property is sold at the auction. Again, money owed will be consolidated into your Chapter 13 plan. After you file, you will no longer pay the bank or the finance company, instead you will make your monthly payments to the bankruptcy trustee who in turn will pay the finance company your missed payments over a three to five year period.

4. Reduce or Even Wipe Out High Medical Bills.

A Chapter 7 Bankruptcy can wipe out your outrageous medical bills that simply won’t go away.

5. Recent Loss of a Job.
Many people fall behind in bills and seek to file bankruptcy due to the loss of a job or some means of income. Many times the loss of a job is combined with the fact the debtor is also incurring high medical bills. The loss of employment is also intertwined with a family also incurring high medical bills.

If any of the first five reasons to file Bankruptcy fit your situation please contact Ben W. Koyl at Our Website. Check in to our next blog for seven more common reasons people file for bankruptcy.


The author, Ben W. Koyl, is an attorney located in Chicago, IL. He is the principal of the Law Office of Ben W. Koyl, P.C. with offices located in the Chicago Loop, Beverly Woods / Blue Island, and Joliet, IL. The firm's website is http://www.chicagobklaw.com.

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Chapter 7 and Chapter 13, the Basics

Chapter 7 may be filed by an individual or a business and is considered liquidation because some or all of the debtor’s property may be sold (liquidated) in order to pay off some of their debt. However, in Florida and other states, some property, known as exempt property, is protected and cannot be sold in order to pay money owed by the debtor. In return for filing Chapter 7 some or all of the debtor’s unsecured debts (debt with no collateral attached) will be discharged.  Secured debts on the other hand are usually not dischargeable in Chapter 7 Bankruptcy. There are several choices of what to do for money owed on a secured debt. The debtor can either allow that property to be repossessed by the creditor, to continue payments on that property by reaffirming that debt, or redeem the property by paying the creditor a sum equal to the replacement value of that property. 

Not everyone is entitled to file for Chapter 7 Bankruptcy because certain criteria must be met. The debtor’s income cannot be over a certain amount, and if it is, the debtor must pass what is known as "means test." Additionally, the court may dismiss the bankruptcy action if the debtor has filed a previous bankruptcy within a certain period of time or if the court believes the debtor is attempting to cheat their creditors. 

Chapter 13 Bankruptcy

Chapter 13 is a type of bankruptcy referred to as reorganization because the debtor keeps all of their property but their debts are reorganized so that they may make monthly payments over of a time period of usually three to five years.  Many times Chapter 13 is favored over Chapter 7 because it allows the debtor to save their homes from foreclosure by providing the option for the debtor to make up for those payments in their repayment plan. In order to file Chapter 13 Bankruptcy the debtor must have a reliable source of income that can be used to repay debts over a period of three to five years. The payments are determined by how much the debtor earns, how much is owed, and how much unsecured debt may have been paid. 


The author, Ben W. Koyl, is an attorney located in Chicago, IL. He is the principal of the Law Office of Ben W. Koyl, P.C. with offices located in the Chicago Loop, Beverly Woods / Blue Island, and Joliet, IL. The firm's website is http://www.chicagobklaw.com.

Insolvency Can Happen to Anyone and Bankruptcy Can Help

The very word often brings an almost dirty connotation to the minds of many people. People with little knowledge on the topic of bankruptcy often have misplaced or incorrect feelings and beliefs on what bankruptcy is and what it actually does. Before researching and learning about bankruptcy I was one of those people who had misplaced beliefs. I thought of bankruptcy as if it were in the game Monopoly. I believed it was just something that happened to someone when they lost all of their money, were poor, and were not productive members of society. I could not have been more wrong. Not only have I learned that there are many types of bankruptcy, but I have learned that it affects people of all walks of life and financial status.

So what does bankruptcy basically do?

One of the most important things about bankruptcy many people do not know is that it can be an effective tool to discharge one’s debt and protect assets such as real property. Bankruptcy allows people in over their heads to improve their financial condition by either discharging unsecured debts or through the creation of a payment plan which suits the individual debtor’s ability to pay while still being able to live.

There are several types of bankruptcies used for various situations.

“Chapter 7 Bankruptcy involves the liquidation of an individual or business’s assets and is the simplest and fastest version available. Chapter 9 Bankruptcy is known as municipal bankruptcy used to resolve municipal debt. Chapter 11 Bankruptcy is known as reorganization or rehabilitation bankruptcy primarily used by business debtors which liquidate some functions and assets while a business continues to maintain their day to day operations relatively undisturbed. Chapter 12 Bankruptcy is rare and is used for rehabilitation of fishermen or farmers that have lost a portion of their capital due to bad catch or harvest, among other reasons.Chapter 13 Bankruptcy is a rehabilitation bankruptcy that comes with a payment plan for individuals with a regular source of revenue or know someone that is willing to pay the creditors in installments while a person’s finances is being restored. Chapter 15 Bankruptcy is known as ancillary bankruptcy and is used primarily in international situations to enable foreign investors and debtors to clear debts that they cannot pay and cannot be held liable in the issuing country.”

The author, Ben W. Koyl, is an attorney located in Chicago, IL. He is the principal of the Law Office of Ben W. Koyl, P.C. with offices located in the Chicago Loop, Beverly Woods / Blue Island, and Joliet, IL. The firm's website is http://www.chicagobklaw.com.