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Bankruptcy

Understanding Bankruptcy

Bankruptcy can provide relief to individuals overwhelmed by debt, offering a fresh start by eliminating certain obligations. The two most common types are Chapter 7 and Chapter 13 bankruptcy, each suited to different financial situations. The right option depends on your income, assets, and financial goals.


What Bankruptcy Can Do

Stop Creditor Harassment and Collection Actions

When you file for bankruptcy, the court issues an "automatic stay," temporarily halting most collection efforts, including creditor calls, wage garnishments, and lawsuits. However, some actions, such as collecting child support or pursuing criminal cases, may continue.

Delay Foreclosure, Repossession, or Eviction

The automatic stay can temporarily halt foreclosures, repossessions, and evictions while proceedings are pending. However, the protection may not be permanent:

· Evictions: If your landlord already has a court judgment, bankruptcy typically won’t prevent the eviction.

· Foreclosures and Repossessions: Chapter 7 bankruptcy may delay these actions, but if payments can’t be brought current, you could lose the property. Chapter 13 allows repayment plans to catch up on missed payments, potentially helping you keep your home or car.

Eliminate Certain Unsecured Debts

Bankruptcy can discharge most unsecured debts, such as credit card balances, medical bills, personal loans, and overdue utilities. However, student loans and other specific debts are generally excluded.

How Long Does It Take?

· Chapter 7: Typically completed within three to four months.

· Chapter 13: Involves a three- to five-year repayment plan, after which remaining qualifying debts are discharged.

Bankruptcy vs. Debt Settlement

Debt settlement is an alternative to bankruptcy for reducing or eliminating debt without paying the full amount owed. This process involves negotiating with creditors to accept a reduced payment. Funds are saved in an FDIC-insured account and used to pay off settlements. While the monthly payments are often lower than minimum payments, this option does not provide the same legal protections as bankruptcy.

At Franklin Legal Group, we can help you understand your options and find the best path forward for your financial situation.

This is an attorney advertisement and this website is for informational purposes only.

The information contained on this website is not to be construed as legal advice. It is not intended to solicit or form an attorney-client relationship. Debt settlement, debt negotiation or debt resolution programs (the “Program”) are not an offer or promise to lend money, and neither they nor Franklin Legal Group PC. (“FLG”) assume or pay any consumer debt or make monthly payments. FLG is not affiliated with any lending institution, bank, collection agency, or collection law firm. Individual Program results may vary and are based on but not limited to the ability of clients to save funds and successfully complete their Program terms and conditions, the amount and type of debts and creditors, the history of accounts, and the financial standing of clients. Past performances of Clients do not guarantee future results for others and FLG does not guarantee that debts enrolled in the Program will be settled at a specific percentage or amount, or that you will be debt-free within a specific time period. Not all Clients complete our Program for a variety of reasons including but not limited to an inability to save sufficient funds. The Program may have an adverse impact on Clients credit. Our services may not be available in all states please check with FLG for state eligibility. Please contact a tax professional to discuss the potential tax consequences of settling debt. This website and the content of this website have been reviewed and approved by Thomas A. Moore the managing partner of FLG whose mailing address is 3186 Vista Way, suite 303, Oceanside CA 92056. Copyright Franklin Legal Group PC. All rights reserved. Unauthorized use of the FLC website includes but is not limited to content copying, duplicating, or replicating is strictly prohibited. Furthermore, the use of this website is subject to the Terms of Use.

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