How Bankruptcy has Helped People Like You Stop the Collection Calls and Letters!
The following true accounts of Burton Law Offices clients are examples of typical bankruptcy filers. There are many more like them and many more, such as entertainers and other public figures, whose stories you may know from the media.
A 1980s study found that “… People who filed for bankruptcy were genuinely in over their heads … They had accumulated debt they couldn’t repay because they had lost their jobs or had some other life event that robbed them of their ability to earn a decent paycheck.” – From Consumers Clamoring for a Leader, The New York Times, 10 August 2010
Gail and Carl: Foreclosure
Gail and Carl**, a married couple with two children, were facing foreclosure in five business days.
Burton Law Offices clients have found relief from their financial nightmares.
Carl, the primary breadwinner, had lost his job and been unemployed for eleven months. He had found another job, was back to work for almost the same amount of money for a period of about one month, but by then the bank was ready to foreclose on their home of four years.
The bank had turned the couple down for a loan modification because Carl was not working. Now that the sale was imminent, they could not get the foreclosure department to stop the foreclosure sale.
Their bankruptcy case was filed, immediately halting the foreclosure sale. Gail and Carl began making payments again, which the bank had to accept or violate the bankruptcy laws. After a five-year payment plan was established on the eleven months of back payments, the couple’s mortgage loan was successfully modified to a lower, more affordable payment.
Jennifer: Wage Garnishment
Jennifer, a single parent with one child, was behind over a year on credit card debt of nearly $100,000. She earned $60,000 annually as an administrative assistant. Under California law, a judgment creditor is allowed to garnish twenty-five percent of her pre-tax gross, so when her wages were garnished, she lost $1,250 monthly.
Jennifer was stunned. How could a credit card she could not pay turn into a judgment under which her wages could be garnished? In California, and many other states in the country where garnishments are permitted, bankruptcies to stop wage garnishments are quite common.
Jennifer filed for bankruptcy, stopping the garnishment. Bankruptcy eliminated the judgment, as well as all of the other credit card debt. Jennifer kept her car and did not lose her job because of the wage garnishment attempt or the bankruptcy.
Sarah and Tom: Back Income Taxes
Sarah and Tom** had two children, were high earners, homeowners and owed in excess of $800,000 in income taxes, all of which was more than three years old. They had tax liens on their real estate and modest pensions. They were in a payment plan with the IRS that left very little discretionary income to make needed home repairs. At the rate they were going, it would take them 86 months to pay off the debt.
Sarah and Tom filed Chapter 7 bankruptcy and discharged all of the income taxes more than three years old. The liens were abated down to the value of the pensions. The couple then entered into a much more manageable payment plan of the tax liens secured by the modest pensions and paid off the small amount of tax remaining due.
Scott: Small Business Eviction
Scott***, a small businessman with a struggling specialty fast food restaurant, had fallen behind in rent payments. Then he was fortunate enough to receive free publicity for his restaurant on the Food Channel. He experienced a 180-degree turnaround in business almost overnight.
Nonetheless, Scott’s landlord began eviction proceedings for months and months of back rent. The solution: put the business into chapter 13 bankruptcy, stopping the eviction process in its very beginning and setting up a long-term payment plan for the back rent. The restaurant was saved, the back rent paid and now Scott is looking to expand and start up a second location.
The Bottom Line
Bankruptcy was the right choice for these hard-working people, saving them from dire circumstances that were only going to get worse. To find out if bankruptcy is the right choice for you – or if you have other options – call Burton Law Offices today. The initial consultation is free.
**Not their real names.
***Not his real name.