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Avoiding Bankruptcy

Top Reasons to File for Bankruptcy Immediately

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If you plan to file for bankruptcy, it might make sense to do it promptly. Everyone’s situation is different, but there are some common reasons why people file for bankruptcy immediately. The bankruptcy attorneys at Groce & DeArmon are here to provide clarity. Here are some situations where you may benefit from filing for bankruptcy right away.  

You’re in Foreclosure

If the bank is foreclosing on your home, you can suspend foreclosure by filing for bankruptcy. As soon as you file, a ruling called the automatic stay will stop the foreclosure immediately. The bank may file a motion to try to have the stay lifted. However, even if the court lifts the stay, the foreclosure will be delayed by a month or two. 

If the foreclosure sale is about to happen, you can file for chapter 13 bankruptcy, which will allow you to work on your mortgage payments and keep your home. You can also file for chapter 7 bankruptcy before the foreclosure ends, which could discharge the mortgage debt outright.  

Related Post: Should I File Before or After Foreclosing?

Your Lender Intends to Repossess Your Car

The automatic stay also halts any efforts that your lender makes to repossess your car. In both chapter 7 and chapter 13 bankruptcy, you may be able to reclaim your vehicle if the lender recently repossessed it. Filing for chapter 13 essentially buys you time to assemble the money to make all car payments. Talk to a bankruptcy lawyer at Groce & DeArmon to determine which bankruptcy option is best for you. 

Related Post: Your Bankruptcy Options Before and After Repossession

You Received an Eviction Notice

Next, if your landlord is evicting you, don’t sit idle. Filing for bankruptcy will forestall most evictions, but not permanently. Unfortunately, if the landlord already obtained an eviction order from the court, bankruptcy can’t help you. For more information about whether bankruptcy will prevent an eviction, contact a bankruptcy attorney.  

You Got a Better Paying Job

If you recently started a higher paying job, this is a reason to file for bankruptcy without delay. To qualify for chapter 7, you must pass the means test, which examines your average income before you file. Higher-income can affect your chances of passing the test. Don’t wait to file. Consult a bankruptcy attorney at Groce & DeArmon.   

Talk to a Bankruptcy Attorney

While these are high-pressure situations, it’s best to meet with a qualified bankruptcy attorney before you file. At Groce & DeArmon, P.C., our team has an in-depth knowledge of the legal system, and we’re here to answer your questions. Contact us online or call (417) 862-3706 to set up a free consultation.  

What Happens to Vehicle Loans During Bankruptcy?

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Man signing car loan bankruptcy document

It can be difficult to decide what to do with your vehicle loan if you have filed for bankruptcy. What you can do with your loan? How easy it is to keep your car or get rid of your car? What type of bankruptcy do you want to file? These important questions can determine what will happen with your car loan. In today’s blog, bankruptcy attorneys Groce & DeArmon explain what happens to your car loan in Chapter 7 and Chapter 13 bankruptcy.

Car Loans in Chapter 13 Bankruptcy

If you are facing Chapter 13 bankruptcy, there are a few options for catching up on car loan payments. Here are a few of your options:

Reduce Principal

If you took your car loan out over two and a half years ago, you can reduce the principal of the car loan by finding the current value of the car and reducing the principal to match that value.

Reduce Interest

In many cases under Chapter 13 bankruptcy, you can reduce your car loan to a more reasonable rate by 4-6 percent.

Catch Up on Arrears

Under Chapter 13 bankruptcy, if you are behind on car loan payments you can tell your lender to accept small monthly payments to catch up, then resume making regular payments later on. This option is especially helpful for those facing repossession.

Related Post: Does Filing Bankruptcy Remove Repossession?

Car Loans in Chapter 7 Bankruptcy

If you are filing for Chapter 7 bankruptcy, here is what you can do with your car loan:

Surrender the Car

If you wish to get rid of your car, under Chapter 7 bankruptcy you can surrender your car to the bank. If you decide to give up your car you will not have to pay the remaining balance.

Retain-and-Pay

With retain-and-pay under Chapter 7 bankruptcy, your car loan will be discharged but you will be able to keep your car and pay the remaining debt without being personally liable. This means that the creditor can not come back to you for any unpaid debts and you are no longer legally required to pay the remaining debt. Once you have paid off the loan you own the car. This option is hard to come by because most lenders will demand a reaffirmation agreement instead.

Reaffirmation

Many lenders will not want you to discharge your personal obligation to a loan. In this case, they might demand a reaffirmation or a legal process where you will have to renew your commitment to paying the loan and will have personal liability.

Related Post: Will Chapter 7 Bankruptcy Stop Vehicle Repossession?

Bankruptcy Attorneys Groce & DeArmon

If you are considering Chapter 7 or Chapter 13 bankruptcy and are trying to decide what to do with your car loan, contact the trusted bankruptcy attorneys at Groce & DeArmon. With 30 years of experience, we can help you decide if bankruptcy is right for you. If you are interested in Chapter 7 or Chapter 13 bankruptcy you can start by scheduling a free consultation. Call us at 417-862-3706 or continue browsing our website to learn more.

Myths You Need to Know About Filing For Bankruptcy

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Hand drawing myth v. fact scale - bankruptcy attorney

Filing for bankruptcy can seem like a desperate decision for getting out of debt that leaves many people feeling embarrassed. Because of this, there are many myths associated with filing for bankruptcy that are simply wrong. In today’s blog, bankruptcy attorneys Groce & DeArmon clear up some of this uncertainty by debunking myths associated with filing for bankruptcy.

Related post: How to File for Chapter 13 Bankruptcy

Myth 1: It Will Ruin Your Credit Score Forever

One of the myths associated with bankruptcy is that it will destroy your credit for seven to 10 years. In reality, most people’s credit scores rebound within six months after bankruptcy is finalized. And in some cases, credit scores improve greatly after bankruptcy. Doing the right things to restore your credit like getting a secured credit card can help you get on the right track to a fresh financial start.

Myth 2: You Will Lose Everything

Many people believe that you will lose everything if you file for bankruptcy, including your car, your house, and whatever other assets you own. This is simply not true! Most Chapter 7 bankruptcy cases offer exemptions that allow you to keep your belongings up to a certain value.

Myth 3: Paying Off Debts Is a Better Option

Filing for bankruptcy isn’t necessarily a bad idea. In fact, if your debts are more than 50% of your annual income and you are not likely to pay them off in the next five years, bankruptcy is probably your best option. The immediate and long-term relief that you can achieve through bankruptcy oftentimes outweigh the downsides.

Myth 4: All Of Your Debts Will Be Forgiven

While it is true that many of your debts can be discharged or forgiven in Chapter 7 or Chapter 13 bankruptcy, it is important to remember that there are some debts that are less likely to be discharged. In general, this includes debts that you are personally responsible for like taxes, child support, student loans, and debt from fraudulent cases.

Myth 5: Filing For Bankruptcy Makes You a Failure

Some people believe that filing for bankruptcy is an embarrassing personal failure. In reality, many people file for bankruptcy as a result of situations out of their control, like medical bills or stagnant wages. Even if you are filing for bankruptcy because of mismanaged finances, it is important to remember that bankruptcy is a responsible step in the right direction to fix your financial situation.

Related Post: Filing for Bankruptcy Myths, Part 2

Bankruptcy Resources at Groce & DeArmon

If you find yourself in a difficult financial situation and want to learn more about how bankruptcy can help you, bankruptcy attorneys Groce & DeArmon can help clear up some of the myths you have heard about bankruptcy. With 30 years of experience in Chapter 7 and Chapter 13 bankruptcy cases in southwest Missouri, we can help you find a fresh start. Start by scheduling a free consultation. You can call us at 417-862-3706 or visit us online to learn more.

What Not to Do Before Filing for Bankruptcy

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Bankruptcy resources - the do's and don'ts

The process of filing for bankruptcy can be confusing and stress inducing. Because of this, many people misunderstand and mishandle the process, resulting in irrational or even unlawful choices that can result in anything from dismissal to criminal charges. In today’s blog, bankruptcy attorneys Groce & DeArmon explain what not to do before filing for bankruptcy to keep you informed and to help protect you from getting in trouble.

Don’t Lie About Assets

You are required by law to provide complete and accurate information about your financial situation. Knowingly misrepresenting your information is a criminal offense that can be punishable by fines or imprisonment. It is also important to include all pertinent information, because the bankruptcy court may dismiss your case if it is not complete.

Don’t Run Up Your Credit Card Debt

Credit used within 90 days of filing for bankruptcy usually will not be included in your bankruptcy debts. Furthermore, if a creditor has reason to believe that you ran up your cards before filing, it will challenge your case, and you may end up having to pay your credit card debt in full.

Don’t Take On New Debt

Just like running up credit card debt, it is extremely irresponsible to take on new debt before you file for bankruptcy. This means no new car loans, no new student loans, and no payday loans. The responsible thing to do is stop all use of credit as soon as you decide on bankruptcy.

Don’t Pay Off Your Creditors

Paying off a creditor after you have decided to go bankrupt is not allowed. If you do this, it may be determined that you are favoring one creditor over another and could hinder your chances at completing bankruptcy.

Don’t Drain Your Retirement

Draining your 401(k) or retirement accounts to stash away money or use it to pay off creditors is risky business. Not only is it not allowed to pay off creditors before bankruptcy, but money in retirement accounts are exempt from bankruptcy and cannot be taken by creditors.

Don’t Transfer Assets to Family or Friends

Giving your possessions or assets away to friends or family with the intention of getting it back later is dishonest and can result in the denial of discharges. If you do sell property prior to bankruptcy in order to pay living expenses, this is allowed but must be supported with an explanation.

Do Consult a Professional Bankruptcy Attorney

Bankruptcy law is very complicated and easy to misinterpret, and there are many moving parts that can go undetected. This is why it is extremely important to hire and consult with a trusted and experienced bankruptcy attorney who can help you through the process. At Groce & DeArmon, our bankruptcy lawyers have over 30 years of experience to help determine if bankruptcy is right for you and help complete your case. If you are interested in Chapter 7 or Chapter 13 bankruptcy, you can start by scheduling a free consultation. Call us at 417-862-3706 or visit us online to learn more.

Related Post: When to Seek Legal Aid for Bankruptcy

Groce & DeArmon, P.C.: Advice for Avoiding Bankruptcy

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Young couple arguing over finances

Bankruptcy is a good way for people in serious debt to reclaim their solvency and rebuild their financial stability, but it doesn’t come without significant costs. If you feel that you are heading towards bankruptcy, Groce & DeArmon, P.C. recommend that you seek to avoid bankruptcy if at all possible. In today’s blog post, the bankruptcy lawyers at Groce & DeArmon, P.C. will take a look at some ways that you or your business can work to avoid a bankruptcy filing.

Begin Selling Assets

The first thing that you can do to avoid bankruptcy, especially if you are looking at filing as an individual, is to begin selling your assets. This might not seem like a desirable solution, but you are likely to be forced to do so if you file for bankruptcy, particularly with chapter 7 bankruptcy. If you are facing financial difficulties and looking at bankruptcy, any bankruptcy attorney will tell you to look at selling non-essential assets. These assets may include a second car, vacation property, or even downsizing to a smaller home.

Nobody wants to start selling off their assets, but if you are in a dire situation it might be the best solution for protecting what really matters.

Reach Out To Your Creditors

It may feel like the last thing you want to do, but if you are in financial distress and think you might need to contact a bankruptcy lawyer, it can be a good idea to reach out to your creditors and let them know about your situation. Your creditors are looking for the money that is owed to them, but they also know that a bankruptcy proceeding can be lengthy. Creditors might prefer to receive a portion of the debt quickly, rather than wait for the completion of a bankruptcy. So, it may be beneficial to simply ask them to decrease your monthly payment or lower your interest rate.

Stop All Unnecessary Spending

If you are in debt and struggling financially, yet you are still spending money on non-essential things, you need to stop immediately. Responsible spending is the most important step we can recommend at Groce & DeArmon. To avoid bankruptcy, you will need to devote as much of the money you are bringing in on a week-to-week basis towards your debts. You can’t do that if you are spending it on things like entertainment or eating out.

So, pause your Netflix subscription and get rid of your unlimited data cell phone plan. During this process, you will need to spend as little money as possible to avoid the office of a bankruptcy lawyer.   

Contact The Bankruptcy Lawyers At Groce & DeArmon, P.C.

If you have taken the recommended steps and you are still in need of a bankruptcy lawyer, you will want to get in touch with Groce & DeArmon. We have the best bankruptcy lawyers in the area, and we want to help you get back on your feet. For more information, give us a call at (417) 862-3706 or contact us online for more information today.

Pros and Cons of Filing for Chapter 13 Bankruptcy

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Chapter 13 Bankruptcy: Pros and Cons

Pros and cons board

Last week, the Groce & DeArmon, P.C. blog looked at the pros and cons of Chapter 7 bankruptcy, how filing under Chapter 7 affects your credit score, and what the recovery time would look like. While Chapter 7 is the most common chapter of bankruptcy, Chapter 13 bankruptcy arguably presents more benefits because it doesn’t require the loss of property.

In today’s post, Groce & DeArmon, P.C. will take a look at Chapter 13 bankruptcy and break down the pros and cons of this chapter.

Pro: You Don’t Lose Property Under Chapter 13 Bankruptcy

This is the most obvious benefit of utilizing Chapter 13 over Chapter 7. While Chapter 7 will ultimately end with a discharge, it also does so at a higher cost than Chapter 13 when considering personal property. Chapter 13 allows debtors to attempt to pay off their debt before forcing them to foreclose or have their belongings repossessed.

Con: It Ties Up All Of Your Extra Cash

This might seem like a petty thing to be concerned about, but it is something to consider nonetheless. When you file under Chapter 13, you have to make your payments out of your disposable income, which is the money you have left over after things like food, shelter, and water. During your repayment period, the rest of the money that you earn from your paycheck will be put towards your debt.

Pro: Flexibility With Payments

Unlike other chapters of bankruptcy, those who file under Chapter 13 will be given a longer leash with payments. You will have more time to repay your debts, which means that the immediate financial burden when paying through Chapter 13 bankruptcy will be less than with Chapter 7 or other forms of bankruptcy.

Con: You Will Be Paying Off Your Debts Longer

While you get flexibility with the payment plan strategy implemented through Chapter 13 bankruptcy, you will also be paying off your debts much longer than you would under Chapter 7. Under Chapter 13, it can take up to five years to pay off your debt while it takes as little as three months to pay that debt off under Chapter 7. While that is preferable to losing property, you must consider the length of time you will spend under this chapter and whether having very little disposable income for a long period of time is realistic for you and your family.

Contact Groce & DeArmon, P.C. For More Information

Deciding which chapter to file when looking at bankruptcy is a big decision. At Groce & DeArmon, we want to help make that decision easier on you. For more information, give us a call at (417) 862-3706 or contact us online today.

Pros and Cons of Filing for Chapter 7 Bankruptcy

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Chapter 7 Bankruptcy: Pros and Cons

Man holding up a plus and minus sign

Bankruptcy isn’t a process that anybody would want to willingly go through, but it is also a process that can help people who are in debt with nowhere else to go. However, declaring bankruptcy is a more complicated issue than some would like to think. Deciding if you need to file for bankruptcy is just the first step.

The more pressing issue when it comes to bankruptcy filings is what chapter needs to be filed. There are several different chapters, but the two most common are Chapter 7 bankruptcy and Chapter 13 bankruptcy. In today’s post, Groce & DeArmon, P.C. will look at the pros and cons of filing for Chapter 7 bankruptcy.

Pro: Chapter 7 Bankruptcy Moves Quickly

Unlike some other chapters of bankruptcy, Chapter 7 bankruptcy moves forward more quickly. In fact, you could be done in just three months from the date of your original filing. This filing will stay on your record for some time, but the process will typically be quick and painless.

Con: Chapter 7 Remains On Your Credit Report

While Chapter 7 moves very quickly, the aftermath is less quick. Arguably the biggest con to utilizing Chapter 7 bankruptcy is the damage that it will do to your credit report. Not only will it harm your credit, but it can remain on your credit report for up to 10 years.

Pro: Some Property Is Exempt

What makes Chapter 7 different from the other chapters is that it includes losing property to pay off debt. However, most states include exemptions that will allow you to keep many of your belongings, including the things that you need most. This depends on the severity of your debt, but in many cases, you can go through the process without foreclosure or repossession.

Con: You Will Lose Property

While you will likely have many of your most important belongings made exempt through state law, Chapter 7 will always result in lost property. And while it is likely that you will keep most or many of the items that you need, a more serious debt can lead to foreclosure and repossession. Even if that doesn’t happen, you will likely be forced to part ways with your non-essentials, such as memorabilia.  

Pro: You Will Be Able To Obtain New Credit

While your credit record won’t be squeaky clean for several years after filing for Chapter 7 bankruptcy, you will be able to obtain new lines of credit within 1-3 years of your original filing. There are even lenders who are willing to take on “riskier clients,” such as those who have gone through a bankruptcy filing.

Con: You Will Lose All Of Your Current Credit

The reason why you have to wait 1-3 years to obtain credit is because you will lose all of your current credit lines. However, this is also done in large part for your own benefit, and you will be able to use credit in the future.

Contact Groce & DeArmon, P.C. For More Information

If you are looking at filing for bankruptcy, you will want to make sure you file for the right chapter. For more information on Chapter 7 bankruptcy and if it is right for you, give Groce & DeArmon, P.C. a call at (417) 862-3706 or contact us online for more information.

Here Is Why Legal Aid Is Important For Debtors

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Why Is Legal Aid Important For Debtors?

If you are currently in debt and struggling to pay off your debt, it is important for you to know that there are people who would like to help you get out of debt. Debt is a lingering weight on the shoulders of many Americans, and while it may seem impossible for you to get out from under that weight, there are people who can help you do just that.

However, for those people to begin helping, you have to seek out legal aid first. In today’s blog post, Groce & DeArmon, P.C. will look at why legal representation and aid is important for people who are in debt and how they can help you get out of debt.

Recognizing The Problem

The first step in getting rid of your debt is realizing the severity of your dilemma. Even as you are working hard to get out of debt, you might just not have the means to do so. However, the longer you wait on seeking consultation, the bigger the hole will be when you finally do. Even if you aren’t sure if you need legal aid for your debt problem, it’s important to recognize the potential problem and at least get an opinion from a debt lawyer like Groce & DeArmon.

An option from a legal professional will help you see through the weeds and understand how dire your situation is. It may very well not be dire enough for you to need legal aid, but if it is, it is important to get out in front of the problem.

Seeking Help

You might consult with an attorney and be told that your situation doesn’t merit legal aid. However, if it does require some sort of legal help, it’s important to get that legal help as soon as possible. When it comes to things like repossession and foreclosure, you might not have an abundance of time as you sort out those issues.

Again, getting out ahead of these things is important and can be the difference between you keeping your home or vehicle or losing them. Legal counsel can play a major role in that process.

How Does Legal Aid Help?

The experts at Groce & DeArmon, P.C. specialize in debt, repossession, and foreclosure cases, so we know firsthand how important legal counsel can be with these issues. If you are facing debt and are looking at having your assets repossessed or having your home foreclosed on, legal aid may be able to prevent that.

If you file for Chapter 13 or 7 bankruptcy, an automatic stay will be put on all debt-related actions. In simpler terms, it will ensure that your home and vehicles aren’t repossessed or foreclosed on until the bankruptcy process is complete.

Contact Groce & DeArmon, P.C. For A Consultation

Debt, repossession, and foreclosure are stressful and complicated. At Groce & DeArmon, we want to help make that process easier for you, so you can find the best financial solution possible. Give us a call today at (417) 862-3706 or contact us online for more information.

Here Are Four Common Situations That Require Legal Assistance

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Four Common Situations That Require Legal Assistance

Lawyer consulting with his client

Nobody wants to invest in professional legal aid, but there are some cases where it is an absolute necessity. When it comes to finding proper legal representation, it’s important for you to know what you need representation for and what you can handle by yourself. There are any number of legal dealings that you might need an attorney for, but in today’s blog post, Groce & DeArmon, P.C. will look at four common situations that require legal aid.

We specialize in bankruptcy protection, so today we look at five common situations where you might need legal representation for financial troubles.

  1. Chapter 7 Bankruptcy

Chapter 7 bankruptcy is the most common form of bankruptcy in the United States. Often referred to as straight bankruptcy or liquidation bankruptcy, Chapter 7 is a filing that liquidates your assets in order to pay off your debt. This is done through a trustee who oversees your case and helps to sell your assets and distribute the money to creditors to alleviate your debt.

While this is a very common form of bankruptcy, it can still be very complicated. You will have to gather all of your financial records and make sure that you are in good legal standing. The best way to make sure no mistakes are made and that you are put in the best financial position possible is by seeking legal aid.

  1. Chapter 13 Bankruptcy

If Chapter 7 bankruptcy is the most common form of bankruptcy, Chapter 13 is not far behind. Under a Chapter 13 filing, debtors are given a monthly payment plan that will help them manage their debts and get them paid off over a 3-5 year period. After that period of time, the debtor is usually given a discharge of debt, seeing that they faithfully made their payments.

While Chapter 13 requires more work over a longer period of time for the debtor, it also has a more complicated and rigid entrance process. Legal counsel can help make sure that you are filing for the right chapter and are legally covered.

  1. Foreclosure

Foreclosure is among the most stressful situations that any person will face during their lifetime. Nobody wants to lose their home, and although many homeowners facing foreclosure are hardworking Americans, lenders are not partial. If foreclosure is a threat, it’s important to seek out legal aid immediately to see what you can do to stay in your home or how to make the process easier on your finances.

  1. Repossession

Repossession, especially of a car or vehicle, is a more present danger to your way of life because it will affect your ability to get to and from work on a daily basis. If you have a family, it can pose an even bigger problem as you have to get your kids to and from school and activities.

Repossession happens when you are habitually struggling to make your payments, so if you are falling behind, be sure to get in contact with an attorney immediately. Legal aid can help you understand the severity of your situation and provide solutions.

Contact Groce & DeArmon, P.C. For Legal Aid Today

At Groce & DeArmon, we specialize in legal aid for bankruptcy, foreclosure, and repossession situations. We want to help find you the best possible solution for your circumstance. Give us a call today at (417) 862-3706 or contact us online for more information.

Bankruptcy Attorney: What Happens If I am Sued During My Bankruptcy?

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Bankruptcy Attorney defending client in court.

Despite what many people think, a Chapter 7 or 13 bankruptcy is a pretty straightforward process once you have selected a bankruptcy attorney. Although the process may be stressful, with the right representation you will emerge on the other side with a new lease on your financial life. Sometimes the process can be complicated, however, if you are sued. Sometimes a creditor will choose to sue the debtor in bankruptcy court. Luckily, the first step you should take is choosing a bankruptcy attorney to not only help you file but represent your financial interests. Today, Groce & DeArmon, P.C. will discuss what happens when you are sued by a creditor during your bankruptcy process.

Situations in Which Creditors May Sue

Sometimes a creditor will file a lawsuit because they don’t understand how bankruptcy works. This happens more often than you would guess. However, the automatic stay that comes with filing bankruptcy is designed to prevent creditors from taking any collection activities outside of the bankruptcy court.

Another situation that can occur legally is an ‘adversary proceeding’. An adversary proceeding will have a plaintiff and defendant, like a normal court proceeding. In general, the debtor will be the defendant while the creditor will file a complaint that explains why they are entitled to relief from the bankruptcy court. In other words, they will attempt to prevent the debt that you owe from being discharged in bankruptcy.

What to Do if You Are Sued

First, remember not to panic. Just because you are being sued does not mean that you have done anything wrong. Anyone who wants to sue only needs to pay the clerk’s filing fee. Secondly, you have a bankruptcy attorney representing you for a reason. Choosing an experienced team like Groce & DeArmon, P.C. will greatly increase the chances that the suit will be dismissed or overturned.

If a lawsuit is filed while you are filing bankruptcy, your attorney will want to file an ‘Answer’ or a ‘Motion to Dismiss’. After an Answer is filed, the next step is to appear in court for a status conference in which the judge will get a general understanding of the case and either dismiss or set deadlines and future hearings.  It is during these periods that choosing an experienced bankruptcy attorney from Groce & DeArmon, P.C. can make all the difference in your success.

 

Contact Groce & DeArmon, P.C. for Your Representation

Ensuring that you are represented by an experienced divorce attorney is THE most important step in the bankruptcy process. To schedule a free consultation with Groce & DeArmon, P.C., contact us today!