You’ve filed your petition for bankruptcy, organized a repayment plan, and are growing increasingly confident that you are ready to begin your life post-debt. In fact, for the first time in years, you are relieved to know that you have the money in your bank account to write this month’s, and future months’, repayment checks to the bankruptcy trustee. With the help of your attorney, this has all gone so smoothly, and as an afterthought, you may even wonder how he was able to get the lenders to agree to this repayment plan as well. After all, they aren’t going to be getting all of the money you had originally borrowed, and the creditors who had previously hounded you with phone calls for months definitely didn’t seem too keen on compromising at the time.
As a bankruptcy lawyer in Northern Virginia with Larson, Lilienthal and Morris: Attorneys at Law, Cal Larson explains that one of the nice things about being in the bankruptcy practice of the law is that bankruptcy courts are held in a higher regard than many of the other courts around. This means, he continues, that when you file for bankruptcy, the lower courts, such as claims court, are notified of your decision and all other actions and lawsuits against you have to cease. Many times, Larson says, a client may already be in a situation where a lender has filed a suit against him. By preparing wisely, it’s possible to file your petition before the court date and thus prevent the suit and trial from proceeding.
Additionally, because bankruptcy courts are held in high regard, your lawyer often has the luxury of telling the lenders how much they will be repaid without having to ask them if the amount seems reasonable. In reality, Larson says, it would be possible for lenders to object and file complaints with the court, but that won’t likely happen. They wouldn’t do that, he says, because they are still going to get their money, even if it may only be a fraction.
Since the practice of bankruptcy has been around for decades, both attorneys and lenders are well versed on the ongoing affairs and therefore nothing really comes as a surprise to them anymore. It’s actually much rarer, Larson explains, to have a repayment arrangement through Chapter 13 bankruptcy that is 100% planned, meaning that every creditor will get all of the money that he is owed. It’s much more common, instead, for creditors to get repaid five, ten or 25 cents for every dollar that the debtor owes.
With your bankruptcy lawyer as a mediator of sorts, both parties can often times reach a reasonable compromise: The lenders will get some of the money they are after, and you will be able to create a manageable way to pay back the debts that have long been consuming you. However, before any of this can come to fruition, you must first reach out to a bankruptcy attorney in your area. And since many lawyers now offer free consultations, you will be able to get expert advice on how to move forward with clearing your debts and how to stop lenders from calling your home without having to worry about how much the meeting will cost you.
This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.
