It is commonly (and incorrectly) believed that filing bankruptcy will cause you to lose all your assets. This assumption is incorrect and harmful to people who could benefit from bankruptcy. First, bankruptcy is not for people with no money or assets. Bankruptcy is for people who have a part of their lives they want to protect, such as a home, business or vehicle. Filing bankruptcy may be the best chance you have for saving your most important assets. The following examples can explain further. How Filing Bankruptcy Can Protect Your Assets Chapter 13 bankruptcy is designed to help people keep secured debts, such as a home or vehicle. That is because Chapter 13 requires debtors to complete a three to five-year repayment plan to pay back debts. After completing the repayment plan, your remaining debts are discharged and you may keep your property. For example, if you were facing foreclosure…
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There is a common misconception that bankruptcy will cause you to lose everything, including your retirement savings. First and most importantly, bankruptcy is for people who have assets they want to protect. Second, bankruptcy can protect your retirement savings from difficult financial situations. Depending on the type of retirement plan you have, the entirety of or most of your retirement savings are protected when filing for bankruptcy. In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was passed. The law protects many different types of retirement plans from creditors, such as 401(k), 401(b), defined benefit pension plans, IRAs, profit sharing plans, money purchase plans and ESOPs. If you have an ERISA-qualified plan, you may keep the entirety of your savings. ERISA, or the Employee Retirement Income Security Act, was a law passed prior to the BAPCPA. If you have a traditional or Roth IRA, you may keep a…
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There are benefits of bankruptcy that people will experience right away. Many people filing are experiencing several catastrophic financial situations, such as foreclosure, defaults on vehicle payments or other mounting debts. Fortunately, debtors may feel relief from these situations after filing. Halt foreclosure: A major immediate benefit of filing for bankruptcy is that it can temporarily stop foreclosure. Although it is best to file for bankruptcy as early as possible, you can stop a foreclosure auction at the eleventh hour. Keep your vehicle: The automatic stay issued after filing can stop creditors from repossessing your car. In some situations, even if the car was repossessed, you may be able to get it back if you file for bankruptcy quickly after the repossession. Stop wage garnishments: An automatic stay can also stop most wage garnishments. By stopping wage garnishments, those creditors will now be considered in relation to all other creditors,…
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*Credit card payments will not be accepted for bankruptcy cases, unless pre-approved by The Sader Law Firm. If you have a question about a credit card payment, please call our Office Manager at (816) 561 1818.
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