One of the main reasons for filing bankruptcy for many people is the automatic stay. What exactly is the automatic stay when it comes to filing for bankruptcy? The automatic stay is essentially an order from the court to all creditors to stop all further collection activity including but not limited to harassing phone calls, letters, lawsuits and most critically foreclosures.

The number one reason a debtor takes advantage of the automatic stay stipulation in the US bankruptcy law is to stop a foreclosure. With the US economy in the state of turmoil due to the housing crisis, many homeowners are struggling to make their mortgage payments and they are facing the possibility of foreclosure.

With the filing of a chapter 7 bankruptcy or a chapter 13 bankruptcy the debtor is given an automatic stay and according to the bankruptcy law this will then stop any and all foreclosure proceedings against the debtor. This can be particularly essential in attempting to save your home if you are in a position where you may have tried a loan modification or if you are proceeding with a short sale and you need a little more time to close your real estate transaction. Sometimes you may be on the very last leg of the short sale and you may be very close to closing your escrow however you have a foreclosure sale date and if you cannot close before that date your property will be foreclosed upon.

The automatic stay in a file for bankruptcy will give you that extension that you need to either short sell your home, successfully implement a loan modification agreement with your lender or better yet if it is a chapter 13 bankruptcy, you may be able to keep your home. The automatic stay remains in effect until either your bankruptcy is discharged or a reorganization plan has been implemented.

If you are facing a foreclosure and you are thinking that the automatic stay when filing for bankruptcy may help you to retain your home, you should seek the advice of a professional licensed bankruptcy attorney. Only bankruptcy attorneys know the intricacies of the US bankruptcy law and they will be able to answer all your bankruptcy questions regarding foreclosure and other issues.

To take the first step in finding a bankruptcy lawyer, you may simply fill out a free bankruptcy case evaluation online at BankruptcyIntro.com. After completing a simple two minute bankruptcy evaluation online, you will then be connected with bankruptcy attorneys in your area that will be able to give you a free bankruptcy case review.

Should I File For Bankruptcy?

Consider the questions listed below. If you answer yes to three or more of the questions, you should speak with a bankruptcy lawyer right away. We can help. For a thoughtful, caring assessment of your situation and your options and for answers to your bankruptcy questions, contact our San Francisco bankruptcy law office today.

1. Do you pay over 20 percent interest on any of your debt?

2. Have you been served with legal papers, are you being sued, or are your wages already being garnished?

3. Are you receiving harassing calls from creditors?

4. Do you routinely spend more than you earn?

5. Is it difficult for you to see a way of getting out of debt?

6. Can you only afford the minimum payment required on your credit cards?

7. Do you panic when faced with an unexpected expense, such as a car repair?

8. Do you skip payments on some bills in order to pay other bills, transfer balances, or use cash advances on one credit card?

9. Have you experienced a change of employment such as a job change, loss of employment or loss of overtime that impacts your ability to keep the status quo?

10. Do you find yourself arguing with your spouse about money, or find that you are afraid to talk to your spouse about money at all?

11. Are you thinking about filing for bankruptcy?

12. Do you buy necessary items, such as food and clothing, on credit?

13. Do you make regular payments without your balances going down?

We build relationships with our clients. Our practice is centered on providing personalized service and representation in an atmosphere and culture of care.

When good people have serious financial problems, they owe it to themselves and their families to consider bankruptcy. There is no reason not to take advantage of our free office consultation and personalized evaluation from an honest and caring bankruptcy lawyer. Visit our website at www.sfdebthelp.com. Call us at (415) 963-4004 or email us at email@jclawgroup.com.

Nobody wants to file a bankruptcy; in the end it is a very difficult decision that is normally a last resort. There are some alternatives to consider first before you take that final step.

Take the time to list your expenses on a spread sheet or piece of paper. Make a budget that prioritizes your expenses, food, utilities, and mortgage first. Then if you have a car payment that should come next, once you have all your important expenses listed, begin to list your debt.

The purpose of this is to determine how much income you have available for debt repayment, and whether you can make progress with repaying debt. If your current income does not leave room for debt repayment or leaves you with getting behind on your credit cards it is time to consider your options.

Negotiate with Creditors – This will be your first step, not all creditors will negotiate with you, and many will not negotiate with you till you are two or more months behind, you will not know till you ask so do this first. Many creditors are willing to settle for the principle with a small amount of interest, simply to recoup the money they lent you. Often creditors will settle for 2-4% interest on a 2-5 year contract. Many credit card companies will not tell you about this till you are already delinquent so depending on where your finances are at, this may or may not do you any good.

Credit Counseling services – Debt repayment programs are not the same as credit counseling services and should not be mistaken for them. Often Debt repayment programs are nothing more than a scam, they entice you to sign a contract promising to reduce your payments when in fact many creditors will not work with them. Instead research carefully, check with the Better Business Bureau to find a Counseling agency that will work with you to create a payment plan you can afford. You can also go to www.usdoj.gov/ust which keeps a state by state list of US Trustee approved credit counseling agencies that you can contact.

Doing Nothing – This may seem like an unlikely alternative but more and more people are caught between a rock and a hard place and are choosing this option. Many cannot afford the costs of the new bankruptcy laws which have tripled the cost of a bankruptcy, require counseling at your expense, and can have a lengthy waiting period. If you are in a place of choosing between paying for food, heat, or housing and paying credit cards, it is pretty obvious what you should choose.

While nobody is telling you to irresponsibly choose not to pay the bills you incurred, we live in tough times and if you have little or no income coming in, you take care of basic necessities first.

If you live simply and are not extravagant, then your chances of being sued are very small, and what the creditors are able to take from you is limited, they cannot take the roof over your head, things you need to hold a job, clothing or any of the basic necessities of life. This will affect your credit rating but no more so than a bankruptcy, and if bankruptcy is not an option because of costs then this is an option you may have to consider.

Creditors and collection agencies are very limited in what they do in terms of harassment, so be sure to read up on your laws and let them know you know your rights.

Nobody wants to be in the position of not being able to pay their bills, with so much at stake such as our reputation and credit rating most of us would rather pay our bills then let them get behind. In the end though it is not the end of the world and you do have alternatives no matter where you are at in life. Knowing your alternatives and rights is the key to dealing with this situation, and certainly if you can pay, pay what you can but be sure to feed your family and keep your home warm, then and only then should you worry about the creditors.

Having to file for bankruptcy is a scary thing sometimes. It may feel like the end of the world, and you have finally come to your last resort. Perhaps you feel that you could never again have a loan, never again regain the once amazing credit score that you had before everything went down hill, and never be able to buy anything with a credit card again.

These feelings of hopelessness are burdensome, but some weight can be lifted from your shoulders. There are possibilities of having credit cards in the future, therefore being able to build up your credit score, slowly, until it is once again in the high numbers and a secured spot on the chart.

But how is it possible to keep your credit cards once you have filed for bankruptcy? Don’t you have to list them under your debts?

Yes, you do have to list the existing balance on your credit card as a debt when you file for bankruptcy, therefore making that credit card discontinued for further use. Filing bankruptcy gets rid of all your debt, and the balance that exists on your current credit card is categorized as such, therefore giving you no choice.

However, if you have a credit card that does not have a current balance on it, you are allowed to keep that credit card because you are not indebted to that specific credit card company. You do not have to tell that specific credit card company that you have filed for bankruptcy, but they may find out some other way, like by looking at your credit report.

In that case, they may change a few things in the agreement they have with you because of your increased risk of making late payments or making no payments at all. Many credit card companies will keep your line of credit open because they want your business, but they do have the right to change things like your credit limits and interest rates because of something like bankruptcy.

Despite the fact that there is no balance on that credit card, there may be some companies that will discontinue the line of credit they allowed you anyway. Bankruptcy is a red flag to them, and because you are at higher risk, they may invalidate your credit card. However, most companies will not because they still want you to keep an open line of credit with their company.

It is not difficult to get new credit cards after you file for bankruptcy. The fact that you could not pay off your debt may determine a higher interest rate and a lower credit limit, but you still can get a credit card. But if you think about it, the whole point of filing for bankruptcy was to get out of debt and stay out, wasn’t it? Still, it is through more loans and credit cards that you rebuild your credit score after bankruptcy.

Most people file for Chapter 7 bankruptcy because of the three main reasons:

1. It is much faster then the other Chapters. With a little effort on your side, you can have the entire process over in next four to six months.

2. It is also simpler to file. No frequent visits to court are required.

3. There are no after payments. Once your bankruptcy is discharged that is it, you are debt free. (Under the 2005 bankruptcy law, not all debts can be discharged anymore so consult with your attorney before filling).

On the other hand, Chapter 7 has a catch, the court will decide whether you are allowed to file for it or not. One of the main reasons why you can be denied to file for Chapter 7 is your income. If it happens to be sufficient to payoff some of your debts (after your allowed living expenses have been counted in) then you might be forced to file under Chapter 13 bankruptcy law.

How to check if you can apply?

First thing you need to do is to calculate your average earnings in the last 6 months and compare it with average income for the state you live in. You will be allowed to file under Chapter 7 if your income happens to be lover or the same as the median income of the state you live in.

In case that your average income is higher than that, and you still want to apply for Chapter 7 bankruptcy you will have to go through one more test called the Means Test.

So what is a means test?

It is a test based on the results calculated for your allowed living expenses.

How to calculate my living expenses and what can I include in it?

It is actually quite easy to calculate it. Take all your income from one average month and deduct the following allowed expenses:

1) Utility bills, transport (gas), food, clothing. (Make sure to use IRS amounts for these or the court will not take it in to account).

2) Your secured monthly payments like child support, car loan, mortgage and tax.

After you finish with the calculation and your average disposable income per month is lover then $100, you have passed the means test and you stand a fair chance of being approved to file for bankruptcy under Chapter 7.

If on the other hand your disposable income happens to be more than that (figure most often mentioned is $166, but it can vary), you will most likely have to file under Chapter 13 of the bankruptcy law. That is unless you can provide evidence that there are some special considerations to be taken in your account.

For any figures between $100 and $166, it is best to consult with your attorney. Make sure to find an attorney that specialize in bankruptcy and credit repair and has the solid reputation.