St. Louis Bankruptcy Lawyers Blog

A St. Louis bankruptcy will stop your car creditor from trying to repossess your automobile. Once the bankruptcy petition is filed with the court, an experienced St. Louis bankruptcy attorney can contact the creditor and let them know that they must put an end to their efforts to repo the car.

Or in the alternative, if your car has already been repossessed, there is still a chance to get your automobile back to you. The creditor is required by Missouri state law to hold a repossessed car for at least ten (10) days after they regain possession before they sell it to someone else. If in fact a St. Louis bankruptcy is filed within that period of time, then the creditor must give the car back.

Once the car is back in your possession, the usual route is a St. Louis Chapter 13. This is a repayment plan in which certain debts are paid back over a period of three (3) to five (5) years. Included in this repayment plan is your car loan (using an interest rate of 4.75% as of July 2013), any tax debt you might have, back child support, or mortgage arrearage (i.e. the amount you have fallen behind on your home loan).

When you file a St. Louis bankruptcy, all creditor activity comes to a halt. This would include things like a wage garnishment, bank levy, lawsuit, collection on debts, car repossessions, and also a St. Louis foreclosure.

The reason why these things come to a halt is because once the bankruptcy petition is filed, the court orders that an “Automatic Stay” go into effect. The automatic stay is a fancy way of saying that the creditors must put a stop on all their efforts to collect money, or demand payment, or take any action that might deprive you of your assets (like your home).

The primary tool that an experienced St. Louis bankruptcy attorney uses in such a situation is a Chapter 13. This is described as a repayment plan over the course of three (3) to five (5) years. During this time, certain debts are paid back. First and foremost would be the amount that you have fallen behind on your mortgage loan.

A creditor may only garnish your wages after it receives a court order saying that it can. In other words, the creditor must first do the following first before they can begin to garnish:

1) Sue you for breach of contract

2) Have you served with a summons

A wage garnishment is stopped by either paying the debt in full (with interest), or by filing a St. Louis bankruptcy. Once the bankruptcy petition is filed, a St. Louis bankruptcy attorney can contact the creditor who is garnishing your paycheck and have it stopped immediately.

Most St. Louis wage garnishments take up to 25% of your net earnings (but you can get that dropped to 10% if you claim Head-of-Household on your taxes). This can have a tremendous impact on your ability to pay all of you bills (let alone rent or mortgage). In fact, a lot of people will take out new credit cards to make up the shortfall from the garnishment just so they can buy necessities like groceries and put gas in the car.

But life does not have to go on like this. Living with this kind of stress can be overwhelming. Filing a St. Louis bankruptcy will not only put an end to the garnishment on your check; it will also get rid of the underlying debt that caused the problem in the first place.

A St. Louis bankruptcy will stay on your credit report for ten years. This change was made in 2005 by the United States Congress. However, most people mistakenly believe that this in turn means that you will not be able to incur new debt until that period of time lapses. This is incorrect.

The bankruptcy court and the federal government describe a St. Louis bankruptcy as a “fresh start / clean slate”. It is a chance to wipe the slate clean so that you can move forward with life. It is a chance to regain your financial freedom by getting rid of all your unsecured debts. Once the debts are knocked out, your credit score will start to improve dramatically. On average, most people can expect to see a one hundred (100) point bump upwards in their score within the first twelve to eighteen months after filing.

As a result, dealing with new creditors in the future will be a much more pleasant experience. Things like financing a new car, or securing a mortgage on a new home, or even getting new credit cards, will be very doable. And as you begin to rebuild, your credit score will only improve more.

It may seem like a crazy statement, but the difference between a large, industrial city like Detroit, and a regular man or woman living in St. Louis, is minimal. On the surface, this sounds way off base. But in actuality, both examples are looking for the same thing: a fresh start / clean slate.

The City of Detroit has seen its fair share of economic hardship. It was a booming metropolis up until the late 70s, early 80s, when the major car manufacturers faced stiff competition from places like Japan and Germany. Fast-forward a few decades later, and what you have is a city that still has incredible potential and pride, but has taken a pretty big punch on the chin. All the talent in the world lies within their borders, along with the know-how, hard-work, and eagerness to move forward. But its debts have weighed down so heavily against it that the city can barely make payments on time, meet its basic obligations, and is struggling to keep up with necessities. They just need a break.

This set of circumstances may sound very familiar to an individual (or married couple) who have worked hard all their life, and trying to make a decent living. But because of a failing economy and the loss of a job, they have had to take out lines of credit just to get by. Maybe even a few high interest loans so that they can bridge the gap between the next paycheck and keeping the lights on. These people are smart, hard-working, full of ambition, and want to make sure that they can provide for their families. And boy, do they just need a break!

Because it doesn’t make any sense for someone to live the rest of their life with overwhelming debt.

A person trying to make ends meet, who just had his hours reduced (or was recently laid off), who is juggling overdue bills, whose child has enormous health problems (and therefore very high medical expenses), and who is struggling to put food on the table shouldn’t have to worry about whether or not he can make a minimum payment on his credit card on time (most of which is interest, as opposed to principle).

Some people reading this may look at the above paragraph, and say something like, “Hey, if you can’t handle the burden of paying all your bills, then you shouldn’t have gotten yourself into this mess in the first place!” Well, that’s all good and fine. But it’s not as if this individual wanted to lose his job; he doesn’t want to have to live off of credit cards; and he surely does not want his child to have medical issues. I have filed thousands of St. Louis bankruptcies over the years, and every one of these individuals are good people who have found themselves in situations beyond their control. Simply condemning these individuals, and trying to make them feel guilty about their particular set of circumstances, is completely unproductive.

Yes, they will. Medical bills (whether they are from a hospital, specialist, or your regular family doctor) are described as “unsecured”. That means that these debts are subject to a complete discharge in a St. Louis bankruptcy.

Unfortunately, there are thousands of people each year who must file for bankruptcy protection because of a high amount of medical bills. This can occur to people who even have decent health insurance. The main reason behind this fact is that hospital systems mark up the cost of their services by an extraordinary amount. Recent reports indicate many examples of this phenomenon. A typical roll of gauze, for instance, that might be used to wrap an injury or surgery site, will show up on a patient’s bill four to five times greater than what it might be purchased for at Wal-Greens pharmacy. As you can see, once these charges are added up, the final bill can be astronomical.

Of course, the reason why medical bills are subject to a discharge has to do with the way in which this debt is classified. There are three broad categories of debt involved in the world of bankruptcy: 1) secured debt – this type of debt is typically associated with a car loan or home mortgage; 2) unsecured debt – the reason debts are “unsecured” is because there is no collateral attached to them, such as a piece of real estate; and 3) priority debt – this category would include back child support, maintenance (spousal support), and most tax obligations.

Yes, you can. When you file a St. Louis bankruptcy, you have the option of keeping or getting rid of your secured assets (like a house or a car).

Most often, people wish to keep their property. But if you are in a situation in which you can no longer afford the real estate, or if you are just too far behind on the mortgage, or if it is simply falling apart, then surrendering the asset through the bankruptcy is an easy way to get out from underneath the debt. An experienced St. Louis bankruptcy lawyer can just make it clear to the court that your intent is to surrender the mortgage, and that is that.

In addition to letting go of your real estate, a St. Louis bankruptcy attorney can also get rid of your unsecured debts (like credit cards, medical bills, and payday loans). It will also stop any wage garnishments attached to your paychecks; it will unfreeze any bank levies attached to your checking account; and it will put an end to any lawsuits filed against you by a creditor.

If it is the original creditor, then yes, they can do that. There are actually very little restrictions on what an original creditor can do. They can show up to your front door and demand payment from you if they chose. But if it is a collection agency, that is a much different story.

The Fair Debt Collection Practices Act (FDCPA) is a federal law that very tightly regulates what a collection agency can and can’t do in their attempts to collect on a debt. If for instance a St. Louis collection agency calls you repeatedly each day, or if they make calls to you on a Sunday, then it is quite possible that they have violated your rights.

If in fact the collection agency has violated your rights, the FDCPA says that the debt collector has to pay you $1,000 in damages. The FDCPA also states that if your rights have been violated, it is the collector who has to pay for your attorney fees. This means that we never have to charge you any fees for the work that we do against a St. Louis collection that has violated your rights.