These are the things that I usually discuss first and worry about the most when I talk to someone for the first time about bankruptcy.
These urgent problems include getting legal paperwork like a summons and complaint. This called being served with a lawsuit or small claims case. This can include personal delivery to you or someone at your home. The paperwork usually gives you a deadline to “appear” in the case which really just means that you have to file your own paperwork or the debt collector will win a judgment automatically. Being served with paperwork is an urgent problem because it means that the collection agency is quickly going to get a judgment and be able to garnish your bank account or wages.
A judgment against you or a garnishment on your wages or bank account is an immediate concern. If you find out that there is a judgment, you should withdraw your money from your bank accounts to make sure that the bill collector who has it can’t get it first. If you file bankruptcy, it would stop further garnishments.
If a creditor has already seized your bank account or wages, you should talk to a bankruptcy attorney right away because you may be able to get some or all of the garnished money back if you file a bankruptcy case soon enough. Typically, our clients can get back funds that were garnished from their wages or bank accounts within the 90 days before they filed a bankruptcy, if the creditor received, in that 90 day period, a total of at least $600.00.
There can also be problems if you owe money to your bank. Even if the funds were, for example, social security or unemployment compensation that would be protected if other, outside creditors, tried to garnish them, your own bank could take them or freeze your account if you missed a payment or if you told your bank you were thinking of filing bankruptcy. If you aren’t going to be able to make the payments to your bank, you should open an account at a bank where you don’t owe any money. This is especially important if you end up having to file bankruptcy.
Another problem that needs urgent attention is if you are getting notices from the IRS or the State of Oregon Department of Revenue. You may have rights to deal with collection of taxes before levies, liens and garnishments are filed but only if you file your appeal or request for hearing within certain deadlines set out in the notices. If you are getting IRS or ODR notices, you should definitely call us right away so we can see if you have a chance to stop things from going further. If you get certified mail notices, always pick them up right away because they may be crucial to getting to the IRS or the ODR before they proceed further on trying to collect past due taxes.
Owing money to the IRS or the State of Oregon is another situation when you should withdraw your money from your bank accounts to make sure that the tax collectors can’t get it first.
Another immediate concern is the risk of repossession of your vehicle. Are you 30 to 60 days behind on your car payments? Most lenders will start to attempt to repossess once you are 60 days behind. It is important to call the lender and try to make arrangements to catch up on the missing payments. However, if that is not possible, you may need to park the vehicle in a secure area like a garage or inside a fenced yard to keep it from being repossessed.
Filing bankruptcy stops a repossession but only Chapter 13 guarantees the right to cure the missing payments over a lengthy period of time. In Chapter 7, you will have to catch up fairly quickly but in Chapter 13, you can put the car loan “in the plan” which means that the loan will be paid from the payments you make to the trustee on your Chapter 13 plan.
In Chapter 7, if you stop a garnishment or can stop paying the credit cards or past due medical bills, you might have enough money left over after your living expenses to catch up on the car payments.
A common urgent problem that is the number one reason for filing Chapter 13 getting behind on your house payments and being unable to work out arrangements with the mortgage company. If you have received a notice that a foreclosure proceeding is going to be started, it is crucial that you get an appointment scheduled immediately to start working on a strategy that will let you keep your home and catch up on the missed payments over a period of time.
These are the most common urgent problems that should be addressed right away. Delay usually hurts your chances of a favorable outcome. Unfortunately, time definitely is not on your side!
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