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Law Offices of Christopher A. Benson, PLLC

Top Reasons People Need Bankruptcy Relief

  • By: Christopher Benson
  • Published: March 23, 2014

I meet with over 250 clients a year. Based on my observations, the following are the top 5 Reasons People Need Bankruptcy Protection. We are here to put a plan together for you to take control of your financial situation. Our clients love working with us. Check out our client reviews.

1. Lawsuit and Pending Garnishment. You got served with a lawsuit for some unpaid bill, didn’t do anything about it and got a judgment against you. Now, the creditor is trying to collect by garnishing your wages and bank account. We can stop the lawsuit and the garnishment for you to take control of your financial situation.

Judgments in Washington are valid for 10 years and can be renewed for an additional 10 years. So, if you got a judgment against you when you experienced a time of unemployment and are now back to work, that old judgment can garnish 25% of your wages.

Here is the good news, I can help you stop any garnishments and propose a plan for you to take control of your financial situatiton.

2. Lost Job/Laid Off/Hours Reduced. A lot most of my clients have experienced a decrease in income due to periods of unemployment and reduction of income. Here is a tip: If you have been unemployed for more than 3 months, you probably qualify for bankruptcy protection where you can eliminate all of your debts and keep all of your assets. You need to make the best financial decision for you.

If you have experienced a reduction in income and can’t catch up, a Chapter 13 bankruptcy may be best for you. In a Chapter 13 bankrutpcy, all of you unsecured debt (credit cards) is reduced to 0.00% and you have up to 36 months to make up any past due mortgage payments.

3. Short Sale of House and/or Change in Mortgage Interest Rate. Many people have “pay option ARM” loans with a 3 to 5 year balloon. Those people have experienced a big increase in the mortgage payment and cannot refinance their house to pay off the existing loan. Through a Chapter 13 Reorganization, we can help you save your house and cure loan arrearages over 36 months.

4. Medical Reasons. Sudden illness or injured on the job. Although they have not lost their job, they have experienced a reduction in income and a dramatic increase in monthly expenses and overall debt load.

5. Divorce. Sometimes it make sense that although you are going to eventually dissolve the marriage, both spouses participate in a bankruptcy resolution together to eliminate a lot of stress and argument over debt. The resolution may consist of filing together prior to divorce or each spouse filing separate after divorce.

6. Real Estate Investment Gone Awry. Many people purchased rental investment property at the peak of the market with “negative cash flow.” Negative cash flow means that the rent received does not cover the property costs of ownership. People use other sources of income to “feed” the property and make up the difference. Property values have declined and people are not able to sell the properties for more than the original purchase price. Therefore, they are stuck. Bankruptcy protection can solve this problem.

Send me a question through our website or give us a call at (253) 815-6940 to schedule your free initial consultation so that we can help you take back control of your life and put a game plan together.

Christopher Benson

About the Author Chris served on the Board of Directors for Habitat for Humanity
Seattle/S. King County for 10 years and served as Vice President
of the organization during part of that time. Read More