Peter Francis Geraci A Bankruptcy Blog - Chapter 7 & 13

A Peter Francis Geraci Law client wanted to file a Chapter 7 bankruptcy to eliminate his unsecured debt and attempt a loan modification. His modification failed and his mortgage company filed a foreclosure. A sheriff sale order was entered in case. The client met with Geraci Attorney Frank Hernandez and his case was converted to a Chapter 13.

Geraci Attorney Jill Luetkenhaus filed the client’s case and the sheriff sale was stopped. The client said Peter Franci Geraci and attorneys saved his life. Without the help of Geraci Attorneys, the client would have lost his house. Loan modifications are blinders, if you want to keep your house call Peter Francis Geraci. You can meet with experienced attorneys like Herandez and Luetkenhaus to get the best option to get out of debt.

Are foreclosure rates dropping?  Yes. What does that mean for you?  Nothing.  If you are behind, you are behind.

The Mortgage Bankers Association reports 6.3 million mortgages over 30 days past due.  If you are waiting for loan modification, keep dreaming.  Peter Francis Geraci of Geraci Law LLC says:  “Our clients are doing something about past due mortgages.  They are filing Chapter 13 repayment plans and working on their modification during the Chapter 13.  That lets you control your debt, and gives you added leverage with the mortgage company.  It is a little known secret that if you file Chapter 7 or 13, banks will work with you just as before, and your chances of success may be better.

The longer you wait to be proactive on your home, the further you get behind. In a Chapter 13, you are able to spread the back payments into a 3-5 year repayment plan. The farther you are behind, the higher the payment is going to be. Be ahead of the curve and call  Peter Francis Geraci Law in Illinois Indiana and Wisconsin for a Chapter 13 Debt Repayment Plan to stop foreclosure, and get your mortgage current, for as little as $274 to file in as little as one day.

There are daily headlines discussing ways to fix the economy.  Journalists spew out facts and figures making little sense to your average person.  When CNN reports unemployment rates are showing signs of improving and my friends and family are still out of work – the CNN Special Report is meaningless.                

Nowadays, people are not concerned about the national economy. The concern is their household economy.  Most people are out of work, worried about layoffs, or struggling with inflation and frozen salaries. These people have children, credit cards and houses that seemed like a great idea in 2007.  As an average Joe, the future seems bleak.

Almost every person carrying monthly credit card balances should file a bankruptcy.  If you are working, get some relief with a Chapter 13 interest-free repayment. If you are out-of-work consider filing a Chapter 7 so you can save the monthly payment.  Many people are worried about the stigma of having a bankruptcy. Realistically, talk to your neighbors, family or co-workers. It is safe to assume someone is struggling with the same problems you are.

Think about it, the United States had a credit downgrade. Where is your relief? Your bailout? The answer is with a bankruptcy. Bankruptcy is a safe-guard for consumers.  It is the only way (unless you are able to make the payment) to stop creditor harassment and interest. Money you are paying your creditors every month does not decrease your balance. Instead, you are paying your creditors baseless interest.

Some creditors and advertisements will sell you the idea of debt settlement.  Have you ever tried to call your creditor to settle a bill? Most of the time, you’ll hear a dial tone. Many debt settlement agencies are usually owned by or in partnership with creditors.  You are paying an organization to settle the debt owned by the same company you owe!

Bankruptcy will get you out of debt. That way, when hours start to pick up at work, when the housing market begins to take a turn (for the better), you will be debt free! Stop the struggle and seek some relief.

Bankruptcy may seem simple but you are putting yourself and your assets at risk if you do not hire a competent attorney.  More and more people are being scared off by attorney fees.  While fees are important to consider, filing a case without an attorney is a mistake.  Bankruptcy Code is a 500+ page complex document, and if one line of text is misinterpreted, it can lead to the dismissal of your case, or the loss of your property. 

If a case is dismissed and refilled, the automatic stay (the document making the creditors stop calling) will remain in effect for only thirty days. You need to refile all the paperwork and file a motion to extend the automatic stay. Paperwork that takes hours for you to do, would take a competent attorney minutes.

Cost is always a factor. But consider paying an attorney and saving in the long term. Geraci Law offers payment plans for fees and has done cases for people of different financial situations. You pay a significantly smaller fee than your total debt.

Consider this example (you can read the full case online, here). He filed a pro-se bankruptcy. Because of an adversary loss, a $3,723,095.50 debt was found to be nondichargeable. While some cases are less complicated than others, some cases cost much more than the initial fee.

Hiring the right attorney is just as important. Peter Francis Geraci, Geraci Law attorney Jonathan Parker won an adversary proceeding for his client. An adversary was filed claiming the client committed fraud and the debt was non-dischargeable. Attorney Parker successfully argued her case and she saved thousands of dollars.                                                                                    

Like many Americans, a man simply owed money. One morning, the man left his family to try and settle the debts. That evening, his family was widowed and fatherless.

This man’s name was Irzen Octa and lived in Indonesia. He like many people was in debt and was worried about losing his home. His debt included an $11,000 bill to Citibank – almost double the original charge amount because of high interest.  He had bill collectors calling and other sleeping on his front step after Octa was unable to pay.

His wife is now suing Citibank for $350 million in damages. There is video of Octa entering a room in Citibank offices and leaving two hours later in a wheelchair.  Citibank in Indonesia contracted with outside debt collectors. Currently, they are examining who the collectors were and the job they were hired for.

The men Octa interviewed with were arrested (none were Citibank employees) for alleged group violence and mistreatment resulting in death.

How far is too far? Debt collectors in America have been criticized for violating FTC regulations but nothing resulting in death. America thankfully has bankruptcy law to protect you when the collectors are getting too harsh. You have a safety net to either eliminate your obligation to pay or pay your debt interest free with a Chapter 13 bankruptcy.

If you are struggling and have debt collectors threatening to sleep on your porch, call us! Bankruptcy will help you. To read the article in The Washington Post, please click here.

A client came into meet with Indiana Geraci Law Attorney Bridget Tucker to discuss his future tax returns. A friend of his had filed with a different attorney and was required to give his tax return to the Bankruptcy Trustee each year. The client was nervous about his own tax refund.

Bridget told the client his case was reported as no asset – meaning his tax return is his to keep!  When the client originally came into the office, Geraci Law attorney Robert Brynjelsen told him to change his exemptions. By changing his exemptions, he gets more money from his paycheck and can keep his return.

His friend will pay more than the original fee from the other attorney and will lose his tax return. By meeting and filing with Peter Francis Geraci/Geraci Law LLC, the client was able to actually save money.

Taking the first step and calling a bankruptcy attorney is the worst part of bankruptcy. Most people feel uncomfortable talking about finances with family let alone a complete stranger on the telephone. The phone counselors at Geraci Law LLC are knowledgeable and understanding to your specific situation.

Phone counselor, Kelly McNamara spoke to a couple about their assets and debt. The couple hesitated to file a bankruptcy because they worried about losing their home. Kelly found a Chapter 13 solution would suit their individual case to get current on the mortgage, protect all of their assets, and provided an affordable repayment plan on the other debt. By calling Kelly at Geraci Law, the couple found a great long term solution to their debt.

James McGlamery spoke with a divorced man who struggled with his budget after he started paying child support. Because of the change in income, he used his credit cards to pay for groceries.  The man was nervous about filing a bankruptcy on his credit card debt. James assured him he was doing the right thing and being a good dad.

Declaring bankruptcy can be intimidating. You are in a vulnerable position and it is important to trust the person you are discussing your financial troubles with. Geraci attorneys and staff are here to help. We will listen and find a way to get you out of debt!

The current economy affects different economic and cultural groups differently.  Older minorities are taking the brunt of the current economic downturn.

A study done by The Greenlining Institute found a huge disparity between minorities and white retirees. The study showed 91% of African American and Latino seniors are “financially vulnerable.” High health care and living costs are some of the factors in the disproportion. 

Social Security recipients have not received a cost of living raise in two years. With the cost of food and utilities increasing steady, many retirees must use credit cards to pay for the basic costs of living.  Often, the credit card payments become overwhelming.

An increase in a minimum payment can have a ripple effect on a senior’s budget. To stay current with the payments, the increased amount must be taken from a different part of a fixed income. There are many retirees who use money from their medical budget to stay current with credit card payments.

A chapter 7 bankruptcy is a great solution. The way to change your life from financially vulnerable to the stable is by eliminating the debt. Money spent on minimum payments can be used for food, utilities and other living expenses.  The retirement plan of pension, social security and credit no longer works. Eliminate the debt, establish a savings account and start to enjoy retirement.

Average household credit card balances have increased for the first time since 2008.  Analysts attribute the increase to incentives offered by banks like lower interest rates and cash back bonuses.

Apparently lesson not learned. Credit card companies want you to be in debt! If you sweated out the recession paying down your debt, why would you put yourself in the same situation? Your creditors may offer lower interest but ultimately if you miss a payment, the great deal goes away.

Most bank offer incentives for debit cards! Using a debit card forces you to live within your means. Some debit card reward programs offer cash back incentives. You also get cash back because you are paying zero interest.

Chapter 5 of Peter Francis Geraci’s bankruptcy book is titled, “When You Should Consider Chapter 7 or Chapter 13 Plans.”  If five or more of the following apply to you, it’s time to call the bankruptcy attorney:

_____My debt is over $5000 not including a car or house.

_____My payments are over 25% of my take home pay.

_____I am frequently late on my payments.

_____I pay 20% interest on my debt.

_____I buy necessary items like food or clothing on credit.

_____I frequently get cash advances.

_____I am thinking about getting a loan to pay other loans.

_____Someone has filed a lawsuit against me.

_____Collection agencies are calling me.

_____I am "robbing Peter to pay Paul."

_____My balances are not going down even though I make payments.

_____I have been turned down for more credit.

_____Payments are more than 1 month behind on more than one bill.

_____My driver’s license is suspended because of an accident.

_____I can't afford car insurance.

_____My mortgage or rent is always late, or is behind.

_____We are getting divorced and have too many bills to pay.

_____I have medical bills over $5000 that are not insured.

_____There is a garnishment or wage assignment on my check.

_____I owe income taxes I can't pay now.

_____My car is worth much less than I owe.

_____I have no savings.

A Chicago debt settlement firm was recently fined $314,000 for unlicensed debt settlement practices.  The company charged for “legal” services for negotiating down credit card debt in exchange for payment. Payment was required up-front before the alleged attorney would negotiate down debt.

According to the Chicago Tribune, fees included a $500 retainer, a $49 per month charge and up to 15% of the total debt.  If you have $10,000 in credit card debt, you would pay the firm $2,000 in fees plus a monthly charge!  Unlike a Chapter 13 plan, there is no limit to how many months your plan could last. A Chapter 13 bankruptcy is 3-5 years while debt settlement plans can last for ten years (that’s 120 months multiplied by $49).

Last year, Illinois passed the Debt Settlement Consumer Protection Act. This act prohibited debt-settlement companies from charging up-front fees. The exception to this rule is attorneys. So this firm advertised that debt would be settled by attorneys.

It was found however the agreements were signed by a man who was not licensed to practice law in Illinois. This same company is amidst a lawsuit with Illinois Attorney General Lisa Madigan – see previous entry “Another One Bites the Dust.”

To read the article please click here.

When you have made the decision to leave your home and you are unable to sell, you will receive countless letters from realtors. After the market tanked, so did the income for realtors who were making six-figure salaries. Realtors are looking for properties to sell to earn a living.  They will try to sell you on the benefits of short sales when really none exist.

Staying in your home until the end of the foreclosure will allow you to save money on the cost of rent. If you stay in your home, there is no commission available for a realtor!  A realtor will try to sell you on short sales because of the possible commission. They may try to say a short sale looks better on your credit than foreclosure. Reality is a short sale looks just as bad.

Do not believe the hard-sell by realtors. Think back to when you purchased your home and a realtor tried to justify an upgrade here or there. Look at your finances, if you are out of work take advantage of the situation. You can save money on rent until the end of the foreclosure.