Is a personal loan company threatening to take your personal items, furniture and household goods? Are you struggling to pay back a family member or friend who loaned you money to help you out of a tough situation? If so, bankruptcy can help solve these financial worries so that you can get back on your feet. It is understandable that you are worried about losing your property because of personal loans as it is also understandable that you are worried about not paying back a family member or close friend; however, you should not be forced to go on struggling with debts when there is an affordable solution to your debt problems.
Personal Loans Owed to Family and Friends
Yes, bankruptcy eliminates personal loans owed to family and friends. These unsecured loans will be treated just like the money you owe on credit cards and medical bills. In many cases, people will avoid filing bankruptcy because they do not want to include personal loans from family and friends. This is not a good reason to ignore your debt problems because there is a simple solution – you can voluntarily choose to pay your family member or friend after your bankruptcy case is closed.
Bankruptcy laws prevent you from giving preferential treatment to one creditor over another. This means that you cannot choose to pay your family members while choosing not to pay your credit card bills prior to filing a bankruptcy case. If you do so, the trustee may be entitled to recoup the payments to your family members as a preferential payment and use those funds to pay all of your creditors on pro-rata basis. However, if you file bankruptcy prior to repaying your family members, you can voluntarily choose to repay that debt once your bankruptcy case is closed.
In order to avoid problems, you need to tell your bankruptcy attorney about any personal loans and/or payments to family members. He can help you decide on a course of action that meets your needs only if he knows the situation. Hiding the existence of personal loans only causes problems for you and your family members.
Personal Loans Secured by Household Goods
Finance companies offer personal loans to individuals who are willing to offer household goods as collateral for the personal loans. If you default on the personal loan, the finance company will take legal action to repossess the household goods that you used as collateral for the loan. In many cases, the finance company will pressure a borrower into refinancing the loan as a way to avoid repossession. This action only increases the amount of fees and interest owed by the borrower. There is a better way.
By filing bankruptcy, you can discharge personal loans and keep your household goods. Debtors can file a motion to void the lien on certain household goods so that the finance company cannot repossess the collateral even though you are discharging the debts. In order to determine if your personal loans are eligible for a discharge under these circumstances, contact our office to discuss your bankruptcy options. In most cases, we can help you protect your property while eliminating your personal loans and other debts.
Contact an Experienced Mount Holly Bankruptcy Attorney
Personal Approach, Professional Service, Affordable Payment Plans
The Law Office of Travis J. Richards, LLC is a full-service Mount Holly bankruptcy law firm focused on Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, debt consolidation, credit repair, tax liens, student loans and foreclosure. We represent clients in Burlington County and throughout South Jersey.
Contact our office at 609-267-5297 to schedule your free consultation to discuss bankruptcy and non-bankruptcy alternatives. You may also use our convenient online contact form and one of our friendly, professional staff members will contact you to answer your bankruptcy questions and/or schedule a free consultation with Travis J. Richards.
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