Personal Loans and Bankruptcy
Are you getting calls every day from bill collectors and creditors demanding immediate payment? Has a creditor filed a lawsuit to collect a personal loan? If so, bankruptcy can help you solve your debt problems so that you can recover from a financial crisis and get back on your feet. Some people put off filing bankruptcy because they fear losing personal property they used as collateral for a loan and/or they do not want to list family members as creditors because they owe them for a personal loan.
Personal Loans and Finance Companies
Most personal loans with finance companies are secured by household goods that the person owned before borrowing money from the finance company. If the person defaults on the loan, the finance company can take legal action to repossess the collateral for the loan. There is a way to get rid of the debt from this personal loan and to keep your household goods.
When you file a bankruptcy case, you can will file a motion with the court to void the lien on household goods for personal loans with finance companies. In most cases, you can retain the household goods you used as collateral for the loan and the personal loan will be discharged. To determine if the lien on your household goods from personal loans are eligible to be voided, contact our office to schedule a free bankruptcy consultation with an experienced bankruptcy attorney.
Personal Loans and Family Members
When we are struggling with debt problems, family members will often help by loaning us money until we can get back on our feet. Most family members do not worry about getting this money back and consider it a gift. However, if you must pay back a loan to a family member, that person is a creditor and he or she should be listed as a creditor on your bankruptcy filing. You should discuss this with your attorney so that the attorney can determine if the family member should be listed as a creditor.
If you must list a family member as a creditor, the debt that you owe to that person will be discharged through your bankruptcy case. The good news is that you can voluntarily choose to pay back your family member even though you are not legally obligated to do so. However, you must wait until after your bankruptcy case is closed to pay back a family member.
Paying back a family member within one year of filing bankruptcy is a preference. The trustee assigned to your case can take action to recover the payments to your family member made within one year prior to filing your case. The money will be paid to your unsecured creditors on a pro-rata basis. If you have paid back family members during the last year, tell your bankruptcy attorney immediately. If you owe money to family members, do not pay them back prior to filing bankruptcy. Wait until after your case is closed to pay back family members but discuss this first with your attorney.
Contact an Experienced Radcliff and Elizabethtown Bankruptcy Attorney
We’ve Helped Thousands of KY Families, we can help you!
The bankruptcy lawyers of Musselwhite Meinhart & Staples, PSC have over 50 years of combined legal experience. If you are having financial problems, we can help you. We represent clients throughout central Kentucky.
Contact us at our Radcliff and Elizabethtown Office in Hardin County at (270) 351-6032 or toll-free at 1-800-754-HELP to schedule a free bankruptcy consultation with one of our attorneys. You may also contact our office through our convenient online contact form.