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Businesses considering bankruptcy get intense legal advice before filing. You would also be smart to get solid advice to make a good decision.


What Businesses Do Before Filing Bankruptcy

The following are just a few of the companies which have filed business bankruptcy in the last couple months:

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Texas bankrutpcy lawyer, Texas chapter 7 attorneyConsumers who struggle to make monthly mortgage payments quickly become overwhelmed with collection calls and letters plaguing the mailbox. Fight or flight instincts immediately kick in, and most people choose to ignore the lender’s collection efforts. Many automatically assume that the bank immediately wants their home and retreat into self-preservation efforts. The truth is, the bank does not want your house. Lenders want you to pay the mortgage, and in most cases, if they can help you make that payment and save your home, they will. If the mortgage lender fails to reach an agreement with the borrower, imminent foreclosure efforts can stay through a bankruptcy filing.

Why Will the Bank Help?

The home you live in belongs to your mortgage lender. When you purchased, they assumed the cost of the home for you with the agreement that you would pay monthly payments until the loan is repaid in full. Until that day, the house belongs to the mortgage company. While they will not typically help someone with no potential benefits for themselves, they also are not in the business of buying and selling real estate either. If lenders must take a house in the foreclosure process, not only do they lose out on the money they would make in your interest payments, they also must pay the legal costs for the foreclosure process and the costs to sell the home, typically for less than the original amount. Lenders ultimately prefer to salvage the mortgage agreement, either by extending the loan or lowering the interest rate. If their borrower fails to communicate, this option is null, and the lender must begin foreclosure proceedings.

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You file bankruptcy most likely under Chapter 7 or 13, or possibly 11. Ch. 12 is for farmers and fisherman, Ch. 9 for governmental entities.

Chapter 7

Chapter 7, or "straight bankruptcy,” is the most common type of bankruptcy. Nearly 2/3rds of all bankruptcy cases filed in 2015 were Chapter 7s

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