I am behind on my mortgage payments – can bankruptcy protect my home? Yes and no, depending on which bankruptcy chapter one chooses to file. At first, all the property that a Debtor owns except property that is exempt under Arizona law (if the Debtor lives in Arizona) becomes part of the bankruptcy estate, regardless of which Chapter is filed. The exempt property and the property in the bankruptcy estate is protected by the automatic stay.

Can bankruptcy stop a creditor from taking money out of my paycheck? Yes. When money is owed to a creditor, the creditor can go to court and get a judgment against the Debtor. If the Debtor don’t work something out with the creditor to pay off the judgment, the creditor can file a Writ of Garnishment with the Court, and the Writ then forces the Debtor’s employer to take money out of each paycheck and pay it to the creditor.

I co-signed my son’s car that the bank repossessed- can the bank go after me? If a Debtor co-signed a debt such as a car loan for their son and the son cannot make the payments, the bank will generally repossess the car and sell it at auction. Because the car will not sell for as much as what the son owes on the debt, the bank will have a deficiency judgment for the difference between what is owed and for what the car sold.

Can bankruptcy stop the bank from taking my car? Yes and no. When filing for bankruptcy, generally everything a Debtor owns becomes property of the bankruptcy estate, except property which is exempt under Arizona law (if you live in Arizona). The bankruptcy estate is protected from the collection efforts of creditors by the automatic stay. Arizona exemption statutes protect exempt property.