Bankruptcy
What is Bankruptcy? Bankruptcy is a federal legal process through which individuals, couples, and businesses who are having financial difficulties in repaying their debts to creditors, may seek relief from some or all of their outstanding debts. Bankruptcy law was created to provide you relief, by discarding your debts or making a plan to repay all or part of your debts.
The moment you file for bankruptcy, the law provides you protection by placing an automatic stay on debt collection. This means that debt collectors can no longer harass you for payments on your outstanding debts. Once your debts are successfully discharged, you are no longer legally liable for those debts and creditors are prohibited from ever making any collection attempt on those debts. Most debts are dischargeable in bankruptcy. However, some debts cannot be discharged. These non-dischargeable debts are:
- Debts that are domestic support obligations (i.e. Alimony, Child Support);
- Debts for most student loans;
- Debts for most taxes;
- Debts that the bankruptcy court has decided that are not dischargeable in the bankruptcy case;
- Debts for most fines, penalties, forfeitures, or criminal restitution obligations;
- Debts which debtor did not properly list in its bankruptcy petition;
- Debts for certain types of loans owed to pension, profit sharing, stock bonus, or retirement plan;
- Debts for death or personal injury caused by operating a vehicle while intoxicated; and
- Debts covered by a valid reaffirmation agreement.
Most who contemplate filing bankruptcy, frequently have questions or concerns such as:
- Is Bankruptcy right for me?
- Do I qualify for Bankruptcy?
- What Bankruptcy Chapter do I qualify for?
- When is the right time to file for Bankruptcy?
- How much do I need to be in debt to file for Bankruptcy?
- Can I keep my house after filing Bankruptcy?
Because bankruptcy law is a complex area of the law and every case is different, you should contact legal counsel to discuss any questions that you may have regarding your particular situation.
If you are having difficulty in paying your debts, call us today to speak with a bankruptcy attorney. Our legal team is ready to help you obtain the financial relief for a fresh start.
BANKRUPTCY SERVICES
- Chapter 7 bankruptcy, also known as Straight Bankruptcy or Simple Bankruptcy is basic liquidation available for individuals and businesses. Chapter 7 proceedings are fast, with most cases being completed within 5 to 6 months after filing for bankruptcy. A Chapter 7 can only be filed every 8 years. To be eligible to file for bankruptcy under Chapter 7, you must pass a “Means Test“ which evaluates whether your income is below a certain limit. If it is determined that you are not eligible for bankruptcy under Chapter 7, you may be eligible under Chapter 13.
- Chapter 13 bankruptcy, also known as Wage Earner Bankruptcy, is only available for individuals and sole proprietors. A Chapter 13 can only be filed every 4 years. Under Chapter 13, you retain ownership and possession of all of your assets, but must file a repayment plan devoting a portion of your future income to repaying all or part of your debts to creditors, generally over 3 to 5 years. Your repayment plan must then be confirmed by the court-appointed bankruptcy trustee. All of your payments are made to the trustee who disburses the funds in accordance with the terms of the confirmed plan. Upon completing all payments pursuant to the terms of the plan, your debts would formally be granted discharge by the bankruptcy court. If you fail to make payments in accordance to the plan without a court-approved modified plan in place, the bankruptcy court will normally dismiss your case on motion by the trustee. A dismissal of your case would permit creditors to resume collection attempts in recovering your outstanding debt.