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The Bankruptcy law has changed and most cases require attorney consultation and assistance. Review my (Bankruptcy Basics) learn about bankruptcy and contact my office to help you.
BANKRUPTCY BASICS
Rebuild Your Credit
One of the most common concerns that we hear from clients has to do with the stigma related to bankruptcy. We caution you against rumors of the bankruptcy stigma that you may hear from friends or family, who may not posses the knowledge of bankruptcy law necessary to give legal advice. Bankruptcy laws are changed but an honest debtor that has lost his job, has borrowed more than his ability to pay back, has unexpected hospital bills, has started a business and it has failed, has been misled by credit card companies, friends and relatives or is going through divorce can file chapter 7 or 13 and get a fresh start. Bankruptcy can remain on your credit report for up to 10 years, but you can start reestablishing your credit immediately.
Many of our clients are able to purchase a vehicle on financing the day they receive their bankruptcy discharge. Although the lending market conditions has changed, you should still be able to finance a home within two years after receiving a bankruptcy discharge, as long as you can provide a minimum down payment and show the ability to make the monthly mortgage payments.
- Eliminate Repossessions.
- Stop Garnishments.
- End Lawsuit/ License Suspensions.
- Keep Your House, Car, Furniture and Personal Belongings by reaffirming.
What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy, sometimes called a straight bankruptcy is a liquidation proceeding. The debtor turns over all non-exempt property to the bankruptcy trustee who then converts it to cash for distribution to the creditors. The debtor receives a discharge of all dischargeable debts usually within four months. In the vast majority of cases the debtor has no assets that he would lose so Chapter 7 will give that person a relatively quick “fresh start.”
One of the main purposes of Bankruptcy Law is to give a person, who is hopelessly burdened with debt, a fresh start by wiping out his or her debts.
The filing of a petition under chapter 7 “automatically stays” most actions against the debtor or the debtors property. 11 U.S.C. 362. This stay arises by operation of law and requires no judicial action. As long as the stay is in affect, creditors generally cannot initiate or continue any lawsuits, wage garnishments, or even telephone calls demanding payments.
A “meeting of creditors” called (341) meeting is usually held within 45 days after the petition is filed. The debtor must attend this meeting, at which creditors may appear and ask questions regarding the debtor’s financial affairs and property. 11 U.S.C. 343. if a husband and wife have filed a joint petition , they both must attend the creditors meeting. The trustee will also attend this meeting. It is important for the debtor to cooperate with the trustee and to provide any financial records or documents that the trustee requests. The trustee is required to examine the debtors orally at the meeting of the creditors to ensure that the debtor is aware of the potential consequences of making a discharge in bankruptcy, including the effect on credit history, the ability to file a petition under a different chapter, the effect of receiving a discharge, and the effect of reaffirming a debt.
To qualify for relief under chapter 7 of the Bankruptcy Code, the debtor may be an individual, a partnership, or a corporation or other business entity. 11 U.S.C. 101 (41), 109(b).
Alternatives to Chapter 7
Debtors should be aware that there are several alternatives to chapter 7 relief. For example, debtors who are engaged in business, including corporations, partnerships, and sole proprietorships, may prefer to remain in business and avoid liquidation. Such debtors should consider filing a petition under chapter 11 of the Bankruptcy Code.
Chapter 13 Bankruptcy is also known as a reorganization bankruptcy. Individuals who want to pay off their debts over a period of three to five years file chapter 13 Bankruptcy. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. It is also only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses with some amount left over to pay off their debts.
Individuals may file chapter 13 bankruptcy petitions if they:
Reside, have a domicile, a place of business, or property in the United States, or a municipality; Have a source of regular income; and on the date the petition is filed owe less than $307,675.00 in unsecured debts and less than $922,975 in secured debts. Note: The amounts given here are regularly adjusted to keep up with the cost of living.
Corporations and partnerships may not file a chapter 13-bankruptcy petition. If you filed a prior bankruptcy petition and the prior proceeding was dismissed within the last 180 days, you may not be able to file a second petition and should check 11 U.S.C. Sec. 109(g).Corporations and partnerships may not file a chapter 13-bankruptcy petition. If you filed a prior bankruptcy petition and the prior proceeding was dismissed within the last 180 days, you may not be able to file a second petition and should check 11 U.S.C. Sec. 109(g).
Debtors may also get credit counseling or negotiate with creditors to reduce their debts.
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