Bankruptcy is a scary word and conjures up a number of negative images and thoughts. It is also a very private situation where you need a trusted adviser for guidance. It is not a topic you want to discuss with friends or family. Nor is it something you should attempt to do without the guidance of an attorney.
If you find yourself in one of the below situations, bankruptcy may be a solution to your financial situation and a good option for getting your life back on track.
- Having trouble paying your bills?
- Having your wages garnished by a creditor?
- Facing a foreclosure or repossession?
For individuals, there are two types protection and they are referred to as a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy. If you own a business, filing bankruptcy for your business is done via a Chapter 11 Bankruptcy.
Fees for Filing Bankruptcy
You may be wondering how you can afford to pay an attorney to assist you in filing for bankruptcy and get a fresh start. Fees for handling your bankruptcy case depend on whether you will be filing a Chapter 7 or a Chapter 13.
Chapter 7: These fees include a filing fee of $335.00 and attorney fees of $1,200.00
Chapter 13: The attorney fees vary based on the complexity of your case and will be included in your monthly Chapter 13 payment.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is designed to wipe out your debts and give you a fresh start.
Chapter 7 Bankruptcy is a liquidation bankruptcy in which the Chapter 7 trustee sells assets that are non-exempt. In most individual cases, all the assets are exempt; therefore, there are no assets for the trustee to sell. Non- exempt assets include luxury items such as boats, and expensive jewelry (generally wedding bands are exempt along with clothes, and other basic items of necessity). The Chapter 7 trustee will distribute to your creditors any proceeds received from selling your non-exempt assets. In general, Chapter 7 is the simplest and quickest form of bankruptcy. In order to qualify for a Chapter 7, you must qualify your income under a “means test” and make less than the amount determined. Working with me as your bankruptcy lawyer, I can inform you if you qualify for a Chapter 7 once we meet to assess your individual case.
When filing a Chapter 7, you must list all debts you owe, as well as all assets. There are certain debts that you may want continue to pay and exclude from your Chapter 7 filing. I can help you identify when this may be a good option and if the trustee will approve of such exclusions.
Often, people want to know if they can keep their house. The answer is, “It depends, which is why you should consult with an experienced lawyer.”
When we work together to compete your paperwork for filing, it is important that every creditor be listed on the paperwork along with an accurate mailing address. There are also certain non-dischargeable debts that will survive the Chapter 7 discharge, such as taxes, child support, and student loans.
An individual that files a Chapter 7 must complete a course of financial education from an approved provider in order to get his or her discharge. The class is generally several hours and is available online from several providers.
You will receive a discharge of your debts within 4-6 months after filing the Chapter 7 case.
Chapter 13 Bankruptcy
If you have a steady source of income but are having trouble paying your monthly debts, such as your car payment or credit card bills, a Chapter 13 may be the solution to your financial problems. A Chapter 13 Bankruptcy will reorganize your debt into one affordable monthly payment, payable over a number of months. This is referred to as your Chapter 13 payment plan.
A Chapter 13 can be used to discharge most debts such as:
- Signature loans (loans where no collateral was pledged),
- Payday loans
- Credit card bills
- Medical bills
A Chapter 13 can also be used to stop repossessions and foreclosures (for furniture, cars and homes).
Some debts must be paid in full through your plan. This type of debt is called “priority debt.” The most important priority debt includes:
- Back child support
- Alimony
- Certain taxes
Your Chapter 13 payment plan will be calculated based on the amount of debt you owe, the type of debt owed, and the amount of your income. All debts must be listed in your Chapter 13 plan. Your Chapter 13 plan payment may provide for the payment of your debt in as little as 36 months. However, based on your individual case and income, your plan may provide for the payment of your debts over 60 months.
Your plan must be submitted to the Bankruptcy Court for approval. Your creditors will have the opportunity to oppose the plan. I will represent you regarding these objections and the approval of your plan by the Bankruptcy Court. After all of the objections have been resolved and the court has approved your plan, you must make the monthly payments. If for any reason you are unable to make the payments, you should call me immediately so that I can determine what additional options you may have, which may include lowering your payment or extending the term of your plan.
In either case where you receive a discharge of your debt, the harassing phone calls and wage garnishments will cease. To determine if filing Bankruptcy is right for you, contact me to schedule a free initial consultation. Keller Law LLP is committed to helping clients become debt-free.