Bankruptcy For Individuals
By now, you’ve probably scoured the Internet for your bankruptcy options – Chapter 7, Chapter 11, or Chapter 13. Many factors can impact which Chapter is right for you. Our experienced bankruptcy lawyers will guide you through the differences and help you make a fresh start. We’ll navigate you through filing the petition, attending the required hearings(s), and performing the necessary tasks to successfully emerge from bankruptcy.
What Is A Consumer Chapter 7 Bankrutcy Case?
Sometimes called a “fresh start” bankruptcy or “liquidation,” Chapter 7 bankruptcy is the best way to take control of your personal financial situation and start over by eliminating your debts. Chapter 7 can stay (or stop) all collection actions against you and allows for you to take charge of your financial plan going forward. In Chapter 7, you can eliminate your credit card debts, medical bills, payday loans, lawsuits, judgments, unpaid balances on repossessions or foreclosures, personal loans, guarantees, and more. Your Chapter 7 case will be finished in about 4-6 months.
Who Files Chapter 7 Bankruptcy?
People with overwhelming debts file Chapter 7 because they want to eliminate debts they can’t pay and want a new start at rebuilding credit and getting back into the financial mainstream. But there are some limitations on who can file Chapter 7. If you previously filed a bankruptcy, you may have to wait until a certain number of years have passed before filing again. Another qualifying issue for Chapter 7 may be your income. Means Testing may prevent you from using Chapter 7. Even if Chapter 7 isn’t available to you, relief still may be found in Chapter 13 (or maybe Chapter 11) depending on your income, expenses, and debt burden. It’s possible that you could feasibly complete a Chapter 13 repayment plan and use the advantages of Chapter 13 to restructure your debts and your debt payments—thus taking back control of your financial life.
Will My Debts Be Discharged In Chapter 7?
Most or perhaps all of your debts will be discharged in Chapter 7. As noted above, you can eliminate your credit card debts, medical bills, payday loans, lawsuits, judgments, unpaid balances on repossessions or foreclosures, personal loans, guarantees, and more. Of course, there are some limited exceptions to the Chapter 7 discharge of debts. Those debts which don’t get discharged are called “nondischargeable debts.” A few examples of nondischargeable debts are child and spousal support, most student loans, recent purchases of luxury items, and certain tax debts. The rules are complex regarding what can and can’t be discharged, so let our experience and knowledge work to your advantage.
Protecting My Property In Chapter 7
Every Chapter 7 bankruptcy case has a Trustee who is appointed to represent creditors. The Trustee’s duty is to liquidate or sell assets where possible to pay a dividend to the creditors. Our job as your bankruptcy lawyer is to protect you and your assets to the fullest extent of the law and to plan your bankruptcy case so that you’ll keep as much of your assets as possible.
What Is A Chapter 13 Bankruptcy Case?
While a Chapter 7 case is usually resolved and completed within a few months, Chapter 13 is designed for people that need to propose a longer term “Plan” to save their property or pay back debts over time—usually 3 to 5 years. Often referred to as “reorganization” or a “wage earner plan,” a Chapter 13 case allows a debtor to resolve many types of financial problems. For example, Chapter 13 is ideal for people who want to save their home from foreclosure, lower a car payment, consolidate debts, or save other valuable assets when Chapter 7 may not allow them to accomplish their financial goals. Chapter 13, like Chapter 7, can stay (or stop) all collection actions against you and allows for you to take charge of your financial plan going forward.
Who Files A Chapter 13 Bankruptcy?
Under the Bankruptcy Code, Chapter 13 is referred to as an “Adjustment of Debts of an Individual with Regular Income.” From the title, you can see that a Chapter 13 petition may only be filed by an individual (or a married couple), not a corporation or a partnership. Chapter 13 is also used by people who don’t qualify for Chapter 7 because of the “Means Test” (their income is too high). Sometimes Chapter 13 is used by people that have assets that are “non-exempt” (can’t be protected with available exemptions), so they propose a Plan that will pay their creditors the same as they would have received in a Chapter 7 case—and thus they get to keep their property. Chapter 13 also is useful to people who have unpaid tax debts, student loans, delinquent spousal support, or equalization payments from a divorce when these types of debts can’t be discharged or eliminated in Chapter 7.
The Chapter 13 Plan
The essence of Chapter 13 is the Plan. Everyone who files Chapter 13 must file a Plan with the Bankruptcy Court. The Court must formally approve your Plan before it’s effective; this process is called “confirmation of the Plan.” You should expect that your Plan will require payments over 3 to 5 years depending upon your income and other factors. But Plans in Chapter 13 may also be used to restructure your debts in some very useful ways. If Chapter 13 is your option, we can maximize its effectiveness for you.
Common Issues Solved By A Chapter 13 Plan
What if your home is in foreclosure? Your Chapter 13 Plan can be used to save your home. Of course, the Chapter 13 case typically stops the foreclosure at the time you file your petition, and if you stay current on the payments that come due after that—and you make your Plan payments—you can save your property.
Chapter 11 Bankruptcy For Individuals
Chapter 11 is available for individuals but isn’t as common as Chapter 7 and Chapter 13. If certain conditions exist which disqualify you from filing a Chapter 7 or Chapter 13 bankruptcy, we can navigate you through the complexities of a personal Chapter 11 filing.