Are you behind on your bills? Are you about to lose your car or home? Do you owe back taxes? If so, you still have options. Bankruptcy can eliminate or restructure your debt so that you can get your life back on track. We can help you determine what steps you need to take and whether you need to file for Chapter 13 or Chapter 7 bankruptcy. We can help put you on the road to a promising financial future. You will have direct access to your lawyer and receive personalized counsel when exploring your bankruptcy options.
Chapter 7 is known as “straight” bankruptcy or a liquidation.” It allows a debtor to eliminate most or all of their unsecured debt and make a fresh financial start. To do this, the debtor files a petition with the court asking to discharge the debts. Chapter 7 is called a liquidation because the bankruptcy trustee can liquidate or sell the debtor’s non-exempt assets. In reality, most Chapter 7 filers get to keep all of their property as most filers do not have “non-exempt” assets so there is really no actual liquidation of the debtor’s assets. The proceeds from the non-exempt assets are used to cover part of the debts. You can keep certain secured debts such as your home, car, or furniture by re-affirming the debts. Of course, some debts cannot be discharged in a Chapter 7 proceeding such as alimony, child support, fraudulent debts, certain taxes and student loans.
Chapter 13 is called a reorganization bankruptcy because it allows a debtor to repay all or a portion of their debt over a three to five year period unless exempted by the court due to hardship. It requires a debtor to file a plan with the bankruptcy court proposing how the debt will be repaid to creditors. Depending on what the debtor can afford, some debts must be paid in full, some will be paid partially and others will be discharged and not paid at all. Chapter 13 bankruptcy can stop a foreclosure action and compel the lender to accept a plan where you make up the missed payments over time while staying current on your regular monthly payments. With Chapter 13, you can “cram down” secured debts that are worth more than the property that secures them. This means that you may only have to pay for the actual value of the property and the rest of the loan is discharged. The caveat, however, is that you cannot cram down a secured debt if you purchased the property within one year of filing for bankruptcy. A Chapter 13 can also allow you to keep your non-secured property. You don’t have to give up any property in a Chapter 13 because your income is being used to fund the plan. Because your income is being used to repay some or all of your debt, the court must be satisfied that you can meet the financial obligations with your current income.