What is Bankruptcy?

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Bankruptcy is a liquidation of assets which will usually result in the discharge of unsecured debts.

There are two types of Bankruptcy filings the first one is a Chapter 7 filing. Some assets are exempt while other assets can be liquidated to pay back secured creditors while often unsecured debts are discharged. The second type is a Chapter 13 filing which is a court administered re-payment plan to creditors.

It allows you time to get back on your feet while maintaining a payment plan to creditors.

Who can file bankruptcy?

Any person residing, domiciled or having a property or place of business in the United States may file bankruptcy.

What is the Difference between Chapter 7 and Chapter 13 Bankruptcy?

Chapter 7 bankruptcy is a liquidation of assets, which usually results in a full discharge of all unsecured debts, secured debts like a mortgage or car payment are not discharged in this proceeding.

Any assets that you have which are not exempt will be liquidated by the bankruptcy trustee to pay creditors. A chapter 13 bankruptcy results in a repayment plan, and allows you to keep all of your assets as long as you can afford to make payments into the plan.

I have no assets.  Can I file a Chapter 7 instead of Chapter 13?

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There is “means test” which stops people with certain income levels from filing Chapter 7. Your income vs expenses are calculated and if you have enough disposable income to pay more than 25% of your unsecured debt, then you would need to file under Chapter 13.

An attorney can review your individual situation and expenses to see if you qualify to file Chapter 7.  Otherwise, you might be eligible to file Chapter 13.

Should I file bankruptcy to get rid of credit card debt?

Most often the answer is no, bankruptcy filing should be your last resort. Your homestead protection is almost unlimited outside of bankruptcy, filing to eliminate your credit card debt could place your home in jeopardy and places significant limits on the protection of your homestead.

If I am married, should we file a joint bankruptcy?

Married couples who are jointly liable on most debts should file a joint bankruptcy and will only pay a single filing fee. If only one spouse is liable on most of the debts, the indebted spouse may file an individual bankruptcy, and in most cases, it will have no adverse effect on the non filing spouse.

Will I have to take a credit counseling course?

New bankruptcy laws require all debtors to complete two education requirements. You must complete a credit counseling course prior to filing your bankruptcy petition and you must complete a personal financial management course before you will receive a discharge of your debts. Most courses are available online and cost less than $50.00.

If I file Chapter 13 will I be allowed to keep my home or Investment properties?

Under most circumstances, filing Chapter 13 would enable you to retain your home but most cases not your investment properties.

Can I transfer assets out of my name before filing Bankruptcy?

Bankruptcy is a court proceeding that you will do under oath and under penalties of perjury so transferring any asset is a bad idea.

Will this stop creditors from calling me?

Once our firm is hired by you to handle the bankruptcy, at that point you can inform any creditor that you have hired a bankruptcy attorney and most creditors will stop calling. Once the actual bankruptcy petition is filed, the creditors are forced to stop calling you and face serious penalties if they contact you.

What should I do next?

You should contact us right away to setup your free consultation to determine if Bankruptcy is the right option for you.