Bankruptcy
When the bankruptcy petition is filed an automatic stay will go into effect, which prohibits creditors from taking action to collect their claims outside of the Bankruptcy Court. This prevents creditors from filing suit against debtors, or foreclosing upon or repossessing any property. It is essential, of course, that your attorney is told of any threatened lawsuits, foreclosures, or repossessions, as well as all pending lawsuits or other actions so that your attorney can make sure that the creditors and their attorneys are notified, and the action stopped. The debtor is required to file schedules of assets and liabilities, including current income and expenses, and a statement of financial affairs. A husband and wife may file a joint petition, or a spouse may file individually. Joint petitioners pay only one filing fee. A bankruptcy trustee is appointed when the case is filed. The trustee's duties are to examine and verify the accuracy of the debtor's bankruptcy papers and to identify assets that are not exempt. A "meeting of creditors" is held about 30-45 days after the petition is filed. The debtor must attend the meeting, and if a husband and wife filed jointly, both must attend. The debtor must bring a government issued picture I.D. and their social security card to the meeting. Creditors may appear and ask questions regarding the debtor's financial affairs and property, but creditors rarely attend. The trustee conducts the meeting, and the debtor must cooperate and provide the records the trustee requests. In order to expedite the filing of your bankruptcy, please complete the bankruptcy questionnaire.
Chapter 7
Chapter 7 cases are commonly referred to as straight bankruptcy or liquidation cases, and may be filed by an individual. Under Chapter 7, the debtor is allowed to claim certain property exempt. As a result the debtor gets a discharge, which means that the debtor does not have to pay certain types of debts. A Chapter 7 bankruptcy will discharge all, or nearly all, of a debtor’s debts. However, some debts, such as child support, most taxes, and debts incurred through fraud and misrepresentations, may not be discharged. Likewise, if any obligations are secured by real property or personal property (such as a house or car), you will need to pay these debts, or some portion of them, in order to keep the property. The bankruptcy court clerk issues the discharge after the first date set for the creditors meeting. A copy of the discharge is mailed to the debtor and all the creditors listed in the debtor's schedules.
Chapter 13
Chapter 13 is designed for people with regular monthly income from a job or retirement. Chapter 13 provides you with a way to consolidate all of your debts into one payment plan that you can afford. In most cases, you can reduce your monthly payments in half and get yourself out of debt in 3 to 5 years. Chapter 13 provides you a way to get out of debt by paying your creditors what you owe while interest rates are regulated and they are not allowed to contact you except through your attorney. Provided that your payments are made pursuant to the plan and that the payments are sufficient to pay all of the claims under the plan, you will receive your discharge at the end of the plan period. It is sometimes necessary to make modifications of the plan throughout the course of the bankruptcy for various reasons. We can handle those matters as they arise. If you have any difficulty in making any plan payment, be sure to contact your attorney so that you can set up an extension or otherwise handle the problem.
