Although many people think of Chapter 11 when the subject of bankruptcy is brought up, the type of bankruptcy filed most often is Chapter 7 Bankruptcy. In fact, if you are an individual and wish to get out of debt, Chapter 7, if appropriate for you, may get you that fresh financial start to life that you have been seeking.
Chapter 7 Bankruptcy Eliminates Many Common Debts
Chapter 7 Bankruptcy eliminates or, in legal terms, discharges most types of debts, including credit cards, medical bills, unsecured loans, many types of judgments resulting from law suits, money owed due to cars that have been repossessed and home mortgages that have been foreclosed.
Even if a debt is dischargeable, you may wish to continue paying the debt anyway. For example, if you have a home with a mortgage or a car with a loan, you must continue to pay the mortgage or car loan if you want to keep those items. Otherwise, they may be sold during the bankruptcy process to pay your creditors.
Some debts may be dischargeable under certain circumstances, such as income taxes and student loans. Whether they are dischargeable depends on the facts of each case.
Certain debts are never discharged in Chapter 7 Bankruptcy, such as court ordered child support, parking tickets and other types of civil or criminal fines.
You Do Not Lose Everything in A Chapter 7 Bankruptcy
A large fear of people contemplating bankruptcy is that they will lose everything they own and be left penniless. Fortunately, this is not true. When you file a Chapter 7 bankruptcy, the bankruptcy trustee, who represents the court, may take possessions and sell your property to raise funds for your creditors.
This sounds far harsher than it really is, because laws exempt specific items of your property from the trustee and allow you to keep them. As a result, in the vast majority of cases, there are no assets for the trustee to sell. In other words, you can keep many of your possessions and may not have to sell anything but still be able to eliminate much of your debt.
You Need the Advice of An Experienced Bankruptcy Attorney
The decision to file Chapter 7 Bankruptcy should be made after consulting with an experienced bankruptcy attorney. Many such attorneys provide a free initial consultation. When you meet with such an attorney, bring a list of your debts and information about your income and the assets that you own.
Several factors need to be considered when deciding if bankruptcy is right for you. These factors include the amount of money that you owe; the types of debts; the amount of your annual income; the number of members in your household; the amount of income earned by other household members; whether you own a home and, if so, the amount of your equity in the home; whether you are suing anyone to recover money; whether you have transferred any assets in the past 10 years; and the other assets that you own. When consulting with a bankruptcy attorney, non-bankruptcy alternatives should also be discussed.
If you decide to file Chapter 7 Bankruptcy, you need to select a bankruptcy attorney who has the right experience and attitude. It is important that you feel comfortable with the attorney who will represent you in such an important matter.
The Path to a Financial Reset
Once you have retained the services of a bankruptcy attorney and have gathered the information that your attorney has requested, you will take your online class regarding credit counseling.
After you take the credit counseling class, you will meet again with your bankruptcy attorney, who will prepare your bankruptcy petition. Your attorney will file the completed petition with the bankruptcy court and will mail notices to each of your creditors. You will then take a second bankruptcy class online regarding financial management.
You and your bankruptcy attorney will appear for the bankruptcy hearing that will occur about a month after filing the bankruptcy petition. At the hearing, you will be asked questions by the bankruptcy trustee. If all goes well, which is much more likely if you are represented by an experienced bankruptcy attorney, approximately 3 months later, you will receive your bankruptcy discharge, which will relieve you of your dischargeable debts, and you will be ready to start your new financial life.
Get an Individualized Plan Tailored to Your Legal Needs and Financial Circumstances
Bankruptcy can be complex. Your financial situation, while likely similar to others we have seen, still requires a unique plan of action. Going through a credit counseling company or debt management company can backfire. At Jeffrey B. Peltz, P.C., we will not force you into a one-size-fits-all bankruptcy. We listen to your story and your goals before providing you with clear options that work for you. With us, you will work directly with your lawyer in crafting a financial plan that benefits you, all at a reasonable cost.
Schedule Your Free Initial Consultation Today
Our Brooklyn law office is easily reached through public transportation, and we have evening and Saturday appointments available. We represent clients throughout New York City, Long Island, and the Hudson Valley. Call us at 718-625-0800 or reach us online here to speak to an experienced bankruptcy attorney.