Debt problems are not easy to deal with especially if it is the first time that you would encounter such an issue. There are a lot of misconceptions about declaring bankruptcy. However, with the help of bankruptcy attorneys, you may obtain a lot of benefits from filing bankruptcy. Bankruptcies give you various options to be able to pay all your debts from creditors.
A bankruptcy filing involves a complicated legal procedure. Here, a debtor files a bankruptcy petition to repay debts. Required paperwork and supporting documents are submitted to the bankruptcy court. The bankruptcy process may be difficult to understand, which is why it is not advisable to handle it alone. Before filing a bankruptcy petition, consulting with a bankruptcy attorney is crucial. Discussing your case with someone knowledgeable in bankruptcy laws is important to have a successful bankruptcy proceeding.
One of the main reasons why individuals declare bankruptcy is to have protection from creditor harassment. Once the court approves your petition, an automatic stay will be effective immediately. A bankruptcy stay protects filers from wage garnishment, foreclosure, and repossession. This will also prohibit any collection activities from your creditors when you file for bankruptcy.
Dealing with debt and financial problems can be extremely stressful. Filing a bankruptcy petition will help you have a fresh start and rebuild your financial future. There are things you might want to consider before filing for bankruptcy. These include the specific bankruptcy chapter and your eligibility for a certain bankruptcy case.
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Chapter 7 vs Chapter 13
There are different types of bankruptcy that you may file to obtain a bankruptcy discharge.
Bankruptcy Chapter 7
Chapter 7 or liquidation is a bankruptcy procedure wherein the trustee shall liquidate your nonexempt assets and allocate the funds to debt collectors. A bankruptcy trustee shall manage the payments to ensure that there will be no legal issues that will arise between the debtor and the creditor.
In some bankruptcy cases, you may be able to secure your properties depending on certain factors. To know whether you are capable of filing under this chapter, a bankruptcy means test is will be used. Under relevant bankruptcy rules, this chapter will look into your monthly income, living expenses, and the median income of the state. In case you are not eligible for Chapter 7, you may file for bankruptcy under Chapter 13.
Bankruptcy Chapter 13
When filing Chapter 13 or reorganization bankruptcy, you may be able to retain your home and vehicle as long as you are making payments regularly. If you choose to file Chapter 13, you will propose and submit to the court a repayment plan to pay off your creditors.
The payment plan will give you more time to pay all your debts. This will usually take three to five years. You must make regular monthly payments because failure to pay according to the agreement may result in the denial of your bankruptcy discharge.
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Dischargeable and non-dischargeable debts
Bankruptcy filings can wipe-out unsecured debts like medical bills and credit card bills. However, there are non-dischargeable types of debt. Child support, alimony, and tax debt, and secured debts generally cannot be eliminated when you file bankruptcy.
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What paperwork do I need for a consumer bankruptcy?
To obtain bankruptcy protection, the following documents are needed upon filing:
- Federal and state tax returns for the last two years
- Bank statements from your accounts for the last six months
- Pay stubs for the six months before a bankruptcy filing
- Completion of credit counseling
- Copies of car titles and deeds
- Credit report
- A complete list of monthly recurring expenditures
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Why do I need to hire a bankruptcy lawyer?
You should seek help from trusted and experienced bankruptcy lawyers. The bankruptcy procedure is a complex process and it will be difficult to manage it without legal help. Bankruptcy attorneys will help you throughout the proceeding, often until you rebuild your credit score.
If you do decide to file for bankruptcy, then it is possible to stop harassment, wage garnishment, and foreclosure. Through the help of our law firm, you can save your home and properties in these difficult times. Seek debt-relief and get rid of your overwhelming debt. Contact us at the Rollins Law Firm for a free consultation. Call 601-202-5101 for more information.
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