Do you feel that you are in over your head? That your debts are consuming you? Many people have turned to bankruptcy as a solution to their financial distress. Maybe to stop a foreclosure or a repossession of a car. Whatever the reason, bankruptcy can provide a fresh start; allowing you to rebuild your credit and get back on a healthy financial footing.

 DO I NEED A LAWYER?

You are not legally required to have an attorney file for bankruptcy; however, an experienced bankruptcy attorney will help you fully understand your options and avoid potential pitfalls. Problems that could result include losing your home or other property you are trying to protect, that you otherwise may have been able to protect had you sought out legal advice.

 WHAT ARE THE DIFFERENT TYPES OF BANKRUPTCY?

An individual filing for bankruptcy generally must decide whether to file for protection under Chapter 7 or 13, depending upon the circumstances. All debts must be listed, regardless of whether or not you wish to continue paying them.

Chapter 7 is the liquidation chapter.  A chapter 7 case typically remains open for six (6) months (from filing to final decree), with a discharge being entered within ninety (90) days of the filing of the petition.  You are entitled to exempt the value of certain assets from the estate in order to keep them, such as clothes, furniture, jewelry, cash, etc. There are additional exemptions that may be available and we can provide further advice to maximize your exemptions and minimize your risk. Chapter 7 is known as the liquidation chapter because all non-exempt property is liquidated (“sold”) to pay the creditors and the remaining debt is discharged.  The vast majority of cases are what are known as “no asset cases.”  Meaning, after your exemptions are claimed, there is no property left to be sold.

Chapter 13 is commonly referred to as a “wage earners” plan.  This chapter is primarily filed by someone whose house is in foreclosure, has substantial non-exempt assets, or income is above the median average. Under Chapter 13, a repayment plan is proposed to the creditors for payments from three (3) to five (5) years in length. A portion of your wages are garnished through your employer and paid to a Chapter 13 Trustee who administers the plan and pays your creditors.

IF I FILE FOR BANKRUPTCY, WILL I LOSE EVERYTHING I OWN?

No. Individual debtors may exempt certain property and keep it throughout the bankruptcy.  Additional exemptions, such as certain retirement and pension accounts, tools of the trade and personal injury awards are also available. We can explain how to list your assets properly and maximize your exemptions.

 WHAT HAPPENS AFTER I FILE FOR BANKRUPTCY?

Once you file, an “automatic stay” goes into effect, preventing creditors from pursuing any further efforts to collect the debt. This includes staying a foreclosure sale, wage garnishment, and even a civil court proceeding or trial.

In some cases, you may be able to recover money taken from you within the ninety (90) days prior to filing of your bankruptcy. It is important to note that if you are contemplating filing for bankruptcy, certain actions that you have taken to sell or transfer property within the last three (3) years may come into play in your case.  We can explain this further to you.

IF I AM BEHIND ON PAYMENTS ON MY HOME OR CAR, WILL FILING FOR BANKRUPTCY PREVENT FORECLOSURE OR REPOSSESSION?

If you are behind on these payments, you can file under Chapter 13 and propose a plan to repay the arrearages. If payments are not made to these creditors, they can take the property. Note however, that you must also continue to make the current monthly payments to keep the property.