Bankruptcy
The Federal Bankruptcy Code is designed to help individuals and businesses get a “financial fresh start” from overwhelming debt. There are six (6) types of Bankruptcies allowed under the Federal Bankruptcy Code and Aldrich Legal Services, PLLC handles the two (2) most common types available to individuals: Chapter 7 and Chapter 13.
Chapter 7 bankruptcy cases are usually referred to as Liquidation cases. This is where a court-appointed trustee takes over the debtor's assets, reduces them to cash, and makes distributions to creditors, subject to the debtor's right to retain certain exempt property and the rights of secured creditors. When a debtor files a Chapter 7 case an Automatic Stay is created which prevents creditors from starting or continuing certain collection efforts. Debtors who are engaged in business, including corporations, partnerships, and sole proprietorships, may prefer to remain in business and avoid liquidation. Such debtors should consider filing a petition under chapter 11 of the Bankruptcy Code. Aldrich Legal Services, PLLC’s goals are to help Chapter 7 debtors make a “financial fresh start” and ensure that creditors are paid.
Chapter 13 bankruptcy cases are referred to as Adjustment of Debts of an Individual With Regular Income. It is often appropriate for a debtor who has a regular source of income. Debtors may prefer a Chapter 13 bankruptcy as opposed to a Chapter 7 bankruptcy because it enables the debtor to keep a valuable asset, such as a house, and because it allows the debtor to propose a "plan" to repay creditors over time – usually three to five years. Chapter 13 bankruptcy is also used by consumer debtors who do not qualify for chapter 7 bankruptcy relief under the means test.
Aldrich Legal Services, PLLC is committed to helping individuals to determine the best course of action and provide legal assistance from the initial consultation through the end of the bankruptcy process. Call us today for a free consultation!
Pursuant to 11 USC 528 we are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
Q: Why should I consider filing for Bankruptcy?
A: Many people find themselves in a financial crisis, often times due to conditions beyond their control. Regardless of the reason, the Federal Bankruptcy laws have been put in place to give people a “Financial Fresh Start” or an “Adjustment of Debts”. Either way, the moment you file for Bankruptcy the Court issues an Automatic Stay that prevents creditors from pursuing and otherwise harassing you. There are fees that have to be paid up front to file a Bankruptcy but they are minor compared to the debt most people contemplating Bankruptcy are facing.
Q: What is the difference between Chapter 7 Bankruptcy and Chapter 13 Bankruptcy?
A: Chapter 7 Bankruptcy, often called a “Financial Fresh Start” allows a person or business to completely wipe out all dischargeable debts. Some examples of debts that cannot be discharged in a Chapter 7 Bankruptcy are Student Loans, Child Support and Federal Tax Liens. Almost all other types of debt can be completely wiped out through this process. This is why a Chapter 7 Bankruptcy is attractive to many people. There is a “means test” to determine whether you can qualify for Chapter 7 Bankruptcy. If an individual cannot qualify for a Chapter 7 then they have to file a Chapter 13, which is commonly called an “Adjustment of Debts”. This is because you enter into a plan wherein you pay-off creditors, at a reduced rate, over a period of time, usually 3-5 years.
Q: What will happen to my home? Car? Etc if I file for Bankruptcy?
A: You must fully disclose all assets when filing for Bankruptcy. You often get to exempt certain items from the Bankruptcy all together such as your primary residence, primary automobile, household goods, furniture, clothing etc. You also have the option of re-affirming any debts that you want to keep paying on. This means that rather than wiping out a debt and losing the asset, such as a second automobile, you could choose to re-affirm the debt and keep it out of Bankruptcy.
Q: How will filing for Bankruptcy affect my credit?
A: A Bankruptcy filing can appear on your credit for up to 10 years. What most people do not realize though is that their credit is already taken hits from the various creditors that they owe money to. That negative reporting will not stop as long as that debt is owed and the creditor keeps reporting it. Many creditors will see a Bankruptcy and realize that a clean slate means you are more likely to be able to pay back the credit given. This means that creditors may actually prefer to see a Bankruptcy filing in the past as opposed to a series of negative reports by creditors showing non-payment.
Q: Can I file for Bankruptcy if I am married?
A: If you are married your spouses income is taken into consideration regarding the means test for a Chapter 7 Bankruptcy. Regardless though, even if you are married, you can file Bankruptcy individually or jointly, whichever is best for you and your situation.
Q: I have always tried to pay my debts and feel guilty about filing for Bankruptcy. Am I a bad person for filing Bankruptcy?
A: I have seen all types of people from all walks of life sitting in my office seeking the help of the Bankruptcy laws. Things happen in our lives that we often cannot control or did not intend to happen. An unexpected injury that makes us miss work, a medical situation, a job lay-off, adjustable rate mortgages, bad financial decisions, a family member in need are just to name a few. These Bankruptcy laws have been put in place by our government to help people and businesses when they are in a financial crisis. You need to take a look at your own financial situation and determine if filing for Bankruptcy is the best for you and your family. If it is, then we at Aldrich Legal Services, PLLC can help.
|
