Law Office Of Sandra David Brennan
BANKRUPTCY
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Bankruptcy is a legally determined inability to pay one's debts. Upon completion of a bankruptcy the debtor receives a financial "fresh start." You may be able to cancel your debt, stop collection calls, and get a fresh financial start.
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There are 4 types of bankruptcy filings available to consumers: Chapter 7, 11, 12, and 13.
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A chapter 7 bankruptcy is the most common type of bankruptcy. This type of bankruptcy entails the liquidation of one's non-exempt assets and distribution of one's liquidated assets to satisfy one's debt.
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Chapter 11 - is known as “reorganization”, and is used by a few businesses and a few individual debtors whose debts are very large.
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Chapter 12 - is reserved for family farmers.
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A chapter 13 bankruptcy allows the debtor with a consistent income to keep one's assets and arrange a payment arrangement to satisfy one's cerditors within a desiganated time frame. This time frame ranges from 3 to 5 years.
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Most people filing for bankruptcy protection will want to file under chapters 7 or 13. Either type of case may be filed individually or by a married couple filing jointly.
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Each individual's circumstances determine the legal options that are available. In consideration of this, our office offers a free consulatation to devise a strategy custom to each financial situation. There is no obligation during this consulation. Knowing your legal options is an important step towards the relief at the end of the tunnel. To every financial proplem, legally there is an answer, and having an answer and a plan is step one of what can be day one of the rest of your life.
Frequently Asked Questions About Bankruptcy
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What were the recent changes in bankruptcy law? In 2005 congress passed legislation that changed the bankruptcy laws. The goal of the legislation was to make it more difficult for debtors to file for a chapter 7 bankruptcy and curb the erroneous bankruptcy filings by adding various criteria to which the debtor must meet.
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Who can file for bankruptcy? Anyone who lives in the United States or has a place of business in the United States.
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Do I have to get rid of all my property? No! In a chapter 7 case, you can keep all property that the law says is “exempt” from the claims of creditors. You can chose between your exemptions under state law or under federal law. In many cased the federal exemptions are better. Also, keep in mind that the amounts of the exemptions are doubled when a married couple files together.
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Will all of my debt be relieved after I file for bankruptcy? Bankruptcy will relieve most of your debt.
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What debt will not be relieved?
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Can I own anything after bankruptcy? YES!!! Many people believe they cannot own anything for a period of time after filing for bankruptcy. This is not true. You can keep your exempt property and anything obtained after the bankruptcy is filed. If, however, you receive an inheritance, a property settlement, or life insurance benefits within 180 days after filing for bankruptcy, that money or property may have to be paid to your creditors if the property is not exempt.
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Can I file bankruptcy without an attorney? Although it is possible for some people to file a bankruptcy case without an attorney, it is not a step to be taken lightly. The process is difficult and you may lose property or other rights if you do not know the law. It takes patience and careful preparation. Chapter 7 cases are easier, but very few people have been able to successfully file chapter 13 cases on their own. Please keep in mind that the law often changes. Each case is different and as a result the information on this website is meant only to give you general information and not to give you specific legal advice. If you are contemplating bankruptcy or are having financial difficulty please feel free to contact our office and we will be happy to schedule a free consultation with an attorney to devise a legal strategy that works for your particular financial situation.
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Does filing for bankruptcy mean I have to go to court? For most bankruptcy filings you only have to go to court once. If you retain an attorney, the attorney will be present at this court hearing. This proceeding is referred to as a Meeting of the Creditors. This court proceeding is not a daunting process, rather it is fairly simple and straightforward. You must answer a few questions about your financial situation, but having the paperwork properly prepared is most of the battle.
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What circumstances could arise that would cause more than one court appearance? It is hard to predict all of the circumstances but an example of a commmon need is if you choose to dispute a debt.
a) Money owned for child support or alimony, fines, and some taxes;
b) Debts not listed on your bankruptcy petition;
c) Loans you got by knowingly giving false information to a creditor, who reasonably relied on it in making you the loan;
d) Debts resulting from “willful and malicious” harm;
e) Student loans owed to a school or government body, except if the court decides that payment would be an undue hardship;
f) Mortgages and other liens that are not paid in the bankruptcy case (but bankruptcy will wipe out your obligation to pay any additional money if the property is sold by the creditor).