Courts handle numerous cases related to debts and debt collection regularly. Most of these cases involve different types of debt, which could range from the common credit card debt to those that lead to foreclosure of personal property. Persisting debt problems have resulted in a higher number of individuals filing for bankruptcy. With so many bankruptcy lawyers out there, you must make sure you get the ones who can handle your bankruptcy filing properly.
You must consult with a bankruptcy lawyer to help you decide on the type of bankruptcy appropriate for your specific circumstance. Filing under the wrong bankruptcy chapter could lead to the dismissal of your petition.
Before the actual process, the job of bankruptcy attorneys is to discuss the different types of bankruptcy with debtors looking into this debt-settlement option. The two most common bankruptcy types are referred to as Chapter 7 and Chapter 13. This article will focus on Chapter 7.
When you file for bankruptcy Chapter 7, you surrender all your nonexempt properties to the assigned bankruptcy trustee. Chapter 7 bankruptcy is also referred to as liquidation because the trustee will liquidate your properties through sales. Bankruptcy trustees also manage the distribution of payments to priority creditors. After creditors receive the payment, whatever remains shall be divided among your creditors. In most bankruptcy cases, liquidated assets are seldom sufficient to pay for your unsecured debts. (This is why the lender of unsecured debt would prefer to have a debtor file for bankruptcy Chapter 13).
A Chapter 7 bankruptcy filer must meet the following criteria:
Knowledge of bankruptcy laws is crucial. Bankruptcies are evaluated very carefully. There are exceptions to the above and deciding whether an individual is qualified for bankruptcy under Chapter 7 requires a thorough review of financial records.
For some people, filing for bankruptcy is the best way to solve their debt problems. There are several factors why bankrupt individuals decide on proceeding with their bankruptcy filings. One of these is what is referred to as the automatic stay.
Once you proceed with your bankruptcy, your creditors will not be able to go on with their collection activities. Filing a bankruptcy petition prohibits a creditor or lender from collecting payments for what you owe them. (Note: Under bankruptcy law, a lender may file a motion in the bankruptcy court to have the automatic stay lifted). While this is not absolute, the bankruptcy protection that comes with the automatic stay is one of the common reasons why an individual decides to declare bankruptcy.
You may explore other bankruptcy options such as bankruptcy Chapter 13. Such will allow you to negotiate and reduce your debts through a payment plan. A Chapter 13 bankruptcy petition is also referred to as reorganization.
Under the bankruptcy code, a Chapter 13 filing must come with a proposed repayment plan. You must provide enough proof that you can repay your debts, fully or partially, after you declare bankruptcy. For a certain period, whatever is left after you cover basic living expenses shall be distributed by your bankruptcy trustee to your creditors. You must also first obtain permission from the bankruptcy court before you participate in certain activities beyond your ordinary business.
Debt relief involves complicated processes, but it is not impossible. Before you file bankruptcy papers, it is essential to hire someone knowledgeable about bankruptcy law and the bankruptcy process. Get a trusted bankruptcy attorney and have a fresh start at life. Contact us at our law firm for legal help and assistance.
