Obtaining a Discharge in a Bankruptcy Case: What You Need to Know (Quick Prep)
Be prepared with a list of questions to ask: Does the attorney recommend Chapter 7, 11 or 13? What other options might you have? How many bankruptcy cases similar to yours has the attorney handled? Does the attorney usually represent debtors or creditors? What problems does the attorney foresee with your case? What will the attorney charge to take your case? Share your financial information with the attorney.
The Bankruptcy Discharge And Beyond: What To Do After Your Bankruptcy
When you go to your initial consultation, take with you the paperwork and copies that you have prepared. Try to have it in an organized fashion, so the attorney will be able to review it quickly and make sense of your overall finances. Select an attorney to represent you. Eventually, you will need to choose an attorney to represent you. You should base your decision on the strength of recommendations that you have received from other people, as well as on your own opinion from your initial meeting.
More expensive attorneys are not always better, so consider what you will get for you money when you make your selection. Select a bankruptcy chapter. Filing bankruptcy is a general term that applies to several different formats, called "chapters.
Bankruptcy: Is It the Right Choice for You?
You may wish to consult with a bankruptcy attorney to review the appropriate one for your circumstances. Chapter 7 bankruptcy is generally the simplest. This is referred to as "liquidation. Any debts that cannot be paid are discharged, so you are never responsible for them. Most people who choose Chapter 7 have few, if any, non-exempt assets. To file Chapter 7, you must meet an eligibility means test. See the next step for details. Chapter 11 bankruptcy is called "reorganization. Filing Chapter 11 bankruptcy allows the business to continue operating but reorganize itself to reduce costs.
Chapter 12 bankruptcy is limited specifically to individuals or corporations that derive most of their income from farming. Chapter 13 bankruptcy is sometimes called the "wage earner" bankruptcy. This is for individuals who have regular income and can use some of that income to make a partial payment over time to creditors. Calculate your eligibility for Chapter 7 bankruptcy. Before you can file Chapter 7, you must demonstrate that you pass the "means test.
If your income is high enough, you may be required to select Chapter 13, to pay down at least some of the debts that you owe. Each state sets its own "median income level" test, which is based on family size. If your family income is lower than the state median level, you are automatically eligible to file Chapter 7. If your family income exceeds the median income level test for your state, you may still be eligible for Chapter 7. You need to complete the means test, which compares your income to your monthly expenses. If your disposable income exceeds certain levels, you may be directed to file Chapter To conduct the means test, meet with a bankruptcy attorney.
Alternatively, you may be able to search online for "bankruptcy means test" and find several examples that have been posted by attorneys or financial advisers.
Think about the impact to your credit rating. Filing bankruptcy is going to have a negative effect on your credit rating.
How to Prepare to File Bankruptcy (with Pictures) - wikiHow
However, you have to realize that all the unpaid debts have had a negative impact as well. Avoiding bankruptcy and paying your debts is, obviously, the best thing you can do for your credit rating. Buy Filing for Chapter 7 Bankruptcy: Get free shipping on law books.
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The Paperback of the Filing for Chapter 7 Bankruptcy: But if that is not possible, understand that a bankruptcy filing will have some immediate positive effects. Upon receiving your discharge, you will have no outstanding debts. This may help you to make a more informed decision about whether filing for bankruptcy makes sense for you. We assume that you are a low-income client who may not be able to afford a lawyer. If you can afford to speak with a lawyer about whether you should file for bankruptcy, we encourage you to do that.
If you cannot afford a lawyer, here are some other possible resources:. Bankruptcy is a process that helps you to resolve your debts if they have become unmanageable. If you have a very low income and decide to file for bankruptcy, you will probably file under ''Chapter 7'' of the law. This means that you will turn over to the Bankruptcy Court all of your property that is not protected by law. This property will be used to pay your creditors. If you have very little property, all of it may be protected so that you will not lose it.
How much your creditors will get in this process depends on how much your unprotected property can be sold for. During this process, the court "discharges" you from certain debts, meaning that you will not have to pay them. When you file a petition for bankruptcy with the Bankruptcy Court, all collection actions against you automatically stop. Any court judgment handed down before you filed for bankruptcy cannot be enforced against you or your property.
This is called an "automatic stay. This is what you are seeking when you file for bankruptcy. In the typical case, about four months after your case is filed, your unsecured debts will be forgiven, or discharged. This discharge does not apply to secured debts and does not apply to "non-dischargeable" debts. Debtor is a person who owes debts; in a bankruptcy proceeding, you are the debtor. Creditors are persons or businesses that have loaned you money or who provided goods or services to you on credit. Secured creditor is a creditor who has a legal interest, called a ''lien,'' in a piece of property.
If you default on your loan agreement, that creditor can take steps to repossess or foreclose on the property. A bank that gives you a home mortgage has a ''secured interest'' on your home. Usually, a lender on a car purchase will take a secured interest in the car. Unsecured creditors are people to whom you owe money but who do not have any legal interest in your property. These creditors include credit card companies, doctors and hospitals who do not have a court order against you. These "unsecured creditors" can become "secured creditors" by suing you, getting a court judgment and then placing a lien on your property.
Equity is the value of your interest in a piece of property. Exempt property is property that the law protects from your unsecured creditors. Exempt income is a small amount of regular income that the law protects from your creditors. A secured creditor has a lien, or legal claim, on your property. This serves as a notice to any future buyer that you do not own the property free and clear. In some cases, this lienholder can repossess or foreclose and force a sale of your property so that he can be paid on the debt from the proceeds of the sale.
Liens can be ''voluntary'' or ''involuntary. You incur an ''involuntary'' lien when a court orders that a creditor has a legal claim on your property or a workman puts a lien on your property. Chapter 7, or liquidation, bankruptcy. This is the type of bankruptcy petition that is usually filed by a person who is not able to pay his existing debts. Chapter 13, or repayment, bankruptcy. This type of bankruptcy can be used by someone who has a regular income and who can pay some or all of her debts over a period of 5 years or less.
The debtor seeks a court-supervised repayment plan that she can afford. Chapter 12, family farmer and fisherman bankruptcies. Similar to Chapter 13, this chapter can be used by a farmer or fisherman to pay off debts over a period of time. Chapter 11, or reorganization. Primarily used by businesses to re-organize.
Although individuals can also file this kind of petition, it is probably the most complicated; you would definitely want to get a lawyer to help you with this type of filing. Generally, going through bankruptcy helps people with debts get a fresh start. However, many people have false ideas about how it can help them. Before you decide that you need to file for bankruptcy, you should know some of the basic rules about what it can and cannot do for you. This depends on your situation. If you have a regular income that allows you to repay the debt on your house, you may be able to work out a deal with your lender to save your home.
You may want to file under Chapter 13, to seek help from the court. Try to speak with a lawyer right away. Do this as early as possible, before the situation has gone too far.
How soon after bankruptcy can you get new credit cards? - www.newyorkethnicfood.com
On the other hand, if you don't expect to be able to catch up on your payments in the foreseeable future, filing for bankruptcy will probably not help you to save your home. Your secured debt is not automatically discharged in bankruptcy. A Chapter 7 filing will temporarily stop the foreclosure, but after the "automatic stay" ends, you will be back in the same position. Try to get a lawyer to help you with a threatened foreclosure. To learn more about foreclosure, go to Home Foreclosures. Their only income is Social Security and they have a lot of credit card debt that they can't catch up on.
This couple would have been much better off filing for a Chapter 7 bankruptcy before the spouse's death. After the spouse's death, the trustee would probably have to liquidate the house to pay the creditors. You may be getting further behind because you are not taking advantage of all available tax credits and income supplements.
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If you have filed for bankruptcy under Chapter 7 within the last 8 years and got a discharge, you cannot get a new Chapter 7 discharge now. You are barred from filing under Chapter 13 if you got a discharge under Chapter 7 within the last 4 years or if you concluded a prior Chapter 13 case within the last 2 years. If you have any old debts that pre-date an earlier bankruptcy filing and were not discharged then, you cannot get them discharged now.