Bankruptcy is a legal procedure that helps folks reduce or eliminate debts that were incurred prior to the filing of a bankruptcy petition. The objective is to get as much relief from those debts that are making it difficult to keep up with your living expenses. Once you file for bankruptcy, you are protected from creditors and debt collection agencies for the duration your case. The phone calls and collection letters stop!
As general rule, student loans, domestic support obligations, and certain taxes do not get discharged in bankruptcy. However, once you complete your case, the court orders the discharge of your those debts that are not secured by property, such as medical bills, credit card debt, and judgments. Bankruptcy also discharges any deficiency on repossessed cars or homes that were sold in foreclosure.
Bankruptcy provides options for businesses and consumers. Consumer bankruptcy is generally categorized into two types: liquidation and reorganization.
Chapter 7 – Liquidation
First off, liquidation does not mean that you have to give up your car or your personal property. In most cases, your personal property is exempt under state law – meaning that you can keep you car, your personal possessions, and even your house.
A Chapter 7 is relatively straightforward, however filing a case is complicated and hiring an experienced chapter 7 bankruptcy lawyer is by far the best way to get achieve your goals. In the vast majority of cases, the cost of hiring Dennery Law is dwarfed by the amount of debt that can be eliminated through bankruptcy. The process takes 4-5 months from the date of filing to obtaining a fresh start.
Chapter 13 Reorganization.
Chapter 13 is the way to go when you have regular income and have fallen behind on your mortgage or car payments. In a chapter 13, you can stabilize your financial affairs, and repay some or all of your debts with a repayment plan that is manageable. The downside is that you will have little to no extra cash until you complete the repayment plan, which can last anywhere from 3-5 years. The upside is that you can catch up on your late mortgage payments, keep your house and pay the attorney fees as part of your plan.
Legal representation is crucial in Chapter 13 as only 33% of filers complete their plan of reorganization. We take the time to have an honest discussion about your situation and offer creative solutions that suit your specific needs.