Bankruptcy Basics

As mentioned above, fling for bankruptcy and proceeding with restructuring will enable you to bring current payments for secured loans. This can stop foreclosure or repossession of collateral (such as your home, car, or other personal property), which is a common reason people opt to file for bankruptcy under Chapter 13.

Before declaring bankruptcy under this chapter, your monthly income must be regular, and your tax filings must be current. No Chapter 13 must have been filed in the last two years, no Chapter 7 filing must have been filed in the last four years, and no bankruptcy petition must have been dismissed in the last 180 days (for failure to appear in court).

If you filed for bankruptcy under this chapter, you would be given a repayment period of three or five years. Under pertinent bankruptcy laws, however, not everyone can proceed with filing Chapter 13. It is, in fact, sometimes referred to as wage earner bankruptcy because a low-income earner may not be qualified to file.

Advantages of a Chapter 7 Bankruptcy Proceeding

As mentioned above, if you have a lot of assets, generally dealing with secured debt, or if it would be possible for you to pay back some of what you owe to your creditors, a Chapter 13 bankruptcy petition may be a better option for you.

However, for bankrupt individuals with a few assets and whose problem debts include credit card debts, medical bills, or payday loans, filing Chapter 7 may be more advisable. It is also often recommended for filers whose problem debts exceed two-fifths of their annual income and cannot, therefore, pay off debts even with extreme measures.

If you are looking into filing Chapter 7, you must first pass the bankruptcy means test before working on your bankruptcy forms and paperwork. Here, your monthly income and living expenses will be taken into account. If you pass, your bankruptcy trustee will then facilitate the meeting of creditors, sell your nonexempt assets, and pay creditors.

Deciding Between Liquidation and Reorganization Bankruptcy Cases

Under relevant federal and state law are various bankruptcy rules and requirements that you must be aware of before you can declare bankruptcy. There are different types of bankruptcy that you may choose from, depending on your objectives and eligibility.

If you require debt relief and intend to file bankruptcy Chapter 7, your monthly income and living expenses will determine your eligibility as a filer. Essentially, you must first pass the bankruptcy means test, as specified by law. Only if one is qualified to file bankruptcy under Chapter 7 can a trustee liquidate your non-exempt assets to pay off priority lenders.

On the other hand, a Chapter 13 bankruptcy declaration is essentially useful if one wishes to avoid foreclosure and repossession. Here, a debt repayment plan that will run for three or five years is proposed to the bankruptcy court. A crucial step, however, is restructuring your overwhelming debts and bringing current payments for secured debts.

If you have any concerns related to the bankruptcy procedure, or if you are still unsure if it is best to file for bankruptcy, hire the best attorneys who will work closely with you. Call us at The Law Office of Jeffrey B. Kelly to know how we can help.

What Happens After Bankruptcy Petitions are Filed

What repels most people from bankruptcy proceedings is that they stay on your credit report for up to ten years. As mentioned, however, rebuilding credit after bankruptcy is not as difficult as it sounds. While declaring bankruptcy for debt relief is not an appealing scenario, it has already helped numerous bankrupt individuals. Through the different bankruptcy chapters, countless people who were once bankrupt eventually had a fresh start in life.

If you are struggling financially, considering bankruptcy could be the best (or even only) option for you. While recent tax debt, criminal fines and penalties, student loans, alimony, and child support are generally not dischargeable, other discharged debts through a bankruptcy declaration can enable you to repay other obligations on time.

The requirements, qualifications, and the entire bankruptcy procedure can be confusing and overwhelming. As such, it is best to get the legal services of a trusted and top-tier Northwest, Georgia bankruptcy attorney who can explain to you how to file correctly. Filing for bankruptcy is not easy, but it is something that can give you a fresh start in life.

How Debtors Can Benefit from Bankruptcy Proceedings

A Chapter 7 liquidation bankruptcy and a Chapter 13 reorganization bankruptcy are the two most common types of bankruptcy cases. While there are different bankruptcy forms and paperwork involved, they both protect the rights of the bankrupt filer against creditor harassment.

As part of the bankruptcy Chapter 7 process, trustees will have to liquidate all non-exempt assets. A bankruptcy trustee will manage the sales and will distribute the funds to creditors and lenders. It is not uncommon, however, that a bankruptcy case is a no-asset case.

When filing Chapter 13, on the other hand, one would need to complete a debt repayment plan. Based on the monthly income stated in the bankruptcy means test, this payment plan is meant to help the filer repay his or her obligations on time.

One of the advantages that you can look forward to when you file for bankruptcy is the automatic stay. This is a form of bankruptcy protection that can help you stop foreclosure and stop wage garnishment and foreclosure. After you file a petition in the bankruptcy court, the automatic stay shall take effect. Debt collectors would then be prohibited from harassing you, asking you to pay off what you owe.

How Creditors are Protected Under Bankruptcy Laws

Aside from credit counseling and a financial management course, one crucial part of a bankruptcy proceeding is the 341 Meeting of Creditors. If you file a petition in bankruptcy, you must be able to answer any questions related to your finances, income and living expenses, debts, and financial transactions. In complex situations where a creditor believes that the individual filing bankruptcy has committed fraud, objections will likely be made. 

If the creditor files a lawsuit to assess the non-dischargeability of a debt or objects to the entire bankruptcy filing, the filer will not obtain the court order for the discharge. Depending on the specifics of the bankruptcy petition, litigation can take six months (or even more). This is where legal representation from dedicated bankruptcy lawyers in Northwest GA will be extremely useful.

Additionally, the case can take even longer if you want to discharge student loans. For you to wipe out your student loan debt, filing a lawsuit and arguing that repaying the debt would cause undue hardship would be necessary. You would need to negotiate with the lender or argue your claims at trial. This may delay the entire bankruptcy procedure for a year or more.

Seeking Legal Help from a Dedicated Local Attorney

Due to the financial problems brought about by the current circumstances, a lot of individuals are having trouble with debt management. This is especially true nowadays since a lot of people have been negatively affected due to the pandemic. On top of being a global health crisis, a lot of people lost their jobs or businesses.

While not all of your debt problems will be eliminated when you file bankruptcy, it can help you eliminate and wipe out certain types of debt. Having medical debt, credit card debt, and most unsecured debts discharged through a Chapter 7 can free up a sufficient budget for you to pay back non-dischargeable debts. Alternatively, a Chapter 13 bankruptcy case can help you pursue debt settlement and slowly rebuild your financial future while keeping your assets.

Filing for bankruptcy allows you to have a fresh start with your finances. However, it is best to first consult with seasoned Northwest bankruptcy lawyers. Before filing bankruptcy, seek legal help from a trusted bankruptcy law firm. If you are struggling with debt and are considering bankruptcy, call our bankruptcy law firm in Georgia today.