Bankruptcy

Bankruptcy is a federal law that allows protection to people owing money they cannot pay. There are two types of bankruptcy proceedings. For individuals and small business owners there are Chapter 7 and Chapter 13. Both are designed to relieve the debtor of the pressure of debt collection. If a person has no income left after his reasonable monthly expenses, they may be a candidate for a Chapter 7 Bankruptcy discharge. A discharge is an order of the Court permanently preventing any further collection efforts. The other type of bankruptcy is a reorganization and repayment plan. There are several types of reorganizations. The most widely used is Chapter 13. It allows various types of debt to be restructured and paid over as many as sixty months. A discharge is only received after at least some of the debt is paid.

Do it yourself?

You are not required to hire a lawyer to file a bankruptcy. The law allows anyone to represent themselves in Court. Some bankruptcies and the forms appear simple on the surface. Typing services and others advertise they will help you complete the bankruptcy forms and schedules, but are unable to assist you with advice. They also will not be in Court with you to help you. The problem with attempting a do it yourself bankruptcy is the risk one takes. If a bankruptcy is done improperly, assets can be lost, discharge of debts denied, and even in extreme cases, Federal criminal charges brought.

Small Business Bankruptcy

In many situations a business may continue to operate in bankruptcy. This is particularly true in a Chapter 13 bankruptcy.

IRS collection Efforts

The Internal Revenue Service is subject to the Automatic stay provisions of the Bankruptcy Code. IRS collection activities, even levies, must stop when a bankruptcy is filed. Taxes that are not dischargeable can be restructured and paid over sixty months. It is important to fully review any outstanding tax liabilities before a bankruptcy is filed. Sometimes the difference between owing taxes and having them discharged is knowing the correct time to file.

Future Credit

Most people receive credit card solicitations within months after filing a bankruptcy. Home loans usually become available after usually two years, vehicle loans are available even sooner. The downside is that you will initially be paying higher interest rates and down payments.

Home Foreclosure

The automatic stay provisions of the Bankruptcy Code prevent any creditor from taking action, including foreclosure and repossession. A Chapter 13 Reorganization is designed to restructure mortgage arrears. The bankruptcy needs to be filed before the foreclosure sale takes place. The sale takes place on the first Tuesday of each month at the county courthouse. Once a Chapter 13 is filed, the debtor must resume regular mortgage payments and be able to pay the Chapter 13 Plan payment.

Creditor Rights

Creditors also have rights in bankruptcy court. We represent a variety of creditors in Chapter 7 and Chapter 13 Bankruptcies.