When you decide to file bankruptcy, it usually means your financial situation looks hopeless. Despite what many people think, there is no shame in needing a second chance for a secure financial future. Bad things can happen to good people as the saying goes. In addition, sometimes people simply make poor financial decisions, and the result is they find themselves stuck in a financial morass.
The purpose of the bankruptcy laws is to legally give people that second chance they seek. Anyone who has fallen behind in payments knows that creditors can be diligent and persistent when it comes to collecting their money. Many of your creditors have large and powerful legal teams also that spend all of their time sending collection notices and filing lawsuits. When these kinds of debt collection tactics accelerate, the misery it creates can be devastating. This misery doesn’t just impact your finances, but it can also affect your work and your relationships.
So for many the decision to file bankruptcy is initially one of desperation. But once you meet with the attorney and complete the initial financial assessment forms, the first glimmer of hope is felt. When the bankruptcy notice is actually filed in court, the hope takes hold and becomes one of relief. With the filing comes a cessation of collections efforts enabling you to live a normal life once more.
If you see yourself in this scenario then it is time to consult with a bankruptcy attorney. The bankruptcy attorney specializes in filing bankruptcies under the various chapters and is an expert in the complexities of the law. At some point, you will have to meet with the court appointed trustee, but for most of the process your attorney takes care of any court required appearances and all of the process forms.
Filing bankruptcy is a powerful means of solving debt burdens that you incurred for a variety of reasons. The purpose of bankruptcy is not to enable people to avoid paying their debt, but rather to give people a means of eliminating debt that there is no hope of paying. In fact, chapter 13 requires a payment schedule be established in cases where people are able to pay off some of their debts generally within 5 years.
If you believe you should file bankruptcy, the first step is to consult with an attorney. The attorney will be able to tell you quickly whether you will qualify for filing under the bankruptcy laws. The bankruptcy is for honest people who have made honest mistakes. In some situations the debt is the result of unforeseen circumstances such as hospitalization, death or even a natural disaster.
When it’s time to file bankruptcy, the first thing you will discover is that hope is restored in your life. Everyone deserves a second chance in life!
It's possible to actually establish a court monitored debt repayment plan using a chapter 13 bankruptcy. This kind of bankruptcy allows you to still get the relief you need from collection calls, garnishments and lawsuits. In effect, you ask the court to intervene on your behalf with your creditors to get some breathing room. The repayment plan usually calls for listed debts to be repaid within 5 years.
Of course, the US bankruptcy court can do what it wants and in some situations a longer period of time is allowed. The measure used is the relationship of your current monthly income to your expenses. There are standard formulas used in order to determine eligibility for this type of bankruptcy. Any individual is permitted to file a chapter 13 as long as the secured and unsecured debts are under a certain amount. Your bankruptcy attorney will review all of your debts and categorize them in order to determine if you meet eligibility requirements.
When you file a chapter 13, you go through many of the same steps you would go through if filing a chapter 7. You have to complete a series of financial schedules which list your income and expenses. You also must complete a credit counselling course which teaches about budgeting and managing money. A court appointed trustee will review your documents and require you to appear before him or her and answer questions about your financial documents.
When you complete your financial information, you will have to reveal "all" in essence. You have to list your creditors, all of your income, any property you own and your monthly expenses. When the bankruptcy attorney files the bankruptcy, a stay is issued to creditors and that is when you will feel the first relief from collection efforts. You will have to work with your attorney to develop a reasonable repayment plan that is then submitted to the courts.
In a chapter 13 bankruptcy your various debt categories are handled differently. The court will establish the priority claims which must be paid first. Then the court will determine how debt secured with collateral will be handled in the repayment plan. Finally, the unsecured debts are included in the payment plan, but they do not have to be repaid within the 5 years. The point of the repayment plan is that you pay all excess income over reasonable living expenses to your debtors.
There are advantages to using a chapter 13 bankruptcy instead of a chapter 7. First and foremost, if your house has already gone into foreclosure, the process can be stopped. Back payments due on your house are included in the repayment plan which gives you time to catch up. In a chapter 13 bankruptcy it is also possible to lower your payments on your secured debts. There are many other advantages too, and your attorney will review them with you while deciding if a chapter 13 bankruptcy is the right choice in your situation.
This website uses cookies that are necessary to its functioning and required to achieve the purposes illustrated in the privacy policy. By accepting this OR scrolling this page OR continuing to browse, you agree to our Privacy Policy