Chapter 7 Bankruptcy
A Chapter 7 bankruptcy is the most commonly filed bankruptcy. In addition, most of these are "no-asset" cases. What this means is that the debtor has no assets to liquidate. You may have assets but they are exempt by your state's exemption laws. In these cases, your attorney files the petition for bankruptcy and related schedules on your behalf. Once the petition is filed, an automatic stay goes into effect. Once the automatic stay is in effect, your creditors are prohibited from taking any action to collect from you. The automatic stay will also stop most current garnishments (except for family support orders). You will receive a notice to appear at what is referred to as a "341 hearing" or meeting of creditors. At this hearing, the trustee wants to establish your financial situation under oath. Your creditors may or may not appear (most do not). If there are no issues, you have no assets to sell, and have been truthful on your pleadings, this will generally be the only hearing and your case will be discharged within three to six months after filing.
Many people who would qualify for a Chapter 7 Bankruptcy are currently receiving their 3rd stimulus payments and tax refunds. These most recent Stimulus funds are not protected from creditors who may freeze your bank accounts to pay certain creditors. Also before you use the funds to pay off a small amount of your debt, we recommend that you consider whether given your circumstances would be better to file bankruptcy. So before a creditor freezes your funds or you decide to pay off a small portion of your debt, please seek legal advice.
My office is currently offering simple Chapter 7 Bankruptcies starting as low as $995.00 (which includes the filing fee). Your only additional out-of-pocket expense is a relatively low cost credit counseling classes as required by the courts. You may use your stimulus payment or tax refunds to pay your fees today. Our office also offers free consultations to discuss your options and determine whether bankruptcy is right for you.
Chapter 13 Bankruptcy
A Chapter 13 Bankruptcy involves regular payments to the trustee to pay the creditors based upon the Bankruptcy plan submitted to the court. This type is used when an individual has assets such as a house that are above the exemption levels and they do not wish to liquidate. Also, due to the change in Bankruptcy laws in 2005, if a person or couple wishes to file a Chapter 7 Bankruptcy, they must meet the "means test". The first step is to determine if your income is under the state median income for a household of your size. For example, currently for a one-person household, the median income in Indiana is $51,689.00 annually. However, even if you do not meet the income level, there is still further calculations based on you individual circumstances that may qualify you for a Chapter 7 bankruptcy. Your best course of action is to schedule a free consultation with a bankruptcy attorney and find out what your options are.
If you do not qualify for a Chapter 7 Bankruptcy, or have too much equity in assets such as your home, a Chapter 13 bankruptcy is another option. In a Chapter 13, you and your attorney will develop a plan which requires a regular payment to be made to the trustee, who then pays your creditors specified amounts. Secured creditors are likely to be paid in full. Your unsecured creditors will get the remaining funds from your trustee payments in a pro rata share. Your payment will be established based upon your income and local and national standards for costs and expenses.
My office offers a low down payment with the remainder of the fees rolled into your Chapter 13 plan.
This is some general Bankruptcy information. For a further information regarding the specifics of your situation, please schedule your free consultation by emailing Hildebrand Law Office at firstname.lastname@example.org or calling 574-303-6578 today.