Bankruptcy Petitions and the Aftermath
Having to pay back credit card bills, medical bills, and personal loans can be difficult due to the current economic situation. Trying to stop repossession, foreclosure, or even wage garnishment can also be quite a challenge. Although a bankruptcy petition will stay on credit reports many years from filing, credit scores will still eventually improve. It is harder to find credit while you are bankrupt, getting a fresh start in life is something that a lot of people aspire for.
If you plan to file for bankruptcy or require preliminary bankruptcy information on how to file, give us a call. Hardworking and hands-on Pasadena bankruptcy attorneys can answer your questions about the legal process of filing bankruptcy.
This article focuses on bankruptcies and what happens after filing. It is divided into the following sections.
- The value of legal advice from someone experienced with bankruptcies
- Basics of liquidation and reorganization bankruptcy cases
- Bankruptcy petitions and what happens after filing
- What happens if you opt for a Chapter 13 petition for bankruptcy
- What happens if you opt for a Chapter 7 bankruptcy proceeding
- Making the most of Chapter 7 and Chapter 13 bankruptcy cases
- Getting legal help from a seasoned local attorney
The Value of Legal Advice from someone Experienced with Bankruptcies
If you are considering bankruptcy, it is best to seek legal assistance from an established bankruptcy law office. Bankruptcy attorneys will help document your eligibility to a bankruptcy trustee, who will then administer proceedings brought to court. Discuss your finances and debt reorganization plans, if any. This is also a good chance to clarify what can be done to have certain types of debt forgiven, be allowed to repay secured and unsecured debts while retaining your assets, or both.
Aside from helping you fill out bankruptcy forms and prepare the necessary paperwork and supporting documents, a good local attorney will be with you throughout the entire bankruptcy process. Formally submitting your bankruptcy petition is key if you wish to benefit from the automatic stay (and prevent lenders and debt collectors from contacting or harassing you). Additionally, your lawyer can help you go through the scheduled Meeting of Creditors and subsequent confirmation hearing. All these can be overwhelming, which is why getting reliable legal services is key.
Basics of Liquidation and Reorganization Bankruptcy Cases
There are different types of bankruptcy that you may choose from, depending on your eligibility. Under each type are different bankruptcy rules and requirements that you must be aware of before you can declare bankruptcy.
If you require debt relief and intend to file bankruptcy Chapter 7, a trustee will liquidate your non-exempt assets to pay off priority lenders. However, you must first pass the bankruptcy means test to be qualified to file bankruptcy under this chapter. Under relevant bankruptcy laws, your monthly income and living expenses will determine your eligibility as a filer.
Meanwhile, in a Chapter 13 bankruptcy, you will have the chance to restructure your overwhelming debts and bring current payments for secured debts (those with collateral). You can essentially avoid foreclosure and repossession by proposing a payment plan to the bankruptcy court. Here, the debt repayment plan will run for three or five years. Well-trained and diligent California bankruptcy lawyers can further explain these things to you.
Bankruptcy Petitions and What Happens after Filing
It is almost impossible to find someone who dreams of declaring bankruptcy for debt relief. However, if you are struggling financially, considering bankruptcy could be the best (or even only) option for you. Through the different bankruptcy chapters, countless people who were once bankrupt eventually had a fresh start in life.
What repels most people from bankruptcy proceedings is that they stay on your credit report for up to ten years. Indeed, filing for bankruptcy will affect your credit reports. However, rebuilding credit after bankruptcy is not as difficult as it sounds.
Filing for bankruptcy erases most of your unsecured debt. While recent tax debt, criminal fines and penalties, student loans, alimony, and child support are generally not dischargeable, a bankruptcy declaration can enable you to repay these debts on time.
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 Pasadena Bankruptcy Law to know how we can help.
What Happens if You Opt for a Chapter 13 Petition for Bankruptcy
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.
Filing 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.
What Happens if You Opt for a Chapter 7 Bankruptcy Proceeding
Credible Pasadena bankruptcy lawyers can look into your specific circumstances and help you decide on the debt relief option or filing chapter that is most suited for you.
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 suited for you.
However, for bankrupt individuals with a few assets whose problems include credit card debts, medical bills, payday loans, or other debts that the discharge may wipe out), filing Chapter 7 may be more ideal. 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.
Before one can file Chapter 7 bankruptcy forms and paperwork, he or she must first pass the bankruptcy means test. Here, the filer’s 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 in a manner according to the bankruptcy code.
Making the Most of Chapter 7 and Chapter 13 Bankruptcy Cases
A Chapter 7 bankruptcy case will likely have your unsecured debts (such as personal loans, medical bills, credit card bills, and other loans with no collateral involved) forgiven or discharged.
Meanwhile, a Chapter 13 petition for bankruptcy, meanwhile, will allow you to restructure or reorganize your finances. Proceeding with restructuring enables you to bring current payments for secured debts. A seasoned bankruptcy attorney in Pasadena can further explain the differences between these two.
Many debtors look into filing a bankruptcy petition to benefit from bankruptcy protection, which protects you from collection calls from creditors and harassment from debt collectors. In general, the automatic stay can also help you stop wage garnishment and stop foreclosure or repossession of your home, car, or other personal property. Due to many factors, however, every bankruptcy petition is unique.
There are certain cases where declaring bankruptcy is not the best choice and other debt-relief options must be considered. As such, before bankruptcy proceedings are finalized, it is best to have thorough discussions with your lawyer.
Explain to him or her all aspects of your finances, such as your regular income, total unsecured debt, total secured debt, and details on your tax filings. Be sure to mention if a petition in bankruptcy had been filed in recent years, or if a bankruptcy petition was dismissed because of failure to appear or comply with a court order.
Getting Legal Help from a Seasoned Local Attorney
If you are facing financial problems, promptly seek legal advice. Consumer bankruptcy can help an individual resolve debt under federal court protection. While most filers wish to wipe out their debts, different bankruptcy types are suited for other circumstances. Filing for bankruptcy is not easy, but it can open up a lot of opportunities.
Pasadena Bankruptcy Law specializes in the different types of bankruptcy filings and what filers can do to maximize their gain. A dedicated and hands-on Pasadena bankruptcy lawyer like Daniela Romero will gladly assist you with any legal matters concerning bankruptcies. Call our Pasadena bankruptcy law firm today.