Financial issues can create enormous stress. If you are having trouble meeting your financial obligations and debt payments, it’s important to understand that you may have significant options available for you. The sooner you take action to resolve the issue, the better off you will be. Too many people are afraid to face their financial problems and end up doing more damage by waiting to speak with a lawyer.
What should I do first if I’m considering bankruptcy?
Many attorneys, like the experienced bankruptcy attorneys at Godbey Law LLC, offer free consultations. You can discuss your situation in detail and find out if bankruptcy is right for you. While it is possible to file bankruptcy without one, “seeking the advice of a qualified attorney is strongly recommended because bankruptcy has long-term financial and legal outcomes,” the Administrative Office of the U.S. Courts notes on its website. Bankruptcy is governed by federal law, and cases are handled by federal bankruptcy courts, although some rules differ from state to state.
I keep hearing about different types of bankruptcy; what does that mean?
There are essentially two basic types of personal bankruptcy. Chapter 7 and Chapter 13. Depending on the type of bankruptcy filing your qualify for and ultimately decide to pursue, the type of filing decides the repayment of your debt obligations and what you may be allowed to keep or exclude.
Chapter 7 bankruptcy liquidates your assets in order to pay your creditors. Some assets such as part of the equity in your home, certain cars, personal items, clothing, tools needed for your ongoing employment, pensions, Social Security and other public benefits can often be considered exempt which means you get to keep them.
Your remaining, “non-exempt” assets will be sold off by a trustee appointed by the bankruptcy court and the proceeds will then be distributed to your creditors. Non-exempt assets may include property (other than your primary residence), recreational vehicles, boats, a secondary car or truck, collectibles/valuable items, money in bank and investment accounts.
At the end of the process, most of your debts will be discharged and you will no longer be under any obligation to repay them. Student loans, child support, and taxes cannot be discharged. There’s an eligibility or “means test”. Chapter 7 is generally chosen by individuals with lower income and few assets.
Chapter 13 bankruptcy allows you to keep your assets, but must agree to repay your debts over a specified period of three to five years. The trustee collects your payments and distributes them to creditors. Chapter 13 bankruptcy is normally chosen by people who want to keep their non-exempt property or buy time against foreclosures or property seizures.
How long does bankruptcy stay on the credit report?
The bankruptcy public record is deleted from the credit report either seven years or 10 years from the filing date of the bankruptcy, depending on the chapter you filed.
Chapter 13 bankruptcy is typically deleted seven years from the filing date because it requires at least a partial repayment of the debts you owe. Chapter 7 bankruptcy usually is deleted 10 years from the filing date because the debt is not repaid.
How can I check my credit report?
Through April 20, 2021, Experian, TransUnion and Equifax will offer all U.S. consumers free weekly credit reports through AnnualCreditReport.com to help you protect your financial health during a sudden and unprecedented hardship caused by COVID-19.
Has COVID-19 changed how bankruptcy cases are handled by the court?
It’s important that you consult with your attorney about the specifics of your case. Bankruptcy courts vary in how they are handling bankruptcy cases, but, in general, the CARES Act modified certain Chapter 13 repayment plan and debt limit criteria.
In most cases, debtors and their attorneys now can review the bankruptcy paperwork virtually, rather than meeting at the attorney’s office to arrange for a physical signature.
Debtors who file for bankruptcy under Chapter 7 or Chapter 13 typically need to attend a meeting of creditors under Section 341 of the Bankruptcy Code. Your attorney can check with your court to see if this meeting can now be handled virtually.
Do the recent stimulus checks impact my ability to file bankruptcy?
Receiving a stimulus check will not affect your eligibility to file under either Chapter 7 or Chapter 13.
You Can Take Control Of Your Finances
Our bankruptcy lawyers can assist you with issues such as:
We understand that you are under stress and may feel as if no one can help you. We have helped thousands of people regain control of their finances. Even if you do not file bankruptcy, you will feel much better after talking to an attorney. Once you learn about the various options of how you can eliminate or reduce your debt, moving forward will be much easier.
In addition to resolving the long-term aspects of debt, bankruptcy will help you with immediate problems such as creditor harassment. We will explain how the automatic stay stops creditor calls, repossessions, wage garnishments and other types of collection activities.
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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.