A person so deep in debt that he cannot pay his creditors tends to be desperate and may depend upon a bankruptcy lawyer every bit as much as a criminal defendant would depend on a criminal lawyer. A bankruptcy attorney needs to understand basic mathematics, clear writing, and personal negotiation. This is so that his client understands what must be done, the creditors can accept what the debtor can do, terms between debtor and creditor are kept as civil as possible, and no mistakes can be made that would further endanger the debtor.
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- Contact an Experienced Bankruptcy Lawyer
When you are facing overwhelming financial problems, talking with a bankruptcy lawyer may be a helpful way to learn more about your options. An experienced bankruptcy lawyer has handled many, many bankruptcies for people and businesses who have presented a wide variety of circumstances. In addition, bankruptcy law is a rather complex and often-changing field of law that requires the guidance of a skilled attorney.
Facts About Bankruptcy Law
If you are an honest individual that is unable to pay for his or her bills and is considering bankruptcy, you should consult with a bankruptcy lawyer. Bankruptcy lawyers can sort through all of the bureaucracy of filing for bankruptcy. Since bankruptcy laws vary by state, bankruptcy attorneys should be proficient in the areas they serve. Even though you may feel that you do not need a bankruptcy lawyer or it’s too costly to hire a bankruptcy lawyer, it is probably wise to do so.
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Bankruptcy: Chapter 7 or Chapter 13
Today, with the economy’s “perfect storm” creating overwhelming job losses and dramatic decreases in wealth, our guidance and legal services are also helping those who have found themselves in hard times. Personal bankruptcies are being resorted to daily through the filing of Chapter 7 and Chapter 13 bankruptcy petitions. Since debt is a common problem in the U.S., filing bankruptcy has become inevitable for many hard-working individuals.
The current bankruptcy Code, known as Title 11 of the United States Code, has the main objective of reorganizing debtors in financial trouble. For our clients, if they are qualified candidates, Chapter 7 of the Bankruptcy Code tends to provide the most immediate relief from the weight of unwanted debts. Chapter 7 bankruptcy consists of liquidation proceedings that are administered by the bankruptcy cell of the federal district courts. This means that debtors turn over all nonexempt property, if any, to a case trustee assigned by the Court. The case trustee then sells and converts all the properties to cash for the benefit of the creditors.
Chapter 7 bankruptcy can be filed by any person who is a resident of the USA or who has a business or property in the States. Chapter 7 bankruptcy cannot be filed by any person who has been granted debt discharged by a Chapter 7 filing within the last 6 years, who has completed a repayment plan under a Chapter 13 filing, or whose bankruptcy filing was dismissed for cause within the last 180 days.
It should be noted that not all debts are dischargeable by Chapter 7 bankruptcy. Child support, taxes, liability for injury or death caused from driving in an intoxicated state, student loans, criminal fines or penalties and non-dischargeable debts incurred from a previous bankruptcy are some of the debts that will remain even after a successful bankruptcy filing.
A few of the major benefits of Chapter 7 include stopping collector harassment and foreclosure actions, removal of community debts (applicable for divorcees), and completely discharging most, if not all, of the debts of the petitioner.
Changes in Bankruptcy Law
To make things even more complicated, there have been some major changes in bankruptcy law in recent years. In 2005, it became more complex and more expensive to file for bankruptcy. It’s not as easy to file personal bankruptcy as it used to be, thanks in part to the people who abused bankruptcy laws for their own interests.
A significant new restriction on the most commonly used type of personal bankruptcy, Chapter 7, was also put into place. There is now a “means test” that must be passed to be eligible for a Chapter 7 bankruptcy. If your income is too high, a Chapter 7 bankruptcy will not be available to you.
Automatic Stay to Stop Your Creditors
One of the most significant steps that your bankruptcy attorney can help you with is getting an automatic stay. When your attorney files your bankruptcy with the court, the automatic stay will be issued. The stay will stop your creditors from filing legal actions against you.
Getting an automatic stay is especially important if you are at risk of:
- being foreclosed on your home
- being evicted from your home
- losing basic resources such as unemployment benefits or welfare payments, and utilities such as heat and water
- losing your job/income because of wage garnishments
- being found in contempt of court for failure to pay child support
Contact an Experienced Bankruptcy Lawyer
Talking with a seasoned bankruptcy lawyer can put your mind at ease and answer all your concerns about bankruptcy and your future. Get your financial information together and contact a bankruptcy lawyer in your area today.