Chapter 7 Bankruptcy Explained
When you file any type of bankruptcy case, a notice will go out to all your creditors. They are required by law to immediately stop all collection efforts, and may be subject to a civil lawsuit brought by you if they continue to call or send notices.
Chapter 7 Bankruptcy is the opportunity to wipe your debt slate clean. Generally unsecured debts such as credit cards, medical bills, signature loans, utility bills, payday loans, repossession deficiencies, and judgments will be eliminated. In some cases second trust deeds or home equity lines of credits (HELOCs) will be erased. In rare cases, it is even possible to reduce or eliminate some past due state and federal tax liabilities.
Many of your assets, such as your home, business, cars, and retirement plans are protected. We will help you to retain as many of your assets as possible while eliminating as many debts as the law allows. In some cases some assets will be subject to sale in order to pay some of the debts.
Chapter 7 Bankruptcy requires a petition to the courts, including a listing of all your income, expenses, assets, and debts. We will handle the paperwork, and accompany you to the hearing with the bankruptcy trustee, so you will never be alone during this difficult time. Once the trustee concludes your hearing, your debts will be discharged within three months of your hearing date.
Chapter 13 Bankruptcy Explained
Chapter 7 bankruptcy is designed for those who have no chance to repay their debt within five years. In some cases, you might have enough income after expenses and/or assets that paying off the debts is possible within five years. In those cases chapter 13 provides you with an opportunity to structure a payment plan subject to the approval of the court and your creditors.
This repayment plan will include any past due mortgage or car payments that need to be included into the filing so you can maintain ownership of them going forward. All payments must be made on time in the amount agreed upon by the trustee.
Business Restructuring – Chapter 11 Bankruptcy Explained
It is very common that companies which are otherwise viable find themselves faced with the same financial setbacks that face individuals. When the business owners believe that they can pay off all or a portion of the indebtedness if given some time to do so, they might choose the Chapter 11 route.
A major benefit of chapter 11 is that the mere filing stops creditors from continuing collection actions. The company now has time to work out a restructuring plan that they believe will allow the company to become successful in the long term. This plan must also be approved by their creditors and the court. The filing also requires the landlord to continue to rent facilities to the business, but the business must pay all new rents due after the filing on time.
The restructuring may include reduction of amounts owed to creditors, including secured creditors. Contracts may be modified. Each interested party can negotiate their settlement individually or as part of a creditor’s group.