Tag: bankruptcy process

What is Chapter 7 Bankruptcy?

Posted on by Emil Fleysher

A Chapter 7 bankruptcy comes from the 7th chapter of the bankruptcy code. It is also known as the “liquidation” bankruptcy. This is because the Trustee has to liquidate, or sell, all non-exempt property in order to repay your creditors. The majority of individuals who file for Chapter 7 bankruptcy get the keep their property. However, there are some states that are more charitable than others. The process normally takes about 3 months and requires only one meeting outside of court with the Trustee.

BAPCPA

A bankruptcy judge selects the trustee, an official, to process your case. Bankruptcy has a law known as the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). It requires filers to take a “means” test. This test is to certify that filers who have “disposable” income are forced to file for Chapter 13 instead. However, most people who file for Chapter 7 do not have “disposable” income and therefore continue to file as such.

Consult a Nonprofit Credit Counseling Agency

Before filing, you will need to consult with a nonprofit credit counseling agency. The idea of this consultation with the credit counseling agency is to check if there is an attainable way, without falling deeper into debt, for you to manage your outstanding balances without filing for bankruptcy. After completing the counseling you can begin to file your case.

The first thing your attorney will do is file for a “Voluntary Petition”. It is the official form that asks the court to pardon your debts. There is a packet of forms that will need to be completed along with an extensive list of required documents. But, there is no need to fret. Your attorney will take care of the majority of the forms on your behalf. Once the filling of this is over, the court will put into place an “Order of Relief”; it will cause your creditors to cease the harassment calls, at least for some time.

During the time that your case is open, you cannot sell or give away any of your property. A notice will be sent advising you when and where the meeting of creditors is going to take place by your trustee. This is usually out of the courtroom and you will be asked a few questions, under oath. As long as you have answered everything truthfully and you have passed the means test, you should have a favorable outcome.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020. Or, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

What is Chapter 13 Bankruptcy?

Posted on by Emil Fleysher

Read the explanation of Chapter 13 Bankruptcy.

If your debts are getting out of your control but your income is still more than the median of the state and you have been living in the same state for the past two years, you can still file for bankruptcy. A Chapter 13 bankruptcy was put in place for those who still have some “disposable” income. Even after paying all their expenses. And/or for those who’d like to keep the property that they would otherwise lose if they filed for Chapter 7. Completion of a form is a must. Its purpose is to determine if the amount of “disposable” income is equal to or less than the median of the state. Then, how much is actually left, and whether a 3-year plan or a 5-year plan will be implemented.

Once a timeline plan has been chosen, a repayment plan is then hatched. To construct a repayment plan, you must show that you can stay on top of your secured debts; such as a mortgage, car note, or domestic support obligation. All the while you are still paying off your unsecured debtors. You are paying the value of the properties that you would have otherwise had lost in a chapter 7 bankruptcy case. You must also be up to date with all of your tax filings. If you are not current with your tax filings, you must first complete that before continuing to file bankruptcy. When the proposed repayment plan has been accepted, a bankruptcy judge will then confirm it. And, it is now up to you to follow through with the plan.

Call Us

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020. Or, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.