Chapter 7 and Chapter 13

Sometimes life gets out of control and our debts begin to multiply to an unmanageable level. There is a way out from under all of your debts. Our law office can help you evaluate whether you qualify for Bankruptcy Protection.. Filing for Bankruptcy can stop the creditors from calling, stop the wage garnishment and may save your home and your car.

If you qualify, a Chapter 7 Bankruptcy Petition will permit you to discharge most of your unsecured debts. You may even be able to keep your home provided you are able to make the monthly mortgage payments and your cars if you continue to make the car payments. Your unsecured debts include credit card debts, judgments, medical bills, liens, loans, and insurance surcharges. Some assets are exempt from liquidation, including social security benefits and retirement or 401k accounts, debts such as student loans, taxes, child support and alimony cannot be discharged under Chapter 7 Bankruptcy.

If you qualify, a Chapter 13 Bankruptcy Petition will help you to restructure the debts that you have into a more manageable payment schedule called a “Chapter 13 Plan’. You may also be able to keep your home if you have a substantial amount of equity by restructuring the repayment of the mortgage on that home. This is a more expensive option than a Chapter 7 Petition, but may serve your needs better if you have assets that you need to retain.

There are several ways to get out from under mounting debts and to stop creditor harassment, foreclosure and repossession. You will need to gather the following information to bring to your first meeting with one of our attorneys: 

1. For all Real Estate you own, provide a copy of Deed, Closing Statement, Copies of Mortgages, Mortgage loan payoffs, tax bill, proof of current value (appraisal or broker's price opinion), Foreclosure and Sheriff Sale notices; 

2. Proof of your income for the past 6 months including, paystubs, unemployment compensation, disability income statement, social security, alimony/child support, and income from any other sources for the last six (6) months. If you have your own business, profit and loss statement and balance sheet for last six (6) months; 

3. Your Federal and State Income Tax Returns for the past 2 years; 

4. All Bank Statements for all types of bank accounts you have including savings, checking, certificates of deposit, money market, for the past 3 months; 

5. For Vehicles, including cars, boats, motorcycles, or any other motorized vehicle, provide detailed description of the vehicle, copies of the lease, registration, pay-off balances and fair market value; 

6. Retirement Plans: Pension, 401K, IRA, Keogh, or other Retirement Plan bring copies of recent statement of current value and plan booklet or other documentation showing the type of plan and how it operates; 

7. Life Insurance policies if there is a cash value; 

8. Lawsuits: Copy of all court papers, contract with attorney representing you. If the claim was recently settled provide documents; 

9. Legal proceedings: Copies of documents for all legal proceedings to which you were a part in the last year, including wage attachments/garnishments, summonses, complaints and judgments. Documents evidencing claims or money owed to you; 

10. Divorce: copy of the Divorce Judgment, Property Settlement Agreement. Proof of last six (6) months payment of child support and alimony; 

11. Bills: Most recent credit card, store charges, utility bills, medical bills, unsecured loans, home improvement loans, auto loans, tax delinquencies, tickets, fines, criminal restitution, fraud judgments, student loans, etc.; 

12. Sold Real Estate: If you sold, gave away or transferred any real estate property in the last two years, provide a copy of the closing statement; 

13. Business: Copies of last two years tax returns, financial and bank statements, accounts receivable, accounts payable, contracts and leases, books and records, an accountant’s evaluation of the value of the business; 

14. Guarantees or Personal Loans: Copies of documents signed as a principal, endorser or co-maker; 

15. PRIOR BANKRUPTCIES: Discharge Order & Schedules if within last eight (8) years; 

At the initial consultation you will review your financial situation with our attorneys who will assist you in completing a “Means Test” to determine if you qualify for relief under Chapter 7 of the Bankruptcy Code based on your income. Depending upon your individual circumstances, you may be able to keep your house, your car and some of your other major assets while discharging your credit card debt, medical bills and insurance surcharges. Our attorneys will assess your individual needs, rights, and obligations. 

What happens if I choose to file a Chapter 7 Bankruptcy?
If you qualify for relief under Chapter 7 of the Bankruptcy Code, you will need to take a credit counseling course. The course must be completed prior to filing the Bankruptcy Petition for relief. The Credit Counseling Certificate you receive as a result of completing the Course will be good for 180 days and the Bankruptcy Petition must be filed within that 180 day period. 

After filing the Petition, there will be a creditors meeting at the Federal Court House. During this meeting you will be asked questions by the Trustee who has been assigned to your case and by any creditors which attends. You will not attend alone, as our attorneys will be with you and guide you through this process. If no challenges are raised to your Petition, you will be Discharged of your debts. If challenges are raised to your Petition, you and our attorneys together will address each challenge to maximize your benefit and work towards your eventual Discharge. 

What happens if I do not qualify for Chapter 7 Bankruptcy relief? 
Depending upon your individual circumstances, you may qualify for Chapter 13 Bankruptcy relief. 

Under Chapter 13 of the U.S. Bankruptcy Code, a person struggling with unmanageable debt or if you are in arrears on your mortgage or car payment(s), you may reorganize your debts under a supervised monthly payment plan agreed to by that person's creditors. If you decide to pursue Chapter 13 Bankruptcy, the court will supervise repayment of your debts and other financial obligations, including child support and alimony over a predetermined three- to five-year period. Once that time has passed, your remaining debt will be discharged. Chapter 13 Bankruptcy, may also allow you to do the following:
  • Avoid home foreclosure and repossession of your car,
  • consolidate your debts into a single monthly payment,
  • Completely eliminate some types of debt, and
  • Avoid wage garnishments and tax liens
A Chapter 7 or Chapter 13 Bankruptcy will be reflected on your credit report for 7-10 years. 
Schedule a Consultation with one of our attorneys to find out whether you qualify for Bankruptcy Relief. 

Frequently Asked Questions About Bankruptcy

Q: What is the difference between a Chapter 7 and a Chapter 13 Bankruptcy Petition? 
A: A Chapter 7 is an absolute discharge of all qualified debts giving the Petitioner a fresh start. A Chapter 13 Petition is a Reorganization of your debts which means that the Trustee in Bankruptcy reviews all of your qualified debts, evaluates your available income and you submit a plan for the payment of your debts. 

Q: Can I keep my house if I file a Chapter 7 Petition? 
A: You can keep your home in the event the mortgage is current and the amount of equity that you have in the home is less than the permitted exemption. 

Q: Can I keep my house if I file a Chapter 13 Petition? 
A: Yes, provided that you can bring all of your arrears in the mortgage current under your proposed Plan in 36 to 60 months.

Q: Can I discharge my Student Loans in a Bankruptcy? 
A: No. Student Loans cannot be discharged in any Bankruptcy. 

Q: Can I discharge Insurance Surcharges? 
A: Yes. Under current Bankruptcy law, insurance surcharges can be discharged. Court fines, however, are not.