BANKRUPTCY DEBT RELIEF
I AM A DEBT RELIEF AGENCY. I HELP PEOPLE FILE FOR BANKRUPTCY RELIEF UNDER THE BANKRUPTCY CODE.
Consumer debtors usually have considerable difficulty deciding whether or not to file Bankruptcy. This is often the most difficult aspect of finding relief from debt. Alternatives to Bankruptcy should be exhausted to try to avoid Bankruptcy. It should only be a last resort after attempting to increase income and reduce expenses. A FREE INITIAL CONSULTATION can help you determine how Bankruptcy can help you. Upon hiring me by paying part or all of the fees, you will be able to refer HARASSING CREDITORS to me and stop their telephone calls.
If you have no choice but to file Bankruptcy, your impaired ability to borrow money in the future is of little consequence. If you are considering Bankruptcy, you are probably not able to borrow. You will be a better credit risk once you have been discharged from your debt. Once you have decided to file, you should no longer attempt to repay your unsecured creditors. For debts secured by real estate, automobiles or other collateral that you wish to keep, you need to continue to make your payments.
The immediate benefit of filing Bankruptcy is a federal court injunction known as the AUTOMATIC STAY which stops creditors from taking any action to collect a debt. Creditors are required to seek the court’s permission to VACATE the Stay before trying to collect a debt. One of the policies served by the Stay is to prevent chaotic financial destruction of Debtors.
The goal of Bankruptcy is a FRESH FINANCIAL START through Discharge, cutting off your legal liability to repay Dischargeable debts. Some debts, like taxes, student loans, domestic support and others are generally not dischargeable.
If the MEANS TEST analysis makes you eligible to file a Chapter 7, you would not have to repay debt from future earnings. Chapter 7 filers may lose property exceeding EXEMPTION allowances which may result in a sale of the assets for the purpose of repaying your unsecured creditors. Many Chapter 7 filers have NO ASSET cases in which no property is lost.
If your earnings for the 6 months prior to the date of filing and the number of your dependents require that you file a Chapter 13, we would propose a Plan of repayment that would likely last three to five years and commit as much as you could afford to pay toward your unsecured creditors.
Bankruptcy Debtors in Chapter 7 and 13 may be able to keep real estate as long as they are able to make the current payments on mortgages and home equity loans. Chapter 13 filers may receive the benefit of VOIDING LIENS of mortgage lenders and RECLASSIFYING them as completely UNSECURED where the first mortgage exceeds the FAIR MARKET VALUE of your principal residence. Chapter 13 Plans may provide for repaying less than the full amount of the debt.
It is desirable to be current on Mortgage payments before filing a Chapter 7. Mortgage arrearages may be paid over time in a Chapter 13 Plan. Automobiles, furniture and other collateral for secured debt might also be kept by REDEMPTION for the fair market value or by REAFFIRMATION, which reasserts your personal liability, and payment of the outstanding debt. Collateral which you don’t wish to pay for may be returned to the creditor.
If there is a PRESUMPTION OF UNDUE BURDEN presented in a reaffirmation agreement, the court will determine if it will be approved. Typically, automobile and mortgage lenders request that Debtors Reaffirm on their debt. Mortgage lenders in New Jersey cannot FORECLOSE on your home for lack of a reaffirmation agreement. Auto lenders would usually prefer to be paid by the Debtor rather than REPOSSESSING your automobile even if the court disapproves your agreement.
There is a Presumption of Fraud which may attach to the use of credit during the 90 days before filing Bankruptcy. Cash advances and the purchase of luxury goods and services during this time period could result in an Adversary Proceeding to determine Dischargeability of the Debt. Inaccurate information used in applying for credit may also create problems within a Bankruptcy.
The repayment of debt to family members during the year before filing can cause Preference issues to arise. One of the goals of Bankruptcy is to treat creditors fairly and favoring one creditor over others may trigger a Trustee’s action to recover the funds paid.
Bankruptcy requires honesty in providing information to the Court. Dishonesty can result in criminal actions. Attempting to hide property of the Estate cannot be condoned. And the information provided in the Petition, Schedules and other forms must be complete and accurate.
The process of filing usually requires some time to bring together tax returns, pay stubs, deeds, comparative market analysis for real estate, debt details through statements and credit reports, mortgage and home equity loan payoff amounts, bank statements, and the completion of BANKRUPTCY COUNSELING through a court approved provider. The initial counseling can be accomplished in a 45 minute telephone conversation and generally costs $50.00. The fee can be waived if you are financially qualified. A second counseling session, a course in Personal Financial Management, is required before Discharge can be granted.
Court fees to file Chapter 7 are $299.00 and for Chapter 13, $274.00. These fees are usually paid to the Court through me at the time your case is filed. Attorney fees vary depending upon the facts in your case. Electronic filing provides great convenience in filing documents with the Bankruptcy Clerk’s office. In Chapter 7 all of the attorney and filing fees must be paid before your case is filed. In Chapter 13 a portion of the attorney fees are usually paid from your Plan payments. Most clients hire me by paying a portion of the fees. This begins the process of gathering the data needed to complete the Petition, Schedules and other forms.
About 5 days after filing, a Notice of the Meeting of Creditors is sent by the Court informing all interested parties of the date, time and place of a hearing which you and I will attend. The hearing is before a Trustee who is an attorney representing the interests of the unsecured creditors. You will be sworn under oath to answer the Trustee’s questions, most of which you have already replied to in the documents that commenced your case. Creditors can appear and question you to a limited extent as well and may schedule extended examinations under oath at a later time. More often than not creditors do not appear.
Chapter 13 Meetings are with the Office of the Standing Trustee who seeks to understand what your Plan proposes, and if there are any issues that might prevent it from being Confirmed. Your first payment to the CHAPTER 13 TRUSTEE is payable on the first of the month following filing of your case. You do not need to attend your Confirmation Hearing. My appearance may not be necessary if the Plan has not been objected to. The failure to make Plan payments or payment of secured debts often causes issues to arise in the course of a Chapter 13 and may result in Dismissal of a case. A confirmed Plan may later be modified if a reduction in income causes an inability to adhere to the original Plan.
Chapter 7 cases are usually complete within 5 months of filing. Chapter 13 cases achieve an Order of Discharge usually after the Plan payments have been made.
The timing of filing may be significant as debts you incur after the filing will generally not be affected by the Bankruptcy.