The purpose of this article is to provide you with information if you have already decided to file bankruptcy, or are seriously considering bankruptcy as one of your options for dealing with your debts. For individuals and small business owners, a Chapter 7 bankruptcy can be a fast way out of financial difficulty and clear the way for a brighter financial future, but like anything that holds the promise of something good, there are usually strings attached, and bankruptcy is no different.
If you are being harassed by your creditors by non-stop phone calls, threatening letters from collection agencies and lawyers, or are afraid that you will be sued in your local court and your paycheck will be garnished, or your utilities will be shut off, your house foreclosed or vehicle repossessed, these are all valid reasons to seek bankruptcy protection from your creditors. It is your legal right to do so and Congress passed bankruptcy laws for the protection of people just like you.
With a Chapter 7 case, the moment you file your case in court, an automatic court order goes into immediate effect and makes it illegal for your creditors to contact you in any way. This should give you a sense of relief and allow you to have some much needed breathing room. There are, however, some types of creditors who can still collect from you if you are under other court orders to pay for child support, alimony or other domestic support obligations. These obligations, along with most income taxes and student loans, generally do not go away from filing bankruptcy. However, there are times when income taxes and student loans may be eligible to be "discharged" and a consultation with an experienced bankruptcy attorney is recommended because this area is very complicated.
A Chapter 7 case stays open for about four months and upon conclusion, you will receive a court order from the Bankruptcy Judge discharging all of the debts that you have listed in your bankruptcy petition which are dischargeable. Any debts that you have failed to list will not be discharged and you will still have to pay them. It is best to carefully review your bankruptcy papers before they are filed because you are the best person to know who all your creditors are. If you are unsure about who all your creditors are, you should obtain copies of your credit reports from the three main credit reporting agencies, Trans Union, Experian and Equifax. These reports can be obtained online and in some states, you are entitled to one free report per year.
Most of the tasks that you will have to do as a client are at the beginning of your case. The bankruptcy process is "frontloaded", meaning that most, if not all of the information that will be asked of you, you must provide to your lawyer, the court and the trustee, before your case is filed, or very soon after the filing of your case. Generally, you will be required to produce two years of tax returns, recent paystubs or if you are self-employed, evidence of your income through profit and loss statements and bank statements, as well as a host of other documents that may apply to your case, such as deeds to real estate, evidence of the value of your house or other real estate, the value of all your vehicles, retirement plans, life insurance, tax refunds, as well as the value of all of your personal belongings.
About a month after your case is filed, you will have to attend a "meeting of creditors" where you will answer questions about your case to a trustee in a conference room setting. Most of these meetings do not take place inside of a courtroom and most people filing bankruptcy never see the inside of a courtroom. This meeting is usually very brief, lasting about ten minutes and typically, the only people in attendance are you, your lawyer, and the trustee. However, if you have lots of assets or have a complicated or unusual case, the meeting can last longer and even be continued to another date. Many people who try to represent themselves without an attorney often get their meeting continued because they have not done something properly. This can be very frustrating for the person filing bankruptcy and for the trustee. It is always best to have an experienced bankruptcy attorney involved every step of the way to make sure that the trustee is happy. In turn, the chances are good that if the trustee is happy, you will be happy too.
Most people in a Chapter 7 case get the best of both worlds by getting to keep everything that they own, but get rid of their debts for good. The bankruptcy laws have a long and generous list of exemptions that let people keep their real property and personal property, so long as they fit within the allowed exemptions. This is also why you hear of people in the news who "filed bankruptcy and came out smelling like a rose". While those stories should be taken with a grain of salt, there is usually some truth to them and that is because of the bankruptcy exemptions at the federal level, as well as some states, that have their own state law exemptions that may or may not provide for better protection for someone filing bankruptcy. An experienced bankruptcy attorney can analyze your specific circumstances and give you advice on which exemptions may be available for your use.
If you have a mortgage on your house or a loan on your vehicle, generally, you will get to keep them, provided you continue to pay the lender just like you did before you filed bankruptcy. If you miss payments on your house or car, the lender can foreclose on your house and repossess your vehicle, but they usually need to obtain permission from the Bankruptcy Judge before doing this. Loans on houses and cars are called "secured" loans because if you do not pay your lender as agreed, the lender can take back the property to sell it and satisfy your obligation. Bankruptcy only gets rid of the debt associated with what you owe on a house or car. Bankruptcy almost never gets rid of the secured status of a lender who has loaned you money to buy a house or car. This is why someone can still lose their house or car after their bankruptcy case has long since been closed. If you intend to keep your house and car after bankruptcy, just remember to keep paying as agreed. But if you decide that your house or car is too expensive or not worth keeping, you can "surrender" them or give them back to the lender as a part of your bankruptcy case and you will never have to make another mortgage payment or car payment.
This is only intended as a general summary of how a Chapter 7 case works. If you are considering filing bankruptcy, it is best to consult an experienced attorney who can advise you about your specific circumstances so that your case proceeds smoothly from filing to discharge and that you get a "fresh start". Legal advice, like anything, costs money, but its value to you can be enormous.
Article Source: http://EzineArticles.com/?expert=Richard_S._Ravosa,_Esq.
Article Source: http://EzineArticles.com/8273710
If you are being harassed by your creditors by non-stop phone calls, threatening letters from collection agencies and lawyers, or are afraid that you will be sued in your local court and your paycheck will be garnished, or your utilities will be shut off, your house foreclosed or vehicle repossessed, these are all valid reasons to seek bankruptcy protection from your creditors. It is your legal right to do so and Congress passed bankruptcy laws for the protection of people just like you.
With a Chapter 7 case, the moment you file your case in court, an automatic court order goes into immediate effect and makes it illegal for your creditors to contact you in any way. This should give you a sense of relief and allow you to have some much needed breathing room. There are, however, some types of creditors who can still collect from you if you are under other court orders to pay for child support, alimony or other domestic support obligations. These obligations, along with most income taxes and student loans, generally do not go away from filing bankruptcy. However, there are times when income taxes and student loans may be eligible to be "discharged" and a consultation with an experienced bankruptcy attorney is recommended because this area is very complicated.
A Chapter 7 case stays open for about four months and upon conclusion, you will receive a court order from the Bankruptcy Judge discharging all of the debts that you have listed in your bankruptcy petition which are dischargeable. Any debts that you have failed to list will not be discharged and you will still have to pay them. It is best to carefully review your bankruptcy papers before they are filed because you are the best person to know who all your creditors are. If you are unsure about who all your creditors are, you should obtain copies of your credit reports from the three main credit reporting agencies, Trans Union, Experian and Equifax. These reports can be obtained online and in some states, you are entitled to one free report per year.
Most of the tasks that you will have to do as a client are at the beginning of your case. The bankruptcy process is "frontloaded", meaning that most, if not all of the information that will be asked of you, you must provide to your lawyer, the court and the trustee, before your case is filed, or very soon after the filing of your case. Generally, you will be required to produce two years of tax returns, recent paystubs or if you are self-employed, evidence of your income through profit and loss statements and bank statements, as well as a host of other documents that may apply to your case, such as deeds to real estate, evidence of the value of your house or other real estate, the value of all your vehicles, retirement plans, life insurance, tax refunds, as well as the value of all of your personal belongings.
About a month after your case is filed, you will have to attend a "meeting of creditors" where you will answer questions about your case to a trustee in a conference room setting. Most of these meetings do not take place inside of a courtroom and most people filing bankruptcy never see the inside of a courtroom. This meeting is usually very brief, lasting about ten minutes and typically, the only people in attendance are you, your lawyer, and the trustee. However, if you have lots of assets or have a complicated or unusual case, the meeting can last longer and even be continued to another date. Many people who try to represent themselves without an attorney often get their meeting continued because they have not done something properly. This can be very frustrating for the person filing bankruptcy and for the trustee. It is always best to have an experienced bankruptcy attorney involved every step of the way to make sure that the trustee is happy. In turn, the chances are good that if the trustee is happy, you will be happy too.
Most people in a Chapter 7 case get the best of both worlds by getting to keep everything that they own, but get rid of their debts for good. The bankruptcy laws have a long and generous list of exemptions that let people keep their real property and personal property, so long as they fit within the allowed exemptions. This is also why you hear of people in the news who "filed bankruptcy and came out smelling like a rose". While those stories should be taken with a grain of salt, there is usually some truth to them and that is because of the bankruptcy exemptions at the federal level, as well as some states, that have their own state law exemptions that may or may not provide for better protection for someone filing bankruptcy. An experienced bankruptcy attorney can analyze your specific circumstances and give you advice on which exemptions may be available for your use.
If you have a mortgage on your house or a loan on your vehicle, generally, you will get to keep them, provided you continue to pay the lender just like you did before you filed bankruptcy. If you miss payments on your house or car, the lender can foreclose on your house and repossess your vehicle, but they usually need to obtain permission from the Bankruptcy Judge before doing this. Loans on houses and cars are called "secured" loans because if you do not pay your lender as agreed, the lender can take back the property to sell it and satisfy your obligation. Bankruptcy only gets rid of the debt associated with what you owe on a house or car. Bankruptcy almost never gets rid of the secured status of a lender who has loaned you money to buy a house or car. This is why someone can still lose their house or car after their bankruptcy case has long since been closed. If you intend to keep your house and car after bankruptcy, just remember to keep paying as agreed. But if you decide that your house or car is too expensive or not worth keeping, you can "surrender" them or give them back to the lender as a part of your bankruptcy case and you will never have to make another mortgage payment or car payment.
This is only intended as a general summary of how a Chapter 7 case works. If you are considering filing bankruptcy, it is best to consult an experienced attorney who can advise you about your specific circumstances so that your case proceeds smoothly from filing to discharge and that you get a "fresh start". Legal advice, like anything, costs money, but its value to you can be enormous.
Article Source: http://EzineArticles.com/?expert=Richard_S._Ravosa,_Esq.
Article Source: http://EzineArticles.com/8273710
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