Bankruptcy Explained: What Type of Bankruptcy Should I File?
Posted on Friday, February 6th, 2015 at 9:04 am
Advice from an attorney is your best bet when deciding if you should file a Chapter 7 or Chapter 13 bankruptcy. Are you facing foreclosure from a bank like Wells Fargo, being sued for medical bills by a hospital like St. Elizabeth, or confronting a mountain of Capital One credit card debt? Filing a Chapter 7 or Chapter 13 bankruptcy will end the harassing phone calls and letters. You must comply with the terms of any repayment agreement or you will lose these protections, so it is important to have strong legal guidance before agreeing to anything. Choosing the right kind of bankruptcy can mean the difference between keeping your house, keeping your car, keeping your money, or losing it all. Some of the things a Northern Kentucky Bankruptcy attorney will need to know is a client’s past income and current assets. Knowing the asset exemptions and median income levels of the client will help to make the decision easier.
Chapter 7 Bankruptcy
A bankruptcy lawyer’s first step will be to determine whether you are eligible for protection under Chapter 7. The 2005 revisions to the bankruptcy laws require that, to qualify to discharge debts under Chapter 7, you must submit to a “means test,” demonstrating to the court that you lack the means to repay your creditors in a Chapter 13 proceeding. We will conduct a means test and, if you qualify, we will prepare and file all documents required to complete the Chapter 7 process. We will carefully explain which debts can be eliminated, as well as which assets you can protect, so that you get the benefit you deserve.
In General, You Cannot File a Chapter 7 Bankruptcy If You…
- have filed a bankruptcy in the last eight years
- have assets with significant value that you don’t want to lose
- have income over median for your household size in the Commonwealth of Kentucky.
Make Sure to Assess The Value of Your Property Correctly
Figuring out how to correctly assess the value of your property, or the correct number for median income, can be a daunting task, and the consequences of making a mistake are very drastic. A Northern Kentucky Bankruptcy lawyer will make sure your bankruptcy is filed correctly so that you get the maximum benefit from your decision to file.
You Get Immediate Relief After You File a Chapter 7 Bankruptcy
Once you file for protection, an automatic stay goes into effect, preventing your creditors from calling, writing or taking any other legal action to collect the debt. A Chapter 7 bankruptcy petition can also stop foreclosure proceedings, wage garnishments and repossession actions. With the help of a lawyer, in Kentucky, a Chapter 7 bankruptcy proceeding can generally be completed in 3 to 5 months.
Chapter 13 Bankruptcy
If you don’t qualify to permanently discharge debt under Chapter 7 or prefer to set up a new payment plan with your creditors, we will help you reorganize your debt in a Chapter 13 bankruptcy filing. We will prepare and file all the necessary paperwork to complete the process and will represent you in hearings or meetings with creditors, the bankruptcy trustee or the bankruptcy court. We will help you put together a reorganization plan and will review all proposed repayment plans to ensure they are appropriate.
You Get Immediate Relief After You File a Chapter 13 Bankruptcy
When you file for protection under Chapter 13, an automatic stay goes into effect, which prevents your creditors from calling, writing or using any other means to collect the debt, other than through the bankruptcy proceeding. The automatic stay will suspend foreclosure or repossession actions, as well as wage garnishments, giving you time to get back on your feet financially. In many instances, you will be able to reduce the amount you have to pay, sometimes to as little as a penny on the dollar, by entering into agreements with your creditors. A Chapter 13 bankruptcy can be ideal for someone with large medical bills or credit card debt, allowing you the opportunity to keep most or all of your assets and enter into payment arrangements that are workable.
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