Many of my clients first see me when they are about to lose their house, car, or the IRS has levied their wages. Some come because of a lawsuit or judgment, others come when they can’t take the bill collectors’ calls anymore, or when they have run out of cash advances and new credit card offers which they had been using to shift the bills from one card to another. Some come only after they have depleted their savings and retirement accounts, or sold a car to pay their credit card installments, only to find that their sacrifice didn’t fix the problem; it simply delayed it. Bankruptcy relief, under bill consolidation or straight Chapter 7 bankruptcy, can stop the foreclosures, the levies, the repossessions, and the garnishments, and give you the breathing room you need to catch up on your house payments, or your car payments, or to pay back taxes. Some old taxes may even go away entirely!
And you generally get to keep all your exempt property.
So, let’s look at how this works. We will focus on Chapters 7 and 13 bankruptcy, which are most often used by individuals and sole proprietorships. There are also ways of reorganizing troubled businesses through Chapter 11 bankruptcy, but this is very complex and must be analyzed on a case-by-case basis. I can work with you to explain how reorganization may help you to save your business or make it more profitable. If you have a business problem, please call my office for a separate consultation.
Chapter 13 bankruptcy, often called bill consolidation or a wage earner repayment plan, is available for people who have some money left over each month after their necessary living expenses. This is used to repay debts over a three- to five-year period under current law. Chapter 13 bankruptcy also enables people to catch up on past-due house payments, child support, taxes, and other problem debts, all while under the protection of the Bankruptcy Court. This protection, called the “automatic stay”, begins at the moment you file a bankruptcy petition, under any chapter by the way, and prevents your creditors from taking any further actions to collect debts or repossess collateral without first obtaining a court order from the Bankruptcy Court. This means that the filing of your bankruptcy petition will block a threatened foreclosure of your house, will stop an IRS wage levy, and will stop the repossession of your vehicle. And this protection will stay in place as long as you can provide for these debts through your Chapter 13 bankruptcy plan.
In Chapter 13 bankruptcy, we can often reduce payments on vehicles, furniture and other secured debts, and protect co-debtors while you repay joint consumer obligations. Depending on your income and expenses, you may also repay a portion of your credit card and other unsecured debt. All of this is accomplished through a Chapter 13 bankruptcy plan which I prepare for you. You simply make one monthly payment to the Chapter 13 Trustee for the three- to five-year period we determine, and the trustee pays the creditors set out in your plan after court approval. At the end of your plan, you are discharged from all remaining dischargeable debts.
Chapter 7 bankruptcy does not offer as many options as Chapter 13 bankruptcy. It is primarily used by people who have no money to repay debts beyond their regular living expenses or by those who are not otherwise eligible for Chapter 13. There is no repayment plan in Chapter 7. Chapter 7 bankruptcy will discharge your personal liability on most credit card debt. However, it will NOT enable you to restructure secured debt, catch up on past-due house or vehicle payments, repay taxes or deal with other problem debts.
When you come to my office, we will look at the kinds of problems you have and your income and expenses and determine which bankruptcy Chapter will best suit your situation.
Businesses can use the bankruptcy process to reorganize under Chapter 11 or Chapter 13. The choice of Chapter will be determined by the business form, the total debts owed, and the complexity of the underlying business. Chapter 13 bankruptcy is restricted to businesses operating as sole proprietorships with unsecured debts not exceeding $383,175 and secured debts of not more than $1,149,525. The reorganizational options are not as flexible as those of Chapter 11 bankruptcy, but for eligible businesses with fairly simple problems, it is the most cost-effective way to restructure a business under the Bankruptcy Code.
Chapter 11 bankruptcy provides more flexibility and is used for more complex reorganizations and/or to reorganize businesses not eligible to file under Chapter 13. It can also be substantially more expensive than Chapter 13.
Chapter 7 bankruptcy is a liquidation chapter available to all businesses and is used to provide for the orderly distribution of business assets when reorganization is not feasible.
Business bankruptcy consultations generally take substantially longer than personal bankruptcy consultations, so when you call to make an appointment for a business consultation, please let us know so we can send you special business worksheets and allow additional time for our meeting.
We are a debt relief agency. We help people file for relief under the Bankruptcy Code. Our office is available by appointment only, so to learn more, set up a free consultation by clicking book now below to see our hours and available appointment times, or call our firm at (601) 790-0529 or email us at email@example.com