Joe Smith, P.C. | Richmond Bankruptcy Lawyers
Richmond Bankruptcy Lawyers: We Can Help You With Your Bankruptcy
Welcome to Joe Smith, P.C. Richmond Bankruptcy Lawyers law firm. Our bankruptcy law firm understands that debt is a very stressful situation. I want you to know that you have legal options to relieve yourself of these debts.
Your Local Richmond Bankruptcy Lawyers wants to provide you with valuable information on filing bankruptcy.
So that you can make a better decisions about your options when considering to file bankruptcy. And to help you weigh your options of having good legal guidance through the process.
First, as a responsible and concerned Richmond Bankruptcy Lawyers, we want you to consider some important advantages of the most common form of bankruptcy. And that is Chapter 7 Bankruptcy.
Chapter 7 bankruptcy: What Does it Mean to You?
- It Eliminates debts (exceptions include most tax debts, child support payments, alimony, and student loans)
- There is No debt limit
- Future income will belong to the debtor, except for a couple of things. When the debtor receives an inheritance, or proceeds from an insurance settlement, or proceeds from a divorce settlement within 180 days after filing for bankruptcy
- There is no repayment plan
Consider the following:
If a debtor (you) is what they call judgment proof, a person that has very little money or nonexempt property that creditors can take, then taking no action could be the best option.
But if there is property or assets involved, a savvy Richmond Bankruptcy Lawyers can negotiate with your creditors? You, the debtor can ask creditors to forgive the debt or to agree on a repayment plan.
This is one that is not a very popular consideration. Can you sell valuable property? A home, jewelry, boat, vehicles, stock or anything of value. If so, instead of filing for bankruptcy, it may be easier to sell property to pay off your creditors. A hard decision, but it is one way to avoid the long-term stigma that will be on your credit report due to the “bankruptcy”.
Filing for a Chapter 7 Bankruptcy: What You Need to Know
Income criteria established by bankruptcy law determine which debtors may file for Chapter 7 bankruptcy. In order to qualify under income guidelines, a filer’s income must be equal to or fall below the median income in the filer’s state.
Every state has different income guidelines. A filer that falls within a state’s income criteria may file for Chapter 7. However, if the filer’s income is above the state’s median, the bankruptcy court will require the filer to take a “means test” in order to establish eligibility for Chapter 7.
The means test prevents filers with the ability to repay creditors from discharging debt. The means test assesses the filer’s debt and income from the preceding six months. If the debtor has a certain amount of income leftover every month after paying creditors, the debtor will fail the means test.
Although the debtor is ineligible for Chapter 7, Chapter 13 is an option. A Chapter 13 bankruptcy allows the debtor to repay creditors in a five-year repayment plan.
Who is Ineligible for a Chapter 7 Bankruptcy:
- A debtor is ineligible under the following circumstances
- A previous debt was discharged within the past eight years under Chapter 7
- A previous debt was discharged within the past six years under Chapter 13
- Their income, expenses and debt would allow for a Chapter 13 filing
- The debtor attempted to defraud creditors or the bankruptcy court or
- The debtor failed to attend credit counseling
The Types of Debts Exempt from Chapter 7 bankruptcy:
- Child support payments
- Alimony
- Recent taxes (less than three years past due)
- Student loans
- Judgments for auto accidents involving drunk driving
- Trust fund taxes
- Criminal fines or restitution
- Debts incurred for paying back taxes
How Do You File for Chapter 7:
Your Richmond Bankruptcy Lawyers will guide your through the bankruptcy process. He will inform you that, the debtor must attend credit counseling prior to filing for Chapter 7. And upon completing the credit counseling you can at that point, file for bankruptcy with your local Richmond Bankruptcy Lawyers.
This is a legal process so you will have to provide some personal financial documentation. You will be required to provide information about your income, debts, living expenditures, creditors, including unsecured debt, the sale of property(s) and a list of exempt property.
Exempt property is property that Chapter 7 bankruptcy rules allow a debtor to keep. Each state has its own guidelines, but exempt property typically includes clothing, furniture, and cars. A good Richmond bankruptcy lawyer will keep you informed about the details of what you can and cannot keep under the findings of the court.
The Automatic Stay: What is it?
Once a debtor files for bankruptcy, the bankruptcy court will issue an automatic stay, or an “Order for Relief.” An automatic stay protects a debtor from a creditor’s attempt to collect on a debt during the bankruptcy process.
In effect, all collection activities, including any pending lawsuits, must cease. An automatic stay will prevent wage garnishment, filing of liens, and the seizure of a debtor’s property such as a house, a car, or a bank account. If the bankruptcy court dismisses a case, the automatic stay also terminates and the creditor may commence collection activities.
The Creditors Meeting:
After a debtor has completed and filed all of the necessary paperwork for a Chapter 7 bankruptcy, the trustee will schedule a creditors meeting. At the meeting, the trustee will review the paperwork and gather any other necessary information.
If a debtor fails to attend the meeting, the trustee may make a motion to dismiss the debtor’s case. Other reasons for dismissal by the trustee may include the debtor’s failure to provide a copy of income tax returns at least seven days before the creditors meeting or the failure to file a current income tax return.
In most cases, this creditors meeting is the only time the debtor will have to go to the courthouse.
If the trustee determines that you are in possession of nonexempt property, you may have to either give up the property or supply the trustee with money in the amount of the property’s value.
Sometimes, though, if the property doesn’t have much value or would be too difficult for the trustee to sell, trustees will occasionally “abandon” the property, essentially allowing you to keep it despite the fact that it is nonexempt.
The Discharge of Debt under Chapter 7:
A few months after the creditors meeting, the bankruptcy court will hold a discharge hearing. A debtor’s unsecured debt, debt that is unsecured by property, is discharged. Secured debt, such as a car loan or a mortgage, receives different treatment. At the beginning of the bankruptcy process, the debtor selected to do one of the following: pay the creditor for the replacement value of the property, return the property to the creditor, or “reaffirm” or agree to new contract terms with the creditor.
Under Chapter 7 bankruptcy rules, the debtor must repay some debt. The following debt remains after a bankruptcy discharge:
Chapter 13 bankruptcy could be a better option? Chapter 13 allows a debtor to repay debts over time in a court approved repayment plan. In general, the debtor may also keep their property.
(Note: Bankruptcy is completed approximately in about three months.)
An experienced Richmond Bankruptcy Lawyers knows that at times that Chapter 7 may not be the best choice you can make. So let’s talk a little about Chapter 13 Bankruptcy filings.
Chapter 13 Bankruptcy:
A debtor may choose to file for either a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. While a Chapter 13 bankruptcy reorganizes debt into a repayment plan, a Chapter 7 bankruptcy, also known as a “liquidation” bankruptcy, erases all debt that is legally capable of expungement. Chapter 7 bankruptcy rules determine who qualifies, how to file, and what debt is eligible for discharge.
Call today for your FREE Consultation:
(202) 345-4567
Joe Smith, Attorney
Richmond Bankruptcy Lawyers
September 11, 2011 No Comments
