Bankruptcy as a Positive Solution
Immeditely upon filing for Bankruptcy, all creditors would be prevented from continuing with any collection activity including law suits and phone calls.
Asare Law Firm, LLC. provides expert legal assistance to people with debt and bankruptcy problems. We offer professional representation and expert guidance, both designed to get you out of the hole and back on solid financial ground.
What are the different types of bankruptcies?
There are typically two types that are allowed for individual consumers - Chapter 7 and Chapter 13.
Chapter 7
Under a Chapter 7 you are allowed to wipe out debt and under a Chapter 13 you work out a plan to repay all the back payments that you are in arrears. There is a procedure in place for individuals to find out which course they will be allowed to take. Chapter 7 Bankruptcies are a way to get a fresh start. However, under the new law passed a few years ago, you must meet certain criteria before you will be allowed to file for Chapter 7 Bankruptcy protection. People who earn below the state median income of their state of residence automatically qualify to file for Chapter 7 Bankruptcy.
In the event that you are not allowed to file for Chapter 7, then you may still qualify for relief under Chapter 13. This is where you and your lawyer devise a plan of repayment and submit to the court a plan of how you propose to repay your debts and arrearages over period of three to five years. Under the chapter 13 plan, you pay the disposable income you have each month to the Bankruptcy trustee. Whatever debt is left at the end of the commitment period is discharged by the court.
The Credit Counseling Requirement:
There are also counseling requirements you must meet before you are allowed to file for Chapter 7 or Chapter 13. You must attend and receive a certificate of completion from a sanctioned credit counseling course. You will also be required to attend a second counseling course towards the end of your bankruptcy.
Visit www.annualCreditReport.com which is the official web site where consumers can obtain free credit reports from the three national credit-reporting companies.
BANKRUPTCY FAQ’s
What Is Bankruptcy? Will Bankruptcy Affect My Credit? Can I File for Bankruptcy? Do I have to attend the 341 Meeting of Creditors or Creditor Hearing? Can I keep my car in Bankruptcy? Usually, yes, you can keep your car in bankruptcy, with some exceptions. If you still owe money on the car, you might even be able to reduce the amount you pay back on the car if you bought it more than 2 1/2 years ago. But the court knows you need the car to drive to work, etc., so you can "exempt" (keep) some or all of the value of your car. The monetary value of the car that you can keep varies from state to state and whether they allow federal exemptions or "opt out." This is something to discuss with your lawyer in your state. A private employer may not discriminate with respect to employment if the discrimination is based solely upon the bankruptcy filing. The law prohibits the following forms of governmental discrimination: terminating an employee; discriminating with respect to hiring; or denying, revoking, suspending, or declining to renew a license, franchise, or similar privilege.
Bankruptcy is a legal proceeding in which a person can get a fresh financial start. Your right to file for bankruptcy is provided by federal law.
What Can Bankruptcy Do?
Bankruptcy will cancel your obligation to pay most, if not all, of your debts. This is called a discharge of your debts. Immediately after filing for Bankruptcy, and “automatic stay kicks in to:
Unfortunately, if you are behind on your bills, your credit may already be bad. Bankruptcy will probably not make things any worse. Since bankruptcy wipes out your debts, you are likely to be in a better position to pay your current bills, and you may be able to get new credit.
Yes, almost everyone is eligible to file for bankruptcy. Most people may elect to file Chapter 7 Bankruptcy if they wish to. However, a person with "above average" income, small household size and low household expenses, as determined by the "financial means" test, may not have the option of filing a Chapter 7 petition. Our services include performing the "financial means" test to determine your options under the law.
Can I only list certain debts in my Bankruptcy?
No. All debts must be listed, but you can reaffirm debts such as your home, car (s) and other secured loans. You can also make voluntary payments to family or medical providers if you wish.
Will I Have to Go to Court?
Yes. You must attend a hearing called a 341(a) meeting conducted by the bankruptcy trustee. An attorney from our office will be with you at all times and will fully protect your legal rights. We advise that you be present at the Meeting at least 20-30 minutes early so that we can meet with you before bankruptcy hearing with the bankruptcy trustee. Please bring your driver’s license and social security card or evidence of your social security number, such as a health insurance card or passport.
What do I do if I receive a bill or letter from one of my Creditors after I filed Bankruptcy?
Make a copy of your Bankruptcy Hearing Notice (the one that says 341 Meeting of Creditors) and send it certified mail to the Creditor along with the bill or letter.
I filed Bankruptcy but I keep getting phone calls from Creditors. What should I do?
You can tell the Creditor you filed Bankruptcy and give him your Case Number. Usually, this will prevent any further phone calls. If the Creditor persists, have him call our office.
If you file Bankruptcy, attendance at the 341 Meeting of Creditors is required. If you do not attend, your Chapter 7 or Chapter 13 Bankruptcy case will be dismissed. In a Chapter 13 Bankruptcy, you usually do not need to attend the Confirmation Hearing (where your Bankruptcy is formally approved by the bankruptcy judge), unless the bankruptcy attorney notifies you that you must attend.
How long is my credit affected if I file Bankruptcy?
A Bankruptcy is on your credit report for ten years. However, if you file Bankruptcy, either Chapter 13 or Chapter 7, your credit is affected for about 2 years.
Will filing Bankruptcy affect my spouse?
If your spouse is not a Joint Debtor or Joint Obligor on any of your Debts, filing either Chapter 13 Bankruptcy or Chapter 7 Bankruptcy will not affect them. Again, speak with one of our Bankruptcy Attorneys regarding exceptions to this rule.
Can I buy or sell a house if I file Bankruptcy?
Generally, you are eligible to buy a house within 1-2 years if you file either Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. Our office can assist you in this matter. If you wish to sell your Homestead in a Chapter 7 or Chapter 13 Bankruptcy you can generally do so and retain the proceeds. There are several limitations on your ability to do this and you should meet with our Bankruptcy Attorneys before selling your home.
How do I pay the Chapter 13 trustee?
You should receive a letter from the trustee with payment instructions. The trustee will accept money orders, cashier checks, and certified checks.
When are payments due to the Chapter 13 Trustee?
Your first payment is due 30 days after your case is filed. You will pay once a month for 36 to 60 months depending on your plan of repayment.
What debts are dischargeable in Chapter 7 Bankruptcy or Chapter 13 Bankruptcy?
Certain debts are dischargeable, meaning your Bankruptcy Attorney can eliminate those debts in a Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. These debts usually include credit cards, medical bills, unsecured loans, and old phone bills. In some cases tax debts can be discharged in a Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. Under some very limited circumstances, student loans can be discharged in a Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. Child support and alimony payments are almost never dischargeable.
In order to avoid the Chapter 7 Bankruptcy Trustee from taking my asset, can I put that asset in another person’s name?
If you put an asset that would not be protected in Bankruptcy in someone else's name, then the Chapter 7 Bankruptcy Trustee can avoid or reverse that transaction automatically within two years of the transfer if that individual is a family member. Even if you are past the two year mark, you can have some problems under the Fraudulent Conveyance Act if it is determined that you transferred that asset to a third party in order to avoid your Creditors. Once that transaction is reversed, the Chapter 7 Bankruptcy Trustee can sell that asset at a public auction. The Chapter 13 Bankruptcy Trustee cannot sell such asset but can seek to make a Debtors payment higher in a Chapter 13 Bankruptcy based upon such a transfer.
What if I miss a payment in my Chapter 13 Bankruptcy / Debt Consolidation?
If you miss a payment in the Chapter 13 Bankruptcy, your Bankruptcy Attorney can arrange with the Chapter 13 Bankruptcy Trustee to help you get caught up with the payments. If you are ever more than 30 days late again, the Bankruptcy Judge might dismiss your Chapter 13 Bankruptcy.
Will Bankruptcy Wipe Out All My Debts?
Yes, but Bankruptcy Will Not Wipe Out The Following Debts:
money owed for child support or alimony, fines, and some taxes; credit obtained by fraud and student loans.
What Property Can I Keep?
In bankruptcy you can keep all property which the law says is exempt. The amounts of the exemptions are doubled when a married couple files together. In determining your exempt property remember that value of property is not what you paid for it, but what it is worth today. For many items such as furniture and cars this will be considerably less than what you paid. Most debtors do not lose any property. The majority of all cases are administered as “No Asset” cases, meaning there are no assets that are both non-exempt and worth enough for the estate to pay the costs of administration. If you do have a large tax refund or other non-exempt asset that may be at risk, your attorney can advise you how to best protect it. Speak to our attorneys to find out about the different exemptions to protect your real and personal items.
Will I lose my job if I file for Bankruptcy?
How Chapter 7 Bankruptcy Can Help with Foreclosure
It may be that you’ll have to give up your home no matter what. In that case, filing for Chapter 7 bankruptcy will at least stall the sale and give you two or three more months to work things out with your lender. It will also help you save up some money during the process and cancel debt secured by your home.
During a Chapter 7 bankruptcy, you can live in your home for free during at least some of the months while your bankruptcy is pending - and perhaps several more after your case is closed. You can then use that money to help secure new shelter.
Chapter 7 bankruptcy will also cancel all the debt that is secured by your home, including the mortgage, as well as any second mortgages, home equity loans and credit card debt. Chapter 7 will also help you get rid of huge medical bills after and illness or surgery.
How Chapter 13 Bankruptcy Can Help with Foreclosure
Many people will do whatever they can to stay in their home for the indefinite future. If that describes you, and you’re behind on your mortgage payments with no feasible way to get current, the only way to keep your home is to file a Chapter 13 bankruptcy. Chapter 13 bankruptcy lets you pay off the arrearage over the length of a repayment plan you propose. Assuming you make all the required payments up to the end of the repayment plan, you’ll avoid foreclosure and keep your home.
Chapter 13 may also help you eliminate the payments on your second or third mortgage. That’s because, if your first mortgage is secured by the entire value of your home , you may no longer have any equity with which to secure the later mortgages. That allows the Chapter 13 court to “strip off” the second and third mortgages and recategorize them as unsecured debt – which, under Chapter 13, takes last priority and often does not have to be paid back at all.
A chapter 13 bankruptcy is also called a wage earner’s plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years. If the debtor’s current monthly income is less than the applicable state median, the plan will be for three years unless the court approves a longer period “for cause.” If the debtor’s current monthly income is greater than the applicable state median, the plan generally must be for five years. During this time the law forbids creditors from starting or continuing collection efforts.
Other Benefits of Bankruptcy:
One of the primary purposes of bankruptcy is to discharge certain debts to give an honest individual debtor a “fresh start.” The Bankruptcy Code will allow the debtor to keep certain “exempt” property. Among the schedules that an individual debtor will file is a schedule of “exempt” property such as a car, household items and clothing, which the debtor can keep.
Generally, excluding cases that are dismissed or converted, individual debtors receive a discharge in more than 99 percent of chapter 7 cases. A discharge releases individual debtors from personal liability for most debts and prevents the creditors owed those debts from taking any collection actions against the debtor.
We offer bankruptcy solutions to clients throughout New Jersey and New York, Belleville, Bloomfield, Brentwood, Caldwell, Cedar Grove, Clinton, East Orange, Fairfield, Glen Ridge, Irvington, Livingston, Maplewood, Millburn, Montclair, Newark, Newark Heights, North Caldwell, Northfield, Nutley, Orange, Pleasantdale, Roseland, Roseville, Short Hills, South Orange, Two Bridges, Upper Montclair, Verona, West Caldwell, West Orange, Bronx, Manhattan, Brooklyn, Essex County, Union County, Morris County and Hudson County.
Asare Law Firm is a Debt Relief Agency pursuant to Title 11 of the U.S. Code (Bankruptcy Abuse Prevention and Consumer Protection Act of 2005). We help our clients seek relief under the Bankruptcy Code.
