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A bankruptcy filing is a legal proceeding that enables a debtor to repay debts from his or her creditors. For individuals who are struggling with debt and financial problems, filing bankruptcy would be beneficial. It allows them to have a fresh start and to improve their lives through proper financial management.
There are different bankruptcy options that you may choose from. The choice depends on the types of debt you owe, your monthly income, and living expenses, among other factors. Bankruptcy lawyers can help you understand the advantages and disadvantages of each chapter. It is also important that you understand the basics of bankruptcy law and the bankruptcy process before you proceed with filing a bankruptcy petition.
The two most common types of bankruptcy are Chapter 7, which is also called liquidation bankruptcy, and Chapter 13, which is also called a reorganization bankruptcy. A bankruptcy means test is also used to determine the right bankruptcy option for your specific circumstance.
A bankruptcy proceeding begins when an individual files a bankruptcy petition. This is done by submitting relevant papers and supporting documents to the bankruptcy court. Once the court has approved the petition in bankruptcy, an automatic stay will take effect. An automatic stay protects a debtor from creditor harassment. It prohibits any collection activities from debt collectors, including phone calls, emails, wage garnishment, and foreclosure.
What are the advantages when you file for bankruptcy?
Chapter 7 and Chapter 13 bankruptcy work differently. When filing Chapter 7, it would only take up to three to four months for you to wipe out your debts. On the other hand, a Chapter 13 bankruptcy will take up to three to five years, or the time needed to complete the agreed debt repayment plan. However, all the remaining unsecured debt after the completion of your payment plan will be discharged.
Chapter 7 Bankruptcy
In declaring bankruptcy, you must be aware of the qualifications for the different bankruptcy forms. Liquidation bankruptcy is primarily for those individuals who do not have a large amount of income. In Chapter 7, a debtor must surrender his or her nonexempt assets to be able to pay back loans. The bankruptcy trustee will liquidate properties and distribute the funds to the creditors. If you have enough revenue to repay your creditors, you will be able to take full advantage of the additional benefits given by a reorganization bankruptcy instead.
Chapter 13 Bankruptcy
When filing bankruptcy Chapter 13, you may be able to secure your assets while paying your debts. This chapter would stop foreclosure and compel the creditor to approve a debt repayment plan that would enable you to keep up for unpaid payments. In this case, you must prove that you have sufficient income to pay off loans and make timely monthly payments in the future.
Chapter 13 bankruptcy also allows an individual to keep his or her assets that are not included in the bankruptcy exemption. Another advantage of filing Chapter 13 is the fact that you may be able to “cramdown” secured debts if the asset is worth less than the value owed. Bankruptcy Chapter 13 has a proceeding that allows filers to reduce the liability to the current value. However, the cramdown clause may not be used by filers to decrease the mortgage of a residential home.
Bankruptcy filings provide relief from an overwhelming amount of debt. However, there are obligations that a bankruptcy filing cannot eliminate:

1.         In itself, a bankruptcy filing cannot magically stop a secured creditor from foreclosing or repossessing property. A bankruptcy discharge can wipe out debts, but it cannot eliminate liens. A lien enables the creditor to take assets, sell them and incorporate the proceeds into the balance of a debt. Until the loan is repaid, the lien gets to stay on the property. The lender may pursue his lien rights for foreclosure as long as the mortgage remains unpaid. A repayment plan can instead allow you to make current missed payments for a longer period.
2.         Filing for bankruptcy cannot discharge child support and alimony. These obligations must be paid in full.
3.         When you file bankruptcy, student loan debt may only be forgiven if you can demonstrate that paying back the debt would cause you “undue hardship”. You must prove that you are not capable of paying your debts and that your capacity to pay in the future has very little probability.
4.         Bankruptcy proceedings cannot wipe-out tax debt. It is not easy to eliminate tax debt. However, for older unpaid tax loans, it can sometimes be possible.
5.         Bankruptcy cannot eliminate non-dischargeable debts such as criminal fines and penalties, debts you have missed to include in your paperwork, and debts involving personal injury and death. These debts will stay until your bankruptcy case is closed if you chose to file under Chapter 7. In Chapter 13, by the time you finish your proposed repayment plan, you are likely already able to pay back these debts in full.

A bankruptcy attorney will help you decide on the right bankruptcy chapter for you and assist with the actual filing.
Consulting an experienced bankruptcy lawyer is important to prevent any legal issues during the proceeding. Contact us at the Northwest Debt Relief Law Firm for legal help and assistance.
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The post What are the Advantages When You File Bankruptcy? appeared first on Vancouver Bankruptcy Attorney | Northwest Debt Relief Law Firm.

There are things you should consider before filing bankruptcy. It includes your eligibility to file bankruptcy, the types of debt you owe to your creditor, your monthly income, and living expenses. Bankruptcy enables a debtor to virtually pay all of his or her debts to creditors. You should take the opportunity to look into the specifics of each bankruptcy chapter. Doing so will enable you to decide on what would be the best option for you as you work on your bankruptcy case.
Hiring a bankruptcy attorney is important for you to understand relevant bankruptcy laws. Bankruptcy rules may be complicated. To avoid any issues during the bankruptcy process, it is beneficial for you to consult a reliable bankruptcy lawyer before you gather relevant documents and file for bankruptcy.
A bankruptcy proceeding starts when a filer submits a petition for bankruptcy to court. The bankruptcy court would evaluate your case and once they approve your bankruptcy petition, an automatic stay will be effective immediately. An automatic stay prohibits any collection activities from debt collectors. This would also stop phone calls, wage garnishment, foreclosure, and creditor harassment.
Struggling with debt is not easy. This is why declaring bankruptcy is important: it can help you have a fresh start with your finances. Filing a petition in bankruptcy has a lot of advantages. One of the main objectives of a bankruptcy filing, however, is for you to obtain a bankruptcy discharge. This will release you from the obligation of making payments for your debts.
It is difficult to repay debts while trying to meet your current needs. Understanding pertinent bankruptcy law will help you maximize the chance to rebuild your financial future. When filing bankruptcy, you need to provide financial statements and paperwork where you disclose all your assets and all the debts you owe.
Different types of debt can be discharged (in contrast to those that cannot be wiped-out). Dischargeable debts include unsecured debts like credit card bills and medical bills. Non-dischargeable debts, meanwhile, are secured debts, child support, alimony, student loan debt, and certain tax debt. You should know which types of debt are dischargeable and which are not when considering bankruptcy.
Bankruptcy lawyers can assist you on how to file a bankruptcy petition and will help you understand the advantages of available bankruptcy options for you.
What are the types of bankruptcy?
There are different types of bankruptcy. The most commonly used are Chapter 7 (liquidation bankruptcy) and Chapter 13 (reorganization bankruptcy). The usefulness of bankruptcy filings under each chapter will depend on your situation.
Filing Chapter 7 bankruptcy
When filing under Chapter 7, a bankruptcy trustee will be the one to liquidate and manage the sales of your nonexempt assets. The funds will then be distributed to your debt collectors.
A trustee is assigned for each bankruptcy case, who is tasked to manage transactions and evaluate claims. This is to prevent any interaction between the debtor and any creditor involved. This is helpful if you want to avoid any issues during the entire bankruptcy procedure.
At the end of the proceeding, a bankruptcy discharge can be obtained. This is usually after all your non-exempt assets have been sold.
It is important to be honest when providing information regarding your debts and financial statements to the bankruptcy court. If the court finds out that you did not fully disclose certain information, you may be sued for fraud and may be sentenced with fines and penalties.
Bankruptcy filing under Chapter 13
If you want to secure your properties while paying your debts, Chapter 13 is the best option for you. You may be able to save your home and vehicle while making payments to your creditors.
In Chapter 13, you will have to make a payment plan that will give you enough time to repay your debts. The debt-repayment plan would usually take three to five years. It would take longer than a Chapter 7 bankruptcy declaration but you will not be required to surrender any of your properties. Note, however, that the debt repayment plan must be realistic and is within your budget or ability to pay debts.
Failure to make regular payments would affect your bankruptcy filing and may cause a denial when obtaining a bankruptcy discharge.
What are the requirements for filing bankruptcy?
If you have decided to file for consumer bankruptcy, you must meet certain qualifications. A bankruptcy means test is used to determine the level of your monthly income, whether it qualifies for bankruptcy under Chapter 7 or Chapter 13. If you pass the means test, you must gather all documents regarding your properties and finances. You are required to fill out bankruptcy forms and then file a bankruptcy petition to the court.
Dealing with debt and financial problems is not easy. It is highly recommended to ask for legal help and assistance regarding your bankruptcy case. Contact us at Northwest Debt Relief Law Firm and have a fresh start with your finances.
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The post A Quick Guide on How to File Bankruptcy appeared first on Vancouver Bankruptcy Attorney | Northwest Debt Relief Law Firm.

The three toughest questions at your bankruptcy hearing. The three toughest bankruptcy hearing questions are NOT what most people expect.  The bankruptcy trustee does NOT ask you to explain how you got into this mess. They are not asking about your plans for the future.  And the creditors are NOT there demanding their money. Have […]
The post The three toughest questions at your bankruptcy hearing by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.

Most people having financial problems choose to file a petition in bankruptcy court. Bankruptcy attorneys get numerous calls and inquiries on such, particularly on related pros and cons.
The fact that rebuilding credit after bankruptcy can be difficult is indeed a down-side for some, but the bankruptcy filing in one’s credit report can be countered. Credit scores will improve and you will eventually be able to get credit. Furthermore, this minor disadvantage is worth the chance to pay back a creditor or even wipe out debts and have a fresh start at life.
Consumer bankruptcy (in contrast to business bankruptcy) are generally for those with medical debts or credit card debts. Note that each bankruptcy case is unique, and knowledge of the bankruptcy procedure is key to make the most out of your petition.
Bankruptcy laws can be quite perplexing. As would be explained by your bankruptcy attorney, the different types of bankruptcy work best in different circumstances. A Chapter 7 petition for bankruptcy is often best for a filer who wishes to have the unsecured debt discharged. A bankruptcy discharge is the court order that will essentially forgive or wipe out various types of debt. This is one of the main advantages of liquidation bankruptcy cases.
 Filing Chapter 7 could indeed be a good debt-relief option if your priorities include discharging your credit card debt, medical bills, and other unsecured debts. Take note, however, that not everyone can file bankruptcy and work on debt-settlement under this chapter.
A major concern for those wishing to file for Bankruptcy Chapter 7 is the fact that it can be difficult for a debtor to qualify for such. Part of the bankruptcy process is a means test that looks into an individual’s monthly income, living expenses, and capacity to repay outstanding debts
The bankruptcy means test looks into the monthly income of the debtor, which must be below the state median income. Otherwise, following the bankruptcy code, his or her total expenditure will be subtracted to get the value of “disposable income” that could be used in paying off creditors and lenders.
One disadvantage of Chapter 7 bankruptcy proceedings is the fact the trustee will liquidate non-exempt assets. While the list of exemptions can cover a lot, some bankrupt individuals who do not pass the means test or who wish to keep certain personal property opt for restructuring instead. Filing for bankruptcy under Chapter 13 would enable the filer to restructure whatever he or she owed and pay back most of it through a payment plan.
Essentially, if you file for bankruptcy under Chapter 13, you can stop foreclosure and repossession but would have to pay back what is owed in three to five years.
Bankruptcy law is strict. The first steps one must take when filing for bankruptcy include undergoing bankruptcy counseling, taking the means test, and contacting a reliable bankruptcy law firm.
For assistance on how to file or fill out paperwork and supporting documents for the bankruptcy court, give us a call. Contact Northwest Debt Relief Law Firm to consult with an experienced bankruptcy lawyer.
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The post Declaring Bankruptcy Chapter 7: Discharged Debt and the Means Test appeared first on Vancouver Bankruptcy Attorney | Northwest Debt Relief Law Firm.