Bankruptcy Services

Consumer Bankruptcy

Individuals may declare bankruptcy once they have determined that it has become impossible to pay off creditors in an acceptable time frame.  In some circumstances, individuals or companies may walk away with a fresh start after declaring bankruptcy under Chapter 7.

When Should You File?

If the sum total of your liabilities exceed the value of your assets and you cannot pay your debt in a reasonable time, you are insolvent and corrective action should be taken.  The legal definition of insolvency places many at risk who previously thought they were on solid financial ground.  Bankruptcy gives many a chance at a fresh start new beginning to start over from a strong financial standpoint. Most of debts are relieved after bankruptcy filing has been completed.  In certain circumstances, repayment of all or part of your debt may be indicated or even preferred.  For instance, if you stand to lose your home to foreclosure, you cure default in payments over time without interest or penalty.  Through personal reorganization under Chapter 13, a family may rescue a vehicle from repossession, catch up on past due mortgage payments without interest or penalty, reclassify subordinate liens or second mortgages to make your home more affordable and reverse your fortunes becoming financially solvent once more.

Forgiveness of Debt

Although some debts are not affected by a bankruptcy discharge, these can be paid under a wage earner plan out of creditors pockets with lesser priority when you personally reorganize under Chapter 13 Personal Reorganization.  Therefore, it is possible to catch up on past due taxes and child or spousal support with plan payments because those with lesser priority are not entitled to full repayment.  Once a discharge is obtained, these creditors claims are extinguished to the extent they have not been paid.  This allows those engaged in Wage Earner Plans to complete their plans for pennies on the dollar.  Under Chapter 7, debts such as certain taxes, criminal restitution and domestic support obligations generally avoid discharge.

Retention of Assets

Although some believe assets are placed at risk, this is only partially true.  Under bankruptcy laws, only non-essential assets are sold to order to pay off creditors, exemptions are a measure of what you can keep.  In other words, only assets which you neither need nor may not want are at risk of loss.  Imagine that you have an expensive cabin cruiser or a jewelry collection rivaling Tiffany’s.  These types of things are not deemed deemed to be necessary for maintenance and support and any court will wonder why you just don’t sell some of your bling to pay your creditors.  However, families and individuals are entitled to liberally and fully exempt things which are necessary for their support such as house, car, household furnishings and retirement savings to name a few.  Therefore, with careful exemption planning,  nothing is left unprotected.  Only assets which are deemed unnecessary are placed at risk of loss through bankruptcy liquidation.  Use your imagination here as items like cabin cruisers, expensive jewelry or luxury automobiles owned free and clear are placed at risk.   If these items are left without protection and you stand to lose some assets, we WILL tell you before any action is taken.  In fact, all assets needed for your support such as cars, household goods and furnishings, jewelry are fully expempted under law.  Also, qualified retirement plans are fully expemt under the law.  Through personal reorganization you can cure mortgage payments over time without penalty or interest, pay automobile loans at market value and retain all of your assets while your creditors’ needs are assessed.

The Chapters in Bankruptcy are as follows

  • Chapter 7 – individuals and companies
  • Chapter 12 – farmers, fisherman
  • Chapter 13 – individuals with steady income
  • Chapter 15 – international cases

Contact us today to learn more about your options under the current bankruptcy laws. We’re here to help.


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