There are times that financial problems can become simply overwhelming for either an individual or a business. When a person’s or business’s financial position becomes truly untenable, federal bankruptcy law provides several types of possible relief.
Should I Consider Filing Bankruptcy?
If you are considering filing a bankruptcy, here are some questions to consider to help decide if bankruptcy is the right option for you:
If you have already had a foreclosure, eviction, repossession or lawsuit filed against you, it is important that you contact an attorney immediately. Your options with regard to bankruptcy can change as these events begin to occur.
If you are in a situation where you are constantly struggling to pay your bills each month, but aren’t behind on any of your bills yet, it is a good idea to go ahead and discuss your bankruptcy options early on. Learning about all of your options can give you the maximum flexibility in trying to address your financial issues. While bankruptcy should not be considered your first option to resolve your financial issues, it should also not be your last option.
There are two types of bankruptcy protection available to individuals. An individual may either seek to have his debt structure reorganized under Chapter 13 so that he pays off his secured debts over a specific period of time or he may seek relief from his debts by liquidation under Chapter 7.
For first time filers, filing for bankruptcy protection under Chapter 7 or 13 prevents the creditors of the filer from doing anything to try to collect debts. This means the creditors cannot contact him, threaten him, or sue him.
Trustees are appointed under all Chapter 7 and Chapter 13 cases to evaluate the debtors assets and liabilities, and to assure that creditors receive all that they are allowed under the law.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy allows individual debtors with regular income to create a plan to repay their debts. Within 15 days of the bankruptcy filing, the debtor submits a proposed plan to retire the past due amount on any secured debt over a period of time not to exceed five years. The Court must approve the plan and the plan must pay off the secured debt and a percentage of the unsecured debt within the life time of the plan.
If the plan is successfully completed, the secured debts are brought current and the remaining unsecured debts are discharged. If the individual fails to make the payments required under the plan, the case may be dismissed.
An individual cannot file for Chapter 13 discharge if he has been granted a Chapter 7, 11, or 12 discharge within the past 4 years or Chapter 13 discharge within the past 2 years.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows the debtor to discharge all of his or its debts but at the price of liquidation of most of his or its assets. A Chapter 7 bankruptcy usually affords the debtor a “clean start.” As with Chapter 13, a Trustee is appointed by the court. The debts owed to unsecured creditors are either discharged or paid by the Trustee through the liquidation of the debtor’s assets.
An individual seeking to file a Chapter 7 proceeding must first satisfy a means test and an individual cannot file for Chapter 7 discharge if he has filed for Chapter 7 or 11 discharge within the past 8 years.
Our lawyers at Merritt Webb are anxious to represent your interests and ensure you receive just treatment from your creditors and that your assets are protected to the full extent of the law. If you want to determine if filing bankruptcy is the right answer for your situation, you may call us at 1.800.556.8480.
Not Legal Advice: Merritt Webb provides the information on this website as a public service. This website offers general information about the law only and hence is not intended to be, nor can it be, actual legal advice on any specific matter for any particular person. The use of information on this website or any link connected to this website or any form offered by this website cannot be taken as establishing any contractual, de facto, implied or other form of attorney-client privilege or relationship between Merritt Webb and the reader or user of this information, links, forms or documents found herein. Merritt Webb does not guarantee such forms, links, documents and information. Merritt Webb can only be responsible for the use of such information, forms or documents if they have been provided by Merritt Webb pursuant to an attorney client relationship between it and the user.
No guarantee as to currency of information: Due to how quickly the law can change without advance notice, the information contained in this website is not and cannot be guaranteed always to be completely up-to-date. We try to keep it current with frequent updates and review, but that is not always possible on a day-to-day basis.
No attorney-client relationship: No one can establish an attorney-client relationship with Merritt Webb merely by the use of this website or by sending or receiving information through this site or using any forms herein. Nor is any general information or document found on this website or sent to Merritt Webb unsolicited through this website considered privileged or confidential. An attorney-client relationship with Merritt Webb can be established ONLY by an express and written agreement signed by a Merritt Webb attorney to represent you.
Website responsibility: The attorneys responsible for this site are Joy Rhyne Webb (NC), 2525 Meridian Parkway, Suite 300, Durham, NC 27713 and Heather Caruso (SC, TN), 8910 Two Notch Road, Suite 400, Columbia, SC 29223.