Bankruptcy

Bankruptcy is here to assist you with getting a fresh start.

If your financial difficulties arise from business or personal debts, we can help you. As we prepare your bankruptcy, we can simultaneously, protect your interests in collection lawsuits or other legal claims related to you and your business and serve as a single point of contact for all creditors. Our goal is to reduce your stress by answering your most commonly asked questions and preparing you for the bankruptcy process.

Chapter 7 bankruptcy

Chapter 7 bankruptcy is the most common type of bankruptcy and is often referred to as a liquidation bankruptcy. In Chapter 7, all of the debtors assets, other than those types of assets specifically exempt from liquidation by statute, are turned over to a bankruptcy trustee for sale. Sale proceeds, if any, are distributed among the creditors. Chapter 7 bankruptcy is used to eliminate, or discharge, primarily unsecured debts such as credit cards or medical bills. Chapter 7 does not eliminate secured debts, such as vehicles (unless the secured item is surrendered). Chapter 7 will not save a house from foreclosure or a car from repossession if you are delinquent in payments.

Under the new bankruptcy law, only people who pass the means test may file a Chapter 7 bankruptcy. People who fail the means test have to file Chapter 13 bankruptcy provided you are under Chapter 13 debt ceilings. The means test is a complicated mathematical formula. We can run a means test after collecting the necessary information from you.

Chapter 13 bankruptcy

Chapter 13 bankruptcy results in a plan to repay all or part of your debts and can be used to discharge certain debts. Chapter 13 is used most often to save a house from a foreclosure sale. You can use Chapter 13 to strip a second mortgage and treat the second mortgage as you would any other unsecured debt. Chapter 13 is also useful to minimize some tax debts and to establish an affordable plan to pay tax debt that cannot be eliminated. Chapter 13 bankruptcy is available to debtors with regular income. A business cannot file Chapter 13. In addition, there are upper limits on the amount of the individual's secured and unsecured debts in Chapter 13 cases.

Who can file bankruptcy?

Any person residing, domiciled, or having property or a place of business in the United States may file Chapter 7. A business may also file a Chapter 7. The new bankruptcy law includes a means test which applies an income vs. expense test in order to file Chapter 7 bankruptcy. If the means test indicates you have enough disposable income to pay a significant portion of your unsecured debts you have to file under Chapter 13, provided you meet Chapter 13 debt ceilings. There are currently no minimum or maximum income limits or other income requirements or limitations for people whose unsecured debts are primarily non-consumer debts such as investment liability, business losses, taxes, or student loans.

Can a creditor come after me after bankruptcy?

Technically, bankruptcy doesn't really erase your debts. Bankruptcy is actually a permanent injunction against the enforcement of those debts. The difference is only theoretical in most contexts, but it has an important impact: If there was a co-debtor on your debt, that co-debtor is still on the hook for whatever is still owed. A creditor who knowingly attempts to collect a debt that has been discharged in bankruptcy is, in effect, violating a court order. Continuing to do so after being informed of the bankruptcy violates federal law. Note that creditors who hold non-discharged debts (debts you reaffirmed, debts that are not dischargeable at all, etc.) are perfectly entitled to collect as if you had not filed bankruptcy at all, so you must pay attention to which debt is being collected before taking aggressive action against such a creditor. Also note that some debt collection agencies are actively trying to collect debts which they have no legal right to collect; debts barred by a statute of limitations, debts discharged in bankruptcy, et cetera.

Do not allow debt collectors to intimidate you! Federal law regulates how debt collectors can behave. In particular, they are not allowed to harass you, and must stop contacting you after you inform them to stop such contact. If they refuse to do so, they may be liable under federal law to pay you damages, plus pay your attorney's fees for the action forcing them to stop. Consult my office immediately for further instructions if you find yourself in this situation.