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Is Bankruptcy Right For Me?
Are creditors harassing you? Are you being called at home and work, both day and night? Are you having difficulty paying your bills? Are you worried about what will happen to you? If so, bankruptcy may be for you.

It is important to consult with an attorney before making any decisions regarding the filing of a bankruptcy. The petition filing date is important because it is a date from which many other statutory rules or obligations are measured.

If you have mounting bills which seem insurmountable and you need to get a fresh start, filing for bankruptcy may be for you. If you have experienced some temporary set-back, for example, a recent drop in business sales, an injury which has caused you to be unemployed for some time, or some other type of set-back, bankruptcy can help by giving you time to reorganize and pay off your creditors over time.

Furthermore, after you file your creditors are stopped from taking any legal action or enforcement action against you, including phone calls and letters. thus giving you a breathing space to remedy your financial affairs.

What Chapter of the Bankruptcy Code should I choose?
Although there are several different types of bankruptcy, we shall discuss the three most often used, which are commonly known as Chapter 7, Chapter 11, and Chapter 13.

A Chapter 7 bankruptcy is a complete liquidation and can be filed by individuals or businesses. In a Chapter 7 case a trustee is appointed who will gather all the non-exempt property of the individual.

After the case is closed, all the claims are discharged, and you get a fresh start. An individual does not have to be insolvent to file a Chapter 7, so if you are not earning enough income to pay your bills as they become due, a Chapter 7 may be appropriate.

In a Chapter 7, you are entitled to keep exempt property. This includes money, furniture, clothes, home furnishings, retirement plans, life insurance policies, a car , a ten thousand dollar homestead exemption, and more. There are limitations on what property is exempt and there are further restrictions on the value of exempt property. Before filing a Chapter 7, it is important to know what will be exempt property that you may keep and what is non-exempt which you will not be able to keep.

After you file the Chapter 7 bankruptcy, any money you earn, is yours to keep and will not be used to pay off creditors. Further, even if you do not have enough non-exempt property to pay off your creditors, you can still be given a full discharge of all your debts.

A Chapter 11 case is appropriate for a business that is worth more in operation than its liquidated value under a Chapter 7. Hence, a Chapter 11 is commonly referred to as a "reorganization" bankruptcy.

In this type of bankruptcy, the business proposes a plan which states how the creditors will be paid off over time. During the bankruptcy the business continues to be managed by the owners. Essentially, anyone who can file a Chapter 7 can file a Chapter 11. However, an individual who does not have a business but wishes to "reorganize" will usually file under Chapter 13, not Chapter 11.

A Chapter 13 may only be filed by an individual with regular income who owes less than one million dollars. There are other restrictions also imposed on who may file.

In this type of case, the individual proposes a payout plan which provides for the submission of part of his/her future income to pay off the creditors. The plan can extend up to five years. In this way, the individual gets to keep all his/her assets. This is usually the type of bankruptcy you file when you have a home or property with equity, and have not been able to keep up with payments.

In a Chapter 13, you will make payments pursuant to your plan, each month to the trustee who will pay off your creditors. After you have completed your plan, which can be spread out up to five years, you will be given a discharge. Thus, unlike a Chapter 7 bankruptcy, you get to keep all your property. Your plan can provide to pay off your creditors fully or partially, depending on your assets.

If you are unable to meet your current financial obligations, bankruptcy may be an option to help you. Be sure to consult with an attorney to help you in making the right decision.

Which Type is For Me?
It is important to consult with an attorney before making any decisions regarding the filing of a bankruptcy. The filing of the petition is an important date because it is a date from which many other statutory rules or obligations are measured.

If you have mounting bills which seem insurmountable and you need to obtain a fresh start, a bankruptcy may be for you.

If you have experienced some temporary set-back, for example, a recent drop in business sales, an injury which has caused you to be unemployed for some time, or some other type of set-back, bankruptcy can help by giving you time to reorganize and pay off your creditors over time.

Furthermore, upon filing, your creditors are stopped from taking any legal action or enforcement action against you, including phone calls and letters. This will give you breathing space to remedy your financial affairs.

If you are unable to meet your current financial obligations, bankruptcy may be an option to help you. Be sure to consult with an attorney to help you in making the right decision.


 



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This website provides general information. Due to complexities and constant changes in the law, exceptions to general principles of law, and variations of state laws, seek professional legal advice before acting on any matter!

Some of the information on this website only pertains to certain states. Accordingly seek professional legal advice before acting on any matter.