Author Archives: Canterbury Law Group

The path of Chapter 7 bankruptcy is well-established and should progress without unforeseen difficulties. Read on to learn more about what is involved with our overview of the procedures to follow.

Debt Analysis

Remember some debts cannot be discharged in Chapter 7 bankruptcy such as child support obligations, the majority of student loan balances, recent tax debt and child support obligations. If collateral has been pledged for a debt, if you are not current when you file for bankruptcy, the creditor may take the property, if you are not current following your case.

Property Exemptions Determinations

Every state has certain exemption laws statin the property types you can keep under Chapter 7 bankruptcy, For example, the majority of people can keep their retirement accounts, house furnishings, a reasonable car and some equity in a home. You will want to ensure what you can protect prior to filing.

Eligibility

The majority of people must take and pass a means test before they can qualify for a debt discharge in Chapter 7 bankruptcy (Some individuals include people whose debt is primarily from a business as well as some personnel from the military.) When your gross income is more than the median income for a family of your given size in the state where you reside – you may not qualify. If it is less, you will. Should you not qualify, toy will take the expenses allowed from the income to decide whether you will be permitted to utilize Chapter 7 bankruptcy.

Redeeming Or Reaffirming Secured Debts

If you want to keep a property you have pledged collateral on for a loan, you will need to keep paying the creditor if you wish to retain the property. When filing for bankruptcy you will decide if you want to redeem the property (by paying off the creditor is a lump sum payment) or reaffirm the property – usually meaning you agree to continue paying the creditor under the current terms. A third option can be to surrender the property, allowing the creditor to take it. If you live in certain areas, there may be other options available as rules do differ from state to state.

Filling Out Bankruptcy Forms

Although you will have to fill out forms that are several dozen pages in length – the yare important because they tell the court about your debts, property, expenses, incomes and previous transactions. You will also list your creditors as well as your property exemptions and make decisions regarding any secured debts you have. Lastly, you will disclose any property transactions occurring in the previous ten years prior to your bankruptcy case.

Credit Counseling Course

A credit counseling course is mandatory for individuals wanting to file for bankruptcy. Very occasionally it may be done, shortly after filing for bankruptcy.

Filing The Forms

Your case gets officially under way when you file your petition. The majority of people file all the forms at once, but if time is of the essence there is an option for emergency filing.

Filing Fees And Fee Waiver Requests

When you file the necessary forms, you will pay a fee for filing. You may request the court to split the payments into quarters if you cannot afford the filing fees up front. If you cannot pay at all, you will need to apply for a waiver of fees by filling out the fee waiver application and presenting it with your bankruptcy petition. A judge will then make a determination but the income or your household may not exceed 150 percent of the federal poverty guidelines.

Document Submission

The bankruptcy trustee will require documents that show evidence of the information you supplied in the bankruptcy filing forms. Expect to send along paycheck stubs, tax returns, bank statements, profit and loss statements,

Meeting Time

Usually you will only need to attend a single meeting at the court with a trustee. The trustee will verify your identification and will ask the standard questions that are needed to be answered by all debtors as well as specific questions relevant to your case. It is possible a creditor or two or more, may appear but this is not usually the case.

Filing of Objections And/Or Motions

If you want to dispute acclaim from a creditor or you are seeking the elimination of certain liens – you will need to tackle these matters before the closure of your bankruptcy case. However, if you overlook a lien, the majority of courts will allow you to revisit the case at a later time.

Winding Up Secured Debts

In your bankruptcy forms you explained how you would handle debts that have been secured. These matters will have to be addressed before your case can be closed. For example, if you promised to return a car to your lender you have to make sure said car is available.

Debtor Education Course

Once paperwork has been filed you will need to complete a debtor education course before your discharge can be obtained. You will not get a discharge if you fail to file the certification showing you have completed this course. This may become a major expense as you will likely have to a file another motion as well as an additional filing fee so the case can be reopened.

Discharge

When a successful bankruptcy has been completed the court will issue an order that will discharge all of your debts that qualify. Once this happens, you no longer are under a legal obligation to pay the debt and the there is no legal approaches the creditor can make to obtain payment.

Source: O’Neill, Cara. “Filing a Chapter 7 Bankruptcy: Basic Steps.” Www.nolo.com, Nolo, 12 Nov. 2014, www.nolo.com/legal-encyclopedia/chapter-7-bankruptcy-29454.html.

The purpose of bankruptcy is to find a way forward with people who have large amount of debt while treating their creditors in a fair and equitable manner. The debtor often sees this process as a “fresh start” without the specter of looming bills.

Chapter 7 Bankruptcy

When you agree a trustee can take and sell some assets and/or property to pay back debt in exchange for wiping away the debt that qualifies for Chapter 7 Bankruptcy. You can also maintain property that is exempt and protected by state law.

This “fresh start” wipes out debts such as medical bills, personal loans and credit card balances taking a streamlined approach without the demands of a monthly plan for repayment. For this to happen the debtor must agree the person appointed as the bankruptcy trustee can sell what is known as non-exempt property. The proceeds are then sent to the creditors according to a system to rank their priority.

It is not needed for the debtor to relinquish all their assets. What you need to maintain your home and continue working, with a reasonable vehicle. Often the debtor may keep all of their personal property but what can be kept does differ from state to state.

The following is considered non-dischargeable debt under Chapter 7 Bankruptcy:

• Student loan debt unless I can be demonstrated it would be incorrect to repay
• Awards originating from wrongful death or injury from being intoxicated while operating a vehicle
• Unpaid income taxes accrued over the last three years (and in some cases longer)
• Child support, spousal support and obligations for domestic support

Both individuals and businesses can utilize Chapter 7 Bankruptcy and the process usually takes between four to six months to complete.

Eligibility

You will not be able to file a Chapter 7 Bankruptcy is most of your debt is consumer debt and you have sufficient income to finance a Chapter 13 plan for repayment. You can also only do this once every eight years.

Property

As we said above you can keep what you need to maintain your home and continue working, with a reasonable vehicle. Often the debtor may keep all of their personal property but what can be kept does differ from state to state.

Secured Debt

You will have the option of allowing the creditor to repossess a secured debt or to maintain ownership of the property as well as maintaining the payments as per the sales contract.

Non-dischargeable Business Debt

Business debt is not wiped out in Chapter 7 Bankruptcy. Other than sole proprietors it is seldom a business will even file for this kind of bankruptcy as there are easier ways to wind down a business enterprise. When assets need to be sold in a manner that is transparent it may be a good option, however.

Chapter 13 Bankruptcy

This form of bankruptcy helps high-income earning individuals reorganize their debt. With this form of bankruptcy. Although you can retain your property, creditors must be repaid as part of a three to five-year Chapter 13 Bankruptcy plan as well as any income that is discretionary going towards the total owed as defined by the rules of bankruptcy.

Repayment

You will have to propose a plan for repayment detailing your debts for the last three to five years and how you intend to pay them. The minimum amount for this is based on how much you earn, how much you have to repay as well as how much is owed and the value of your property that is non-exempt.

Debt Limitation

The maximum limit for secured debt is $1,257,850 and no more than $419,275 in debt that is not secured.

Mortgage And Car Payment Arrears

Chapter 13 Bankruptcy can also be used to pay car and house payments that have fallen in arrears to avoid both repossession and foreclosure.

Other Bankruptcy Reorganization Options

There are two other options known as Chapter 11 Bankruptcy and Chapter 12 Bankruptcy. Chapter 11 bankruptcy is normally used by businesses to reorganize their financial affairs when they are struggling to survive. Individuals whose total debt exceeds the amount offered by Chapter 13 Bankruptcy can also file for Chapter 11 Bankruptcy. Chapter 12 bankruptcy has similar qualities but a minimum of 80% of your debts must be from running a family owned fishery or farm. To pursue this form of bankruptcy, speaking to a lawyer is essential.

Source: O’Neill, Cara. “What Is Bankruptcy?” Www.nolo.com, Nolo, 23 Nov. 2016, www.nolo.com/legal-encyclopedia/chapter-7-13-bankruptcy-basics-29829.html.