blank
Written by Canterbury Law Group

Can I File for Bankruptcy Without My Spouse?

blank

You can file for bankruptcy without your spouse. This process is known as “individual bankruptcy,” and it allows one spouse to seek debt relief without involving the other. Here are some key points to consider:

Types of Bankruptcy

  1. Chapter 7 Bankruptcy:
    • Individual Filing: If you file for Chapter 7 bankruptcy individually, only your debts and assets will be considered. Your spouse’s income and assets are generally not included, but their income may be considered to determine your eligibility based on the means test.
    • Means Test: The means test considers household income, so your spouse’s income might be included to determine if you qualify for Chapter 7.
  2. Chapter 13 Bankruptcy:
    • Individual Filing: In a Chapter 13 bankruptcy, your repayment plan will be based on your individual income and debts. However, the household income, including your spouse’s income, may be considered to determine your repayment ability.
    • Repayment Plan: Your spouse is not directly involved in the repayment plan, but their income may affect the overall household budget and repayment amount.

Considerations

  1. Joint Debts:
    • If you and your spouse have joint debts, your bankruptcy filing will impact those debts. For example, if you discharge a joint debt in your bankruptcy, your spouse will still be responsible for repaying it unless they also file for bankruptcy.
  2. Property and Assets:
    • Community Property States: In community property states, most property acquired during the marriage is considered jointly owned, regardless of whose name is on the title. Filing for bankruptcy in these states may involve both spouses’ property.
    • Non-Community Property States: In non-community property states, the bankruptcy will generally only affect the filing spouse’s assets.
  3. Impact on Spouse’s Credit:
    • Filing for bankruptcy individually will not directly impact your spouse’s credit score. However, if you have joint accounts or debts, your bankruptcy can affect their credit indirectly.
  4. Income Considerations:
    • Even if your spouse is not filing, their income may be considered to determine your eligibility for bankruptcy and the terms of your repayment plan. This is especially relevant in Chapter 13 filings.

Benefits of Individual Filing

  • Separate Finances: If your spouse has a good credit score and separate finances, filing individually can help protect their credit.
  • Targeted Debt Relief: Allows you to address your debts specifically without involving your spouse.

When to Consider Joint Filing

  • Significant Joint Debts: If you and your spouse have significant joint debts, filing together may provide more comprehensive debt relief.
  • Combined Financial Issues: If both spouses are facing financial difficulties, joint filing can streamline the process and reduce overall legal fees.

Legal Advice

  • Consult an Attorney: It’s important to consult with a bankruptcy attorney to understand the implications of filing individually versus jointly. An attorney can help you navigate the complexities of the process and determine the best course of action based on your specific situation.

Speak With Our Bankruptcy Lawyers In Phoenix & Scottsdale

Canterbury Law Group should be your first choice for any bankruptcy evaluation. Our experienced professionals will work with you to obtain the best possible outcome. You can on the firm to represent you well so you can move on with your life. Call today for an initial consultation. We can assist with all types of bankruptcies including Business BankruptcyChapter 7 BankruptcyCreditor Representation, Chapter 5 ClaimsChapter 13 Bankruptcy, Business RestructuringChapter 11 Bankruptcy, and more.

*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.

blank
Written by Canterbury Law Group

Low Cost Bankruptcy

Low Cost Bankruptcy

Low Cost Bankruptcy

Finding low-cost bankruptcy options can be challenging, but there are some resources and strategies that individuals facing financial difficulties can consider. Here are some potential avenues for low-cost bankruptcy:

1. Legal Aid Organizations

  1. Legal Aid Societies: Many communities have legal aid societies or organizations that provide free or low-cost legal assistance to low-income individuals. These organizations may offer bankruptcy services or referrals to affordable legal representation.

2. Pro Bono Services

  1. Pro Bono Attorneys: Some attorneys offer pro bono (free) or reduced-fee services to clients who cannot afford traditional legal representation. Contacting local bar associations or legal aid organizations may help connect individuals with attorneys willing to take on bankruptcy cases pro bono or at reduced rates.

3. Bankruptcy Clinics and Workshops

  1. Bankruptcy Clinics: Some law schools and nonprofit organizations host bankruptcy clinics or workshops where individuals can receive basic legal advice and assistance with filing bankruptcy forms. These clinics are often staffed by law students, attorneys, or volunteers and may offer services at reduced rates or for free.

4. Self-Help Resources

  1. Bankruptcy Forms: The United States Courts website provides free access to bankruptcy forms and instructions, allowing individuals to file for bankruptcy pro se (without an attorney). While filing pro se can be challenging, it may be a cost-effective option for individuals with straightforward bankruptcy cases and limited financial resources.

5. Fee Waivers

  1. Court Filing Fees: Some individuals may qualify for a waiver of the court filing fees associated with bankruptcy if they meet certain income criteria. Contacting the bankruptcy court or consulting with a legal aid organization can help determine eligibility for fee waivers.

6. Payment Plans

  1. Attorney Payment Plans: Some attorneys may offer payment plans or flexible payment options to clients who cannot afford to pay their entire legal fee upfront. Individuals should inquire about payment arrangements when consulting with potential bankruptcy attorneys.

7. Consider Chapter 7 Bankruptcy

  1. Chapter 7 vs. Chapter 13: Chapter 7 bankruptcy typically involves fewer legal fees and administrative costs compared to Chapter 13 bankruptcy, as it does not require the debtor to create and adhere to a repayment plan. Depending on the individual’s financial situation, Chapter 7 bankruptcy may be a more affordable option.

Conclusion

While bankruptcy can be a complex legal process, individuals facing financial hardship may be able to find low-cost or free resources to help them navigate the bankruptcy process. Exploring options such as legal aid organizations, pro bono services, bankruptcy clinics, and self-help resources can provide individuals with the assistance they need to seek relief from overwhelming debt without incurring significant legal fees. It’s essential to research available resources and options carefully and to seek guidance from qualified professionals when considering bankruptcy.

blank
Written by Canterbury Law Group

Debts that Remain After a Chapter 13 Discharge

Debts that Remain After a Chapter 13 Discharge

In a Chapter 13 bankruptcy, the debtor creates a repayment plan to gradually pay off their debts over a period of three to five years. Once the repayment plan is successfully completed, any remaining qualifying debts are typically discharged, providing the debtor with a fresh financial start. However, certain types of debts may remain after a Chapter 13 discharge. Here are some common examples:

1. Non-Dischargeable Debts

  1. Priority Debts:
    • Certain debts are considered priority debts and are not dischargeable in bankruptcy. These may include:
      • Domestic support obligations (child support, alimony)
      • Certain tax debts
      • Government fines and penalties
  2. Secured Debts Not Paid Off:
    • If the debtor’s repayment plan did not fully pay off the outstanding balance on secured debts (debts secured by collateral, such as a mortgage or car loan), the remaining balance may survive the Chapter 13 discharge.
    • However, the debtor may have options to address these remaining secured debts, such as negotiating with the creditor or entering into a reaffirmation agreement.

2. Debts Excluded from Discharge

  1. Certain Tax Debts:
    • While some tax debts may be dischargeable in Chapter 13 bankruptcy, others, such as recent income tax debts or tax debts associated with fraud, may not be dischargeable.
    • Debts resulting from tax liens may also survive the discharge if not fully paid off during the bankruptcy process.
  2. Student Loans:
    • Student loan debts are generally not dischargeable in bankruptcy unless the debtor can demonstrate undue hardship, which is a challenging standard to meet.
    • While the discharge does not eliminate student loan debt, the debtor may still benefit from the restructuring of other debts through the Chapter 13 repayment plan.
  3. Certain Debts Incurred Through Fraud or Willful Injury:
    • Debts resulting from fraud, embezzlement, or willful and malicious injury to another person or property are typically not dischargeable in bankruptcy.

3. Debts Not Included in the Bankruptcy Filing

  1. Post-Petition Debts:
    • Debts incurred after the Chapter 13 bankruptcy filing are not included in the bankruptcy case and are not subject to the discharge.
    • Any new debts accrued during the repayment plan period or after the completion of the plan will remain the debtor’s responsibility.

While Chapter 13 bankruptcy can provide relief from many types of debts, certain debts may survive the discharge. It’s essential for debtors to understand which debts are dischargeable and which are not before filing for bankruptcy. Consulting with a qualified bankruptcy attorney can provide personalized guidance based on the debtor’s specific financial situation and goals.

Filing for bankruptcy can affect certain types of tax debt, but it does not automatically make all tax obligations disappear. The treatment of tax debt in bankruptcy depends on the type of tax, the specific circumstances, and the chapter of bankruptcy you file.

General Rules:

  • Tax debt is treated differently than other debts in bankruptcy. In most cases, it’s considered a “priority debt,” meaning it gets higher priority for repayment compared to other unsecured debts.
  • Discharging (eliminating) your tax debt through bankruptcy is generally difficult. You’ll need to meet specific criteria and exceptions.

Here’s a General Overview:

  1. Chapter 7 Bankruptcy:
    • In a Chapter 7 bankruptcy, your non-exempt assets may be liquidated to pay off creditors, but certain debts, including some tax debts, may be discharged. However, not all tax debts are dischargeable. To be dischargeable in Chapter 7, the tax debt must meet specific criteria, including that it is income tax debt, the tax return was filed on time, and the tax assessment is at least three years old.
  2. Chapter 13 Bankruptcy:
    • Chapter 13 bankruptcy involves a repayment plan over three to five years. While you won’t necessarily eliminate tax debt in a Chapter 13 case, you may be able to include tax debt in your repayment plan, allowing you to pay it back over time. This can provide a structured way to address tax arrears.
  3. Priority Tax Debt:
    • Some tax debts are considered priority debts and may not be dischargeable in bankruptcy. Priority tax debts include recent income tax debts, certain payroll taxes, and taxes associated with fraud. Priority tax debts are generally not dischargeable, but a Chapter 13 plan can help you manage the repayment.
  4. Tax Liens:
    • Bankruptcy may not remove tax liens. While the personal obligation to pay the tax debt may be discharged, a tax lien secured by property may survive bankruptcy. The IRS or state taxing authority may still have a claim on your property, and you may need to address the lien separately.
  5. Professional Advice:
    • It’s crucial to consult with a tax attorney or bankruptcy attorney to assess your specific tax situation. They can provide guidance on the dischargeability of tax debt based on the applicable bankruptcy laws and help you navigate the complexities of the process.

In summary, while bankruptcy can address certain tax debts, not all tax obligations are dischargeable, and the treatment of tax debt in bankruptcy can be complex. Seeking professional advice is essential to understand how bankruptcy may impact your specific tax situation and to explore the available options for managing tax debt.

Important points to remember:

  • Consulting a bankruptcy attorney and a tax professional is crucial before making any decisions. They can assess your specific situation and advise you on the best course of action.
  • Bankruptcy shouldn’t be seen as a way to avoid paying your taxes. It should only be considered as a last resort after exploring other options like payment plans or negotiating with the IRS.
  • Filing for bankruptcy has long-term implications, including a negative impact on your credit score and potential difficulties obtaining credit in the future.

Here are some additional resources that you might find helpful:

blank
Written by Canterbury Law Group

Filing for Bankruptcy a Second Time

Filing for bankruptcy a second time, often referred to as a repeat or multiple bankruptcy filing, is possible under certain circumstances, but it comes with additional challenges and considerations compared to a first-time filing. Here’s what you need to know:

Chapter 7 Bankruptcy

Waiting Period:

  • Eight-Year Rule: If you previously filed for Chapter 7 bankruptcy and received a discharge, you must wait eight years from the date of the first filing before you can file for Chapter 7 bankruptcy again and receive another discharge.
  • Chapter 13 to Chapter 7: If you filed for Chapter 13 bankruptcy and want to switch to Chapter 7, you typically must wait six years from the date of filing for Chapter 13.

Consequences:

  • Impact on Discharge: If you file for Chapter 7 bankruptcy before the eight-year waiting period elapses, you won’t receive a discharge of your debts. Instead, your case may be dismissed, and creditors can resume collection efforts.
  • Complexity of Case: The court may scrutinize your second bankruptcy filing more closely, particularly if it’s filed shortly after the first one. You may need to demonstrate a significant change in circumstances to justify the need for another bankruptcy.

Chapter 13 Bankruptcy

Waiting Period:

  • Two-Year Rule: If you previously received a discharge in a Chapter 13 bankruptcy, you must wait two years from the date of the first filing to receive another discharge in Chapter 13.
  • Four-Year Rule: If you previously received a discharge in a Chapter 7 bankruptcy, you must wait four years from the date of the Chapter 7 discharge before filing for Chapter 13 bankruptcy and receiving another discharge.

Consequences:

  • Modification of Repayment Plan: If you filed for Chapter 13 bankruptcy before and are seeking another discharge, the court may scrutinize your repayment plan to ensure that creditors are receiving a fair distribution of payments.
  • Increased Oversight: The court may closely monitor your compliance with the repayment plan, particularly if you’ve filed for Chapter 13 bankruptcy multiple times.

Considerations for Multiple Bankruptcy Filings

  1. Financial Management: Before considering a second bankruptcy filing, explore other options for managing your debts, such as debt consolidation, negotiation with creditors, or credit counseling.
  2. Legal Advice: Consult with a qualified bankruptcy attorney to assess your financial situation and explore the best course of action. They can provide guidance on whether bankruptcy is the most suitable option and help you navigate the process.
  3. Long-Term Financial Planning: Consider the long-term impact of a repeat bankruptcy filing on your credit score, financial stability, and ability to obtain credit in the future.
  4. Addressing Underlying Issues: Evaluate the reasons for your financial difficulties and take steps to address any underlying issues, such as overspending, job loss, or medical expenses, to prevent future financial crises.

While it’s possible to file for bankruptcy multiple times, doing so comes with additional challenges and consequences compared to a first-time filing. Before pursuing another bankruptcy, explore alternative solutions and seek professional advice to make an informed decision based on your individual circumstances and long-term financial goals.

blank
Written by Canterbury Law Group

Pros and Cons of Chapter 13 Bankruptcy

Chapter 13 bankruptcy offers individuals an opportunity to restructure their debts and create a manageable repayment plan, allowing them to retain their assets while gradually paying off creditors. Like any financial decision, Chapter 13 bankruptcy has its advantages and disadvantages. Let’s explore the pros and cons:

Pros of Chapter 13 Bankruptcy

  1. Debt Repayment Plan:
    • Structured Plan: Chapter 13 allows individuals to create a structured repayment plan to pay off their debts over a period of three to five years.
    • Retain Assets: Unlike Chapter 7 bankruptcy, Chapter 13 allows individuals to keep their assets while repaying creditors, including homes and vehicles.
  2. Protection from Creditors:
    • Automatic Stay: Filing for Chapter 13 triggers an automatic stay, halting all collection actions, including foreclosure, repossession, wage garnishment, and creditor harassment.
    • Debt Discharge: Upon successful completion of the repayment plan, remaining qualifying debts may be discharged, providing a fresh start.
  3. Flexible Payment Terms:
    • Tailored Repayment Plan: The repayment plan is based on the individual’s income, expenses, and debt obligations, making it more manageable.
    • Potential Reduction of Debt: Some unsecured debts may be reduced or paid off for less than the full amount owed, depending on the individual’s income and assets.
  4. Credit Score Recovery:
    • Shorter Impact: While Chapter 13 bankruptcy remains on your credit report for seven years, its impact on credit scores is generally less severe and shorter-lived compared to Chapter 7 bankruptcy.
    • Opportunity to Rebuild Credit: Making consistent, on-time payments towards the repayment plan can demonstrate responsible financial behavior and contribute to credit score improvement over time.
  5. Protection for Co-Signers:
    • Co-Signer Protection: Co-signers on loans are protected from collection actions while the debtor is under the protection of the bankruptcy court.

Cons of Chapter 13 Bankruptcy

  1. Longer Repayment Period:
    • Extended Timeline: Chapter 13 bankruptcy requires a commitment to a repayment plan for three to five years, which may feel burdensome for some individuals.
  2. Strict Eligibility Requirements:
    • Debt Limits: There are debt limits for filing Chapter 13 bankruptcy. If your debt exceeds the specified limits, you may not qualify for Chapter 13 and may need to consider alternatives.
    • Stable Income Requirement: Individuals must have a stable income to support the repayment plan. Unstable income or inability to meet plan payments may result in dismissal of the case.
  3. Impact on Credit Score:
    • Remains on Credit Report: Chapter 13 bankruptcy remains on your credit report for seven years, which can affect your ability to obtain credit or loans during that time.
    • Credit Restrictions: Some creditors may be hesitant to extend credit to individuals with a Chapter 13 bankruptcy on their record, and if they do, it may come with higher interest rates.
  4. Potential Loss of Discharge:
    • Failure to Complete Plan: If you fail to adhere to the terms of the repayment plan, your case may be dismissed, and you may not receive a discharge of your debts.
  5. Limited Debt Discharge:
    • Non-Dischargeable Debts: Some debts, such as certain tax obligations, student loans, and child support payments, are typically not dischargeable in Chapter 13 bankruptcy.
  6. Court Oversight:
    • Ongoing Oversight: The bankruptcy court supervises the repayment plan, requiring regular payments and compliance with court orders, which may feel intrusive to some individuals.

Chapter 13 bankruptcy can be a valuable tool for individuals struggling with debt, providing a structured framework for debt repayment while protecting assets from creditors. However, it’s essential to weigh the pros and cons carefully and consider alternatives before proceeding with Chapter 13 bankruptcy. Consulting with a qualified bankruptcy attorney can provide personalized guidance based on your financial situation and goals.

blank
Written by Canterbury Law Group

Bankruptcy vs Foreclosure: Which is Worse for My Credit Score?

blank

Both bankruptcy and foreclosure have significant negative impacts on your credit score, but they affect your credit and financial future in different ways. Understanding the implications of each can help you make a more informed decision if you’re facing these financial challenges.

Bankruptcy

Impact on Credit Score

  • Severity: Bankruptcy can cause your credit score to drop by 130 to 240 points, depending on your initial credit score. The higher your score before filing, the more significant the drop.
  • Duration on Credit Report:
    • Chapter 7 Bankruptcy: Remains on your credit report for up to 10 years.
    • Chapter 13 Bankruptcy: Remains on your credit report for up to 7 years.
  • Rebuilding Credit: While bankruptcy stays on your credit report for a long time, you can start rebuilding your credit relatively soon after the discharge. Secured credit cards, small loans, and timely payments can help improve your score over time.

Financial and Legal Consequences

  • Debt Discharge: Bankruptcy can discharge many types of unsecured debt, providing a fresh start.
  • Asset Liquidation (Chapter 7): Non-exempt assets may be sold to pay creditors.
  • Repayment Plan (Chapter 13): Requires a repayment plan for 3-5 years but allows you to keep your assets.
  • Public Record: Bankruptcy filings are public records.

Foreclosure

Impact on Credit Score

  • Severity: Foreclosure can cause your credit score to drop by 85 to 160 points. Like bankruptcy, the higher your score before foreclosure, the more significant the drop.
  • Duration on Credit Report: Foreclosure remains on your credit report for up to 7 years.
  • Rebuilding Credit: Rebuilding credit after foreclosure can be challenging, especially if the foreclosure is accompanied by other late payments or defaults. However, similar to bankruptcy, consistent, responsible credit behavior can help improve your score over time.

Financial and Legal Consequences

  • Loss of Property: Foreclosure results in the loss of your home.
  • Deficiency Judgment: In some states, if the foreclosure sale does not cover the full mortgage balance, the lender may pursue a deficiency judgment for the remaining amount.
  • Public Record: Foreclosures are also public records.

Comparison and Considerations

Impact on Future Borrowing

  • Bankruptcy: Lenders may be wary of offering credit to someone with a bankruptcy on their record, but you may start receiving credit offers sooner than expected, often within a year or two post-discharge.
  • Foreclosure: A foreclosure can make it challenging to secure another mortgage for several years. Lenders typically impose a waiting period before considering another home loan application (usually about 3 to 7 years, depending on the loan type and circumstances).

Overall Financial Impact

  • Bankruptcy: Can offer a comprehensive solution by addressing various debts, potentially including mortgages if you file for Chapter 13. It allows for a fresh start but at the cost of a significant and prolonged impact on your credit score.
  • Foreclosure: Specifically addresses the mortgage debt but leaves other debts intact. It has a severe impact on your credit score and involves losing your home, but it doesn’t necessarily address the broader scope of your financial issues.

Determining whether bankruptcy or foreclosure is worse for your credit score depends on your specific financial situation and goals:

  • Bankruptcy might be a better option if you have overwhelming debt beyond your mortgage and need a comprehensive solution to reset your financial situation.
  • Foreclosure might be the route you take if your primary issue is with your mortgage and you want to avoid the more extensive credit implications of bankruptcy.

Both options will significantly affect your credit score and future financial opportunities. Consulting with a financial advisor or bankruptcy attorney can provide personalized advice based on your circumstances.

Financial Consequences:

  1. Credit Score Impact:
    • Filing for bankruptcy will likely have a severe negative impact on your credit score. A bankruptcy record can remain on your credit report for several years, making it challenging to obtain credit or loans.
  2. Difficulty Obtaining Credit:
    • After bankruptcy, obtaining new credit, such as credit cards or loans, may be more difficult, and if approved, interest rates may be higher.
  3. Limited Access to Financial Products:
    • Bankruptcy can limit access to certain financial products and services. For example, you may find it challenging to qualify for a mortgage or an auto loan with favorable terms.
  4. Asset Liquidation:
    • In Chapter 7 bankruptcy, some of your assets may be sold to pay off creditors. Certain assets, however, may be exempt from liquidation.
  5. Repayment Plans (Chapter 13):
    • In Chapter 13 bankruptcy, you may be required to follow a court-approved repayment plan to pay off your debts over a specified period, usually three to five years.
  6. Impact on Co-Signers:
    • If someone co-signed a loan with you, they may become responsible for the debt if you file for bankruptcy.

Non-Financial Consequences:

  1. Public Record:
    • Bankruptcy is a public record, and your filing will be accessible to creditors, employers, and the general public.
  2. Employment Impact:
    • While federal law prohibits discrimination based solely on bankruptcy status, some employers may consider it during the hiring process. Positions involving financial responsibilities may be particularly affected.
  3. Housing and Utilities:
    • Some landlords and utility companies may inquire about your bankruptcy history, potentially affecting your ability to secure housing or utility services.
  4. Impact on Personal Relationships:
    • The stress and strain of financial difficulties and bankruptcy can impact personal relationships, including those with family and friends.
  5. Loss of Non-Exempt Property:
    • In Chapter 7 bankruptcy, non-exempt property may be sold to pay off creditors. Exemptions vary by state and protect certain types and amounts of property.

It’s important to note that the specific consequences can vary based on the type of bankruptcy filed (Chapter 7 or Chapter 13), individual circumstances, and applicable state laws. Additionally, while bankruptcy has significant consequences, it also provides individuals and businesses with an opportunity for a fresh financial start.

Before deciding to file for bankruptcy, it’s crucial to consult with a qualified bankruptcy attorney who can assess your situation, explain the potential consequences, and guide you through the process.

What Is the Process of Filing for Emergency Bankruptcy?

A bankruptcy case filed with only a portion of the necessary forms is known as an emergency bankruptcy filing. An emergency filing may also be referred to as an incomplete filing, a skeleton bankruptcy, or a barebones filing, depending on where you live. The minimal information needed to invoke the automatic stay protection is included in an emergency bankruptcy petition as required by the Bankruptcy Code.

Even in urgent situations, the automatic stay begins to operate as soon as your bankruptcy case is filed. All of your creditors are required by the automatic stay to cease pursuing collection actions against you. The automatic stay can start working even before you’ve finished filing for bankruptcy thanks to an emergency petition.

While it is possible to file for bankruptcy in an emergency situation before finishing all the necessary paperwork, doing so does not release you from filing for bankruptcy in an ordinary manner. As required by law, you have 14 days from the date of your emergency filing to file the remaining forms. If not, your case will be dropped, allowing your creditors to start pursuing collection.

Why Do Individuals File for Bankruptcy in an Emergency?

Most people file for emergency bankruptcy in order to stop a collection action that could soon be initiated. Before choosing to file for bankruptcy, many people do some research and consider their options. It may take some time to gather all the required paperwork and complete all the forms, even after you’ve made the decision to file.

The automatic stay has the power to halt additional collection attempts, but it cannot reverse already completed actions. For this reason, it’s imperative that the automatic stay be in place before there is a wage garnishment, bank levy, repossession, or foreclosure. In the event that you are unable to complete all of your paperwork prior to a significant collection event, you can file for emergency bankruptcy, which will protect you from creditors until you have completed your forms.

What is Required for an Urgent Case?

Only a small portion of the documentation needed to complete your bankruptcy filing will be needed for an emergency bankruptcy filing. You still need to fulfill a few minimal requirements in order to file for an emergency.

Select the Appropriate Type of Bankruptcy

Most people file for bankruptcy using either the Bankruptcy Code’s Chapter 7 or Chapter 13. These two types of bankruptcy were intended for different purposes and operate very differently. Chapter 7 is mainly used by debtors to get rid of unsecured debt, like credit card and medical bills. You have to make your payments on time in order to maintain your vehicle or home in Chapter 7.

Repossessions and foreclosures are frequently stopped through emergency bankruptcy filings. Chapter 13 bankruptcy typically makes more sense in these circumstances. The Chapter 13 repayment plan is often used by debtors who are behind on their rent, mortgage, or auto payments in order to catch up on these payments.

The type of bankruptcy you’re filing must be specified when filing an emergency case. Switching to a different chapter isn’t always simple if you select the incorrect kind of case. Try to arrange a meeting with a knowledgeable bankruptcy attorney if you’re unsure which chapter to file under. When you arrange the consultation, make sure to mention that you’re in an emergency.

Verify Your Eligibility

Not everyone is qualified to file for bankruptcy under Chapter 7. To find out if you are eligible for Chapter 7 relief, you will need to pass a means test. Although completing the means test calculations prior to filing is not necessary in the event of an emergency, it is a good idea in case there is a problem with your eligibility for Chapter 7.

You should also see if you are eligible for a bankruptcy discharge if you have previously filed for bankruptcy. There are waiting periods between a previous bankruptcy discharge and a new discharge mandated by the Bankruptcy Code. Depending on the chapter you filed under previously and the chapter you are filing under now, these wait times vary. The wait periods only come into play if your prior case resulted in a discharge. A Chapter 13 plan can be used to make up missed payments even if you are not eligible for a discharge because of an earlier case.

If you have previously filed for bankruptcy, there are additional restrictions that might be applicable to the automatic stay. The automatic stay usually lasts from the time a bankruptcy case is filed until it is dismissed or discharged. The automatic stay in your new case will only last 30 days if you filed for bankruptcy within the last year and that bankruptcy was dismissed (not discharged). If you want to prolong the automatic stay past 30 days, you can file a motion. Usually, you have to file the motion along with your emergency documents.

When you file for bankruptcy, the automatic stay won’t apply if you’ve filed for bankruptcy twice or more in the previous year. To enforce the stay, you can file a motion, but you’ll need to wait for a hearing and a ruling. You will not be shielded from ongoing collection actions by filing for emergency bankruptcy if there is no automatic stay in place.

Enroll in a Credit Counseling Program

Prior to filing for bankruptcy, all applicants must finish a credit counseling program from an authorized provider. This covers last-minute bankruptcy petitions. Most suppliers provide the course over the phone, online, or both. The cost ranges from $10 to $45, depending on the provider. The course is offered once, with sessions lasting typically less than two hours. A certificate will be emailed to you by the provider once the course is finished. When submitting your emergency forms to the court, you also need to submit this certificate.

Fill out the Forms That Are NECESSARY.

In order to file for emergency bankruptcy, you need to at least fill out and submit the following forms:

Form 101, Voluntary Petition: This eight-page form asks for basic details about your name, address, type of bankruptcy, and history of bankruptcies, if any.

Social Security Number Declaration (Form 121): You will only use your complete Social Security number here in your documentation. It is hidden from creditors, attorneys, and even your trustee; only the court can view it.

An alphabetical list of all your creditors along with their mailing addresses can be found in the creditor matrix. The matrix must be submitted in a specific format to the majority of bankruptcy courts. In certain courts, the list of creditors must be submitted with a verification form. To be sure of the requirements, check with the court where your case will be filed.

Obtain Your Filing Cost

For Chapter 7 cases, the bankruptcy court charges a filing fee of $338, and for Chapter 13 cases, it charges $313. When you file your case, the fee is due. You can file a motion requesting the court to allow you to pay the filing fee in installments if you are unable to pay the entire amount. When you file your emergency case, most courts require you to pay a minimum first installment. For confirmation, check with your court.

You may petition the court to have your filing fee waived if your income is less than 150% of the federal poverty guidelines. When filing your emergency paperwork, you must also file your motion for installments or a fee waiver if you are not paying the full fee.

Put In The Case

New cases can only be filed online by bankruptcy attorneys. Since mailing your forms can cause a delay, it is best to file your paperwork in person in an emergency. To locate your bankruptcy court, use the federal court locater. Certain bankruptcy districts have restrictions on where you can file depending on the county in which you reside. To verify the residence rules and office hours, visit the website of your court. Finding out if your court has any additional requirements—such as bringing specific forms of identification or extra copies of your forms—also helps. Call the court clerk if you’re unsure.

I’ve filed for bankruptcy in an emergency. What Now?

Although filing for emergency bankruptcy will provide you with some immediate relief, your work is not over. Notifying the creditor who prompted you to file the emergency case is necessary. Additionally, you must finish and submit the last of your bankruptcy forms.

Let Your Creditor Know

Notification of your emergency filing will be mailed to each creditor in your creditor matrix by the bankruptcy court. However, it may take a few days or more for this notice to reach creditors. You should give the creditor a call directly in order to successfully halt a garnishment, lawsuit, foreclosure, repossession, or other collection action. Make contact with the creditor’s lawyer if you are familiar with them rather than contacting the creditor directly. Typically, you’ll need to provide them with your bankruptcy case number, the court you filed with, and the filing date. In case there is an issue, jot down the time and person you spoke with when you called.

Fill out the remaining bankruptcy forms and file them.

You have just 14 days from the time you file your emergency documents to the time you file the remaining bankruptcy forms. Remember, fourteen days can pass quickly, so don’t wait. The remaining forms, along with instructions, can be accessed online, just like the emergency forms. For every state, Upsolve also offers a free filing guide.

The bankruptcy court will send you a deficiency notice a few days after you file your emergency case. This does not imply that the material you have already filed is flawed. It simply indicates that you haven’t yet submitted all necessary forms. A list of the forms you still need to file and the due date for doing so will be included with your deficiency notice. To ensure that the remaining forms are received by the deadline, submit them in person.

The court has the right to dismiss your case if you fail to file the last of the bankruptcy forms by the deadline. The automatic stay is lifted upon a dismissal, allowing your creditors to resume collection efforts. You can file a motion requesting an extension from the court if you require more time to file the remaining forms. Don’t ask for more time unless you absolutely need it, as courts are frequently hesitant to grant these extensions.

Following the submission of all necessary paperwork, your case will be handled similarly to other bankruptcy cases. The date, time, and location of your creditors’ meeting, along with your trustee’s contact details, ought to be included in a notification you receive. About 30 to 45 days typically pass after the date of filing. It’s likely that you’ll receive a request for documents from your trustee, which you must submit at least seven days prior to the meeting.

What Drawbacks Come With Emergency Bankruptcy Filing?
The fact that you have so little time to prepare your bankruptcy forms is the largest disadvantage of filing an emergency case. The shapes are intricate. Documents like bank statements, tax returns, and pay stubs must be gathered. Another disadvantage is that you might run into unforeseen problems with your case when filling out your other forms, like property that isn’t exempt from fees. You don’t have much time to solve problems once you encounter them.

Furthermore, even though filing for emergency bankruptcy gives you some relief, in some cases it’s only a short-term fix. For example, in Chapter 7, you have to immediately bring the payments current if you want to keep your house or vehicle. You have an extended period in Chapter 13 to make up missed payments. Regardless of the chapter you file under, you only have 30 days to bring your payments current if you filed for bankruptcy to prevent an eviction.You only submit the bare minimum of paperwork to the bankruptcy court when filing for bankruptcy emergency. When you need to halt an impending threat of collection, like a wage garnishment, foreclosure, or repossession, emergency filings can be useful. In these circumstances, you might have to file for bankruptcy quickly because you won’t have enough time to finish all the paperwork. You are protected from creditors by the automatic stay, which is activated by the emergency filing. However, you only have 14 days from the date of filing to finish all other documentation. This could be dangerous, particularly if problems arise with your case. Your case may be dismissed if the remaining forms are not submitted by the deadline.

Speak With Our Bankruptcy Lawyers In Phoenix & Scottsdale

Canterbury Law Group should be your first choice for any bankruptcy evaluation. Our experienced professionals will work with you to obtain the best possible outcome. You can on the firm to represent you well so you can move on with your life. Call today for an initial consultation. We can assist with all types of bankruptcies including Business BankruptcyChapter 7 BankruptcyCreditor Representation, Chapter 5 ClaimsChapter 13 Bankruptcy, Business RestructuringChapter 11 Bankruptcy, and more.

*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.

blank
Written by Canterbury Law Group

Finding a Bankruptcy Alternative

blank

Finding alternatives to bankruptcy can be crucial for managing debt without the severe consequences of a bankruptcy filing. Here are several alternatives that might help and then we will go on and explain bankruptcy options. Read on to learn more.

Finding alternatives to bankruptcy can be crucial for managing debt without the severe consequences of a bankruptcy filing. Here are several alternatives that might help:

1. Debt Settlement

  • Negotiation with Creditors: You can negotiate with creditors to reduce the total amount of debt owed. Creditors may agree to a lump-sum payment that is less than the full amount if they believe it’s the best way to recover some of their money.
  • Debt Settlement Companies: There are companies that specialize in negotiating settlements with creditors on behalf of the debtor. Be cautious, as these companies often charge significant fees and not all of them are reputable.

2. Debt Management Plan (DMP)

  • Credit Counseling Agencies: These agencies can help you create a DMP, which involves consolidating your debt into a single monthly payment. The agency negotiates with your creditors to lower interest rates and waive fees.
  • Monthly Payments: You make monthly payments to the credit counseling agency, which then distributes the funds to your creditors. This can simplify payments and potentially reduce overall costs.

3. Debt Consolidation Loan

  • Single Loan to Pay Off Debts: You take out a loan to pay off multiple debts, consolidating them into a single monthly payment. This loan often comes with a lower interest rate, which can make it easier to manage.
  • Types of Loans: Options include personal loans, home equity loans, or balance transfer credit cards with low or zero interest rates for an introductory period.

4. Personal Budgeting and Financial Planning

  • Budget Review: Thoroughly review your budget to identify areas where you can cut expenses. This can free up more money to pay down your debt.
  • Financial Planning: Develop a plan to address your debts systematically, focusing on paying off high-interest debts first (the avalanche method) or small debts first (the snowball method).

5. Negotiating Directly with Creditors

  • Payment Plans: Contact your creditors directly to see if they will agree to a payment plan that allows you to pay off your debt over time.
  • Interest Rate Reduction: Request a reduction in interest rates or a waiver of late fees to make your debt more manageable.

6. Seek Help from Non-Profit Organizations

  • Non-Profit Credit Counseling: Non-profit organizations offer free or low-cost credit counseling services to help you manage your debt. They can assist with budgeting, debt management plans, and financial education.

7. Balance Transfer Credit Cards

  • 0% Interest Promotions: Some credit cards offer 0% interest on balance transfers for a limited period. Transferring high-interest debt to these cards can reduce the amount of interest you pay and help you pay off the debt faster.
  • Transfer Fees: Be aware of any transfer fees that might apply, which can offset the benefits of the lower interest rate.

8. Increase Income

  • Additional Income Sources: Consider taking on a part-time job, freelancing, or selling unused items to increase your income and accelerate debt repayment.
  • Career Development: Invest in skills or education that can lead to higher-paying job opportunities.

9. Legal Protections and Rights

  • Fair Debt Collection Practices Act (FDCPA): Understand your rights under the FDCPA, which protects you from abusive or unfair practices by debt collectors.
  • State-Specific Protections: Some states offer additional protections and assistance programs for debtors.

While bankruptcy can provide a fresh start, it has significant long-term consequences. Exploring alternatives such as debt settlement, debt management plans, debt consolidation loans, and direct negotiation with creditors can help you manage and reduce your debt more effectively without the drawbacks of bankruptcy. It’s often beneficial to consult with a financial advisor or credit counselor to assess your specific situation and identify the best course of action.

 

A Chapter 7 bankruptcy filing can eliminate the majority of your debts in three to six months. You might, however, lose some of your personal belongings.
Repayment plans for Chapter 13 bankruptcy must be determined by your income. The court will discharge some of your debts when you have paid off as much of them as you can over the course of the next three to five years.
Filing for bankruptcy requires commitment and time. As you work toward a clean slate, both solutions will have an impact on your credit report, future interest rates, and way of life.

Before making a choice, give your circumstance a lot of thought. The best person to assess your financial status and give you advice on your options is an attorney.

Before determining which chapter is best for you and whether to file for bankruptcy, take into consideration the following points.

Are You Able to File for Bankruptcy?

To file for any kind of bankruptcy, you have to fulfill certain requirements.

For instance, if your salary is too high, you might not be allowed to apply for Chapter 7 bankruptcy. You have to pass the so-called “Chapter 7 means test.” Alternatively, you might not be able to finish a Chapter 13 repayment plan if your income is too low or your debts are too high.

Numerous bankruptcy attorneys provide free consultations during which they can explain your alternatives and assist you in deciding if you are eligible for bankruptcy.

What Debts Cannot Be Forgiven?

bills that cannot be discharged in a bankruptcy procedure include tax bills, school loans, child support, and alimony. You will have to repay this whether you file under Chapter 7 or Chapter 13. Examine whether the majority of your debt is in one of these categories.

An “automatic stay” will prevent creditors from harassing you on qualified debts during the bankruptcy process.

What Happens to My House in the Event That I File for Bankruptcy?

Making mortgage payments could be simpler if some debts are forgiven. However, if you declare bankruptcy under Chapter 7, you can lose your house. While you look for debt relief, you could face foreclosure or property seizure. It’s not a given that most people who file for bankruptcy can keep their homes. However, it might be worthwhile for you to discuss this with a lawyer.

On the other side, you could be able to file for Chapter 13 bankruptcy if your income is sufficient. This enables you to add mortgage payments to your repayment schedule.

Is My Car and Other Property Mine to Keep?

Other property during a bankruptcy proceeding will be subject to the following:

The way you handled it
The rules that exempt properties that you can use
A loan becomes secured, for instance, if you pledge your boat as security. Even in bankruptcy, the creditor may still be entitled to seize your belongings.

Furthermore, exemption regulations in Chapter 7 bankruptcies only cover specific categories of property. State exemptions allow many people to keep their cars, but your ability to keep yours will depend on how much debt and equity you have.

Will All of My Credit Card Debts Be Forgiven?

Before filing, you should find out if a bankruptcy process will eliminate your credit card debt. Your credit card debt may not be discharged in bankruptcy if you spend excessively or misled on your credit card application.

The best route to credit card debt clearance is through Chapter 7. In Chapter 13, you will be required to pay back the majority of the loan.

Are My Paychecks and Pension Plans Safe?

The majority of life insurance policies and pension schemes are shielded against bankruptcy by state rules. Ask if your life insurance plans, 401(k) plan, and/or IRA will remain protected before declaring bankruptcy.

Lenders may be able to garnish your wages in certain circumstances. In your bankruptcy case, this may not be possible, but a bankruptcy attorney can fight to preserve your authority over your paychecks.

Will My Debt Get in the Way of My Co-Signers?

Reviewing any co-signers in all of your loan arrangements is a good idea.

It is not desirable to leave a co-signer behind on any of your loans when it comes to paying off your debt. Any co-signers will often be shielded from your debts under Chapter 13 bankruptcy, but not under Chapter 7.

Will They Get a Look at My Personal Life?

You will have to present the bankruptcy court with all of your financial information in order for bankruptcy to be approved. Furthermore, it’s possible for others to learn of your bankruptcy.

A portion of your personal belongings may be seized and sold to satisfy your debts in a Chapter 7 bankruptcy. For the next three to five years following Chapter 13 bankruptcy, you will most likely need to request authorization before using your own funds.

What About My Company?: Business Owners’ Consumer Bankruptcy

It’s not easy to acknowledge that your company is having financial difficulties. Make sure you have access to the most recent financial accounts for your business, which include predictions, balance sheets, profit and loss statements, and other crucial data.

Inform your creditors of your difficulties. Like any other company, your creditors depend on their clients and want to see them flourish. Your creditors will be more accommodating if you are truthful with them.

Examining Your Case for Bankruptcy

You should budget a significant amount of time and effort to assist your bankruptcy attorney with documentation. Along with representing your business throughout the case, you will need to assist with finishing your company’s petition and scheduling.

Organize your documents and books before speaking with a lawyer. Being organized and handling a large portion of the “leg work” yourself will significantly reduce your legal expenses.

Bankruptcy as opposed to Business Closure

It’s a good idea to have a rough notion of what you hope a bankruptcy will bring about for your business. It is important to have reasonable expectations about bankruptcy and its potential benefits for your business.

Reorganizing your bankruptcy won’t help if there is no market for your product. You cannot expect bankruptcy to solve all of your company’s financial issues, nor can it make your business lucrative.

Integrity and Resources in Bankruptcy Proceedings

Take care to ensure that you include every creditor on your bankruptcy schedules. Whether on purpose or not, filing for bankruptcy will not result in the discharge of the obligation owed to that unforeseen creditor.

Make sure you don’t give assets to friends or family in order to conceal them from creditors or the bankruptcy court. During the initial creditors’ meeting, the trustee will question you regarding these transfers. They are able to get those things back.

Don’t ever attempt to con the bankruptcy court. You are under oath at the first creditors’ meeting and you sign your bankruptcy schedules under penalty of perjury.

The court will dismiss your case if it finds that you:

neglected to list a real estate
lied or deceived about your schedules; withheld important information; or lied during testimony
If the courts find that you are dishonest, you may also face charges of bankruptcy fraud.

Financial Consequences:

  1. Credit Score Impact:
    • Filing for bankruptcy will likely have a severe negative impact on your credit score. A bankruptcy record can remain on your credit report for several years, making it challenging to obtain credit or loans.
  2. Difficulty Obtaining Credit:
    • After bankruptcy, obtaining new credit, such as credit cards or loans, may be more difficult, and if approved, interest rates may be higher.
  3. Limited Access to Financial Products:
    • Bankruptcy can limit access to certain financial products and services. For example, you may find it challenging to qualify for a mortgage or an auto loan with favorable terms.
  4. Asset Liquidation:
    • In Chapter 7 bankruptcy, some of your assets may be sold to pay off creditors. Certain assets, however, may be exempt from liquidation.
  5. Repayment Plans (Chapter 13):
    • In Chapter 13 bankruptcy, you may be required to follow a court-approved repayment plan to pay off your debts over a specified period, usually three to five years.
  6. Impact on Co-Signers:
    • If someone co-signed a loan with you, they may become responsible for the debt if you file for bankruptcy.

Non-Financial Consequences:

  1. Public Record:
    • Bankruptcy is a public record, and your filing will be accessible to creditors, employers, and the general public.
  2. Employment Impact:
    • While federal law prohibits discrimination based solely on bankruptcy status, some employers may consider it during the hiring process. Positions involving financial responsibilities may be particularly affected.
  3. Housing and Utilities:
    • Some landlords and utility companies may inquire about your bankruptcy history, potentially affecting your ability to secure housing or utility services.
  4. Impact on Personal Relationships:
    • The stress and strain of financial difficulties and bankruptcy can impact personal relationships, including those with family and friends.
  5. Loss of Non-Exempt Property:
    • In Chapter 7 bankruptcy, non-exempt property may be sold to pay off creditors. Exemptions vary by state and protect certain types and amounts of property.

It’s important to note that the specific consequences can vary based on the type of bankruptcy filed (Chapter 7 or Chapter 13), individual circumstances, and applicable state laws. Additionally, while bankruptcy has significant consequences, it also provides individuals and businesses with an opportunity for a fresh financial start.

Before deciding to file for bankruptcy, it’s crucial to consult with a qualified bankruptcy attorney who can assess your situation, explain the potential consequences, and guide you through the process.

What Is the Process of Filing for Emergency Bankruptcy?

A bankruptcy case filed with only a portion of the necessary forms is known as an emergency bankruptcy filing. An emergency filing may also be referred to as an incomplete filing, a skeleton bankruptcy, or a barebones filing, depending on where you live. The minimal information needed to invoke the automatic stay protection is included in an emergency bankruptcy petition as required by the Bankruptcy Code.

Even in urgent situations, the automatic stay begins to operate as soon as your bankruptcy case is filed. All of your creditors are required by the automatic stay to cease pursuing collection actions against you. The automatic stay can start working even before you’ve finished filing for bankruptcy thanks to an emergency petition.

While it is possible to file for bankruptcy in an emergency situation before finishing all the necessary paperwork, doing so does not release you from filing for bankruptcy in an ordinary manner. As required by law, you have 14 days from the date of your emergency filing to file the remaining forms. If not, your case will be dropped, allowing your creditors to start pursuing collection.

Why Do Individuals File for Bankruptcy in an Emergency?

Most people file for emergency bankruptcy in order to stop a collection action that could soon be initiated. Before choosing to file for bankruptcy, many people do some research and consider their options. It may take some time to gather all the required paperwork and complete all the forms, even after you’ve made the decision to file.

The automatic stay has the power to halt additional collection attempts, but it cannot reverse already completed actions. For this reason, it’s imperative that the automatic stay be in place before there is a wage garnishment, bank levy, repossession, or foreclosure. In the event that you are unable to complete all of your paperwork prior to a significant collection event, you can file for emergency bankruptcy, which will protect you from creditors until you have completed your forms.

What is Required for an Urgent Case?

Only a small portion of the documentation needed to complete your bankruptcy filing will be needed for an emergency bankruptcy filing. You still need to fulfill a few minimal requirements in order to file for an emergency.

Select the Appropriate Type of Bankruptcy

Most people file for bankruptcy using either the Bankruptcy Code’s Chapter 7 or Chapter 13. These two types of bankruptcy were intended for different purposes and operate very differently. Chapter 7 is mainly used by debtors to get rid of unsecured debt, like credit card and medical bills. You have to make your payments on time in order to maintain your vehicle or home in Chapter 7.

Repossessions and foreclosures are frequently stopped through emergency bankruptcy filings. Chapter 13 bankruptcy typically makes more sense in these circumstances. The Chapter 13 repayment plan is often used by debtors who are behind on their rent, mortgage, or auto payments in order to catch up on these payments.

The type of bankruptcy you’re filing must be specified when filing an emergency case. Switching to a different chapter isn’t always simple if you select the incorrect kind of case. Try to arrange a meeting with a knowledgeable bankruptcy attorney if you’re unsure which chapter to file under. When you arrange the consultation, make sure to mention that you’re in an emergency.

Verify Your Eligibility

Not everyone is qualified to file for bankruptcy under Chapter 7. To find out if you are eligible for Chapter 7 relief, you will need to pass a means test. Although completing the means test calculations prior to filing is not necessary in the event of an emergency, it is a good idea in case there is a problem with your eligibility for Chapter 7.

You should also see if you are eligible for a bankruptcy discharge if you have previously filed for bankruptcy. There are waiting periods between a previous bankruptcy discharge and a new discharge mandated by the Bankruptcy Code. Depending on the chapter you filed under previously and the chapter you are filing under now, these wait times vary. The wait periods only come into play if your prior case resulted in a discharge. A Chapter 13 plan can be used to make up missed payments even if you are not eligible for a discharge because of an earlier case.

If you have previously filed for bankruptcy, there are additional restrictions that might be applicable to the automatic stay. The automatic stay usually lasts from the time a bankruptcy case is filed until it is dismissed or discharged. The automatic stay in your new case will only last 30 days if you filed for bankruptcy within the last year and that bankruptcy was dismissed (not discharged). If you want to prolong the automatic stay past 30 days, you can file a motion. Usually, you have to file the motion along with your emergency documents.

When you file for bankruptcy, the automatic stay won’t apply if you’ve filed for bankruptcy twice or more in the previous year. To enforce the stay, you can file a motion, but you’ll need to wait for a hearing and a ruling. You will not be shielded from ongoing collection actions by filing for emergency bankruptcy if there is no automatic stay in place.

Enroll in a Credit Counseling Program

Prior to filing for bankruptcy, all applicants must finish a credit counseling program from an authorized provider. This covers last-minute bankruptcy petitions. Most suppliers provide the course over the phone, online, or both. The cost ranges from $10 to $45, depending on the provider. The course is offered once, with sessions lasting typically less than two hours. A certificate will be emailed to you by the provider once the course is finished. When submitting your emergency forms to the court, you also need to submit this certificate.

Fill out the Forms That Are NECESSARY.

In order to file for emergency bankruptcy, you need to at least fill out and submit the following forms:

Form 101, Voluntary Petition: This eight-page form asks for basic details about your name, address, type of bankruptcy, and history of bankruptcies, if any.

Social Security Number Declaration (Form 121): You will only use your complete Social Security number here in your documentation. It is hidden from creditors, attorneys, and even your trustee; only the court can view it.

An alphabetical list of all your creditors along with their mailing addresses can be found in the creditor matrix. The matrix must be submitted in a specific format to the majority of bankruptcy courts. In certain courts, the list of creditors must be submitted with a verification form. To be sure of the requirements, check with the court where your case will be filed.

Obtain Your Filing Cost

For Chapter 7 cases, the bankruptcy court charges a filing fee of $338, and for Chapter 13 cases, it charges $313. When you file your case, the fee is due. You can file a motion requesting the court to allow you to pay the filing fee in installments if you are unable to pay the entire amount. When you file your emergency case, most courts require you to pay a minimum first installment. For confirmation, check with your court.

You may petition the court to have your filing fee waived if your income is less than 150% of the federal poverty guidelines. When filing your emergency paperwork, you must also file your motion for installments or a fee waiver if you are not paying the full fee.

Put In The Case

New cases can only be filed online by bankruptcy attorneys. Since mailing your forms can cause a delay, it is best to file your paperwork in person in an emergency. To locate your bankruptcy court, use the federal court locater. Certain bankruptcy districts have restrictions on where you can file depending on the county in which you reside. To verify the residence rules and office hours, visit the website of your court. Finding out if your court has any additional requirements—such as bringing specific forms of identification or extra copies of your forms—also helps. Call the court clerk if you’re unsure.

I’ve filed for bankruptcy in an emergency. What Now?

Although filing for emergency bankruptcy will provide you with some immediate relief, your work is not over. Notifying the creditor who prompted you to file the emergency case is necessary. Additionally, you must finish and submit the last of your bankruptcy forms.

Let Your Creditor Know

Notification of your emergency filing will be mailed to each creditor in your creditor matrix by the bankruptcy court. However, it may take a few days or more for this notice to reach creditors. You should give the creditor a call directly in order to successfully halt a garnishment, lawsuit, foreclosure, repossession, or other collection action. Make contact with the creditor’s lawyer if you are familiar with them rather than contacting the creditor directly. Typically, you’ll need to provide them with your bankruptcy case number, the court you filed with, and the filing date. In case there is an issue, jot down the time and person you spoke with when you called.

Fill out the remaining bankruptcy forms and file them.

You have just 14 days from the time you file your emergency documents to the time you file the remaining bankruptcy forms. Remember, fourteen days can pass quickly, so don’t wait. The remaining forms, along with instructions, can be accessed online, just like the emergency forms. For every state, Upsolve also offers a free filing guide.

The bankruptcy court will send you a deficiency notice a few days after you file your emergency case. This does not imply that the material you have already filed is flawed. It simply indicates that you haven’t yet submitted all necessary forms. A list of the forms you still need to file and the due date for doing so will be included with your deficiency notice. To ensure that the remaining forms are received by the deadline, submit them in person.

The court has the right to dismiss your case if you fail to file the last of the bankruptcy forms by the deadline. The automatic stay is lifted upon a dismissal, allowing your creditors to resume collection efforts. You can file a motion requesting an extension from the court if you require more time to file the remaining forms. Don’t ask for more time unless you absolutely need it, as courts are frequently hesitant to grant these extensions.

Following the submission of all necessary paperwork, your case will be handled similarly to other bankruptcy cases. The date, time, and location of your creditors’ meeting, along with your trustee’s contact details, ought to be included in a notification you receive. About 30 to 45 days typically pass after the date of filing. It’s likely that you’ll receive a request for documents from your trustee, which you must submit at least seven days prior to the meeting.

What Drawbacks Come With Emergency Bankruptcy Filing?
The fact that you have so little time to prepare your bankruptcy forms is the largest disadvantage of filing an emergency case. The shapes are intricate. Documents like bank statements, tax returns, and pay stubs must be gathered. Another disadvantage is that you might run into unforeseen problems with your case when filling out your other forms, like property that isn’t exempt from fees. You don’t have much time to solve problems once you encounter them.

Furthermore, even though filing for emergency bankruptcy gives you some relief, in some cases it’s only a short-term fix. For example, in Chapter 7, you have to immediately bring the payments current if you want to keep your house or vehicle. You have an extended period in Chapter 13 to make up missed payments. Regardless of the chapter you file under, you only have 30 days to bring your payments current if you filed for bankruptcy to prevent an eviction.You only submit the bare minimum of paperwork to the bankruptcy court when filing for bankruptcy emergency. When you need to halt an impending threat of collection, like a wage garnishment, foreclosure, or repossession, emergency filings can be useful. In these circumstances, you might have to file for bankruptcy quickly because you won’t have enough time to finish all the paperwork. You are protected from creditors by the automatic stay, which is activated by the emergency filing. However, you only have 14 days from the date of filing to finish all other documentation. This could be dangerous, particularly if problems arise with your case. Your case may be dismissed if the remaining forms are not submitted by the deadline.

Speak With Our Bankruptcy Lawyers In Phoenix & Scottsdale

Canterbury Law Group should be your first choice for any bankruptcy evaluation. Our experienced professionals will work with you to obtain the best possible outcome. You can on the firm to represent you well so you can move on with your life. Call today for an initial consultation. We can assist with all types of bankruptcies including Business BankruptcyChapter 7 BankruptcyCreditor Representation, Chapter 5 ClaimsChapter 13 Bankruptcy, Business RestructuringChapter 11 Bankruptcy, and more.

*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.

blank
Written by Canterbury Law Group

Can You Clear Medical Debt in Bankruptcy?

Can You Clear Medical Debt in Bankruptcy?

Yes, medical debt can be discharged in bankruptcy. Here’s a detailed overview of how this works:

Types of Bankruptcy

There are primarily two types of bankruptcy filings that individuals use to discharge debt: Chapter 7 and Chapter 13.

  1. Chapter 7 Bankruptcy:
    • Liquidation Bankruptcy: This type of bankruptcy involves the liquidation of a debtor’s non-exempt assets to pay off creditors. However, many personal assets are often exempt, allowing individuals to keep essential property.
    • Discharge of Debts: Most unsecured debts, including medical debt, are discharged under Chapter 7. This means that once the bankruptcy process is complete, the debtor is no longer legally obligated to pay these debts.
    • Eligibility: To qualify for Chapter 7, debtors must pass a means test, which assesses their income and expenses to determine if they have the means to repay a portion of their debts.
  2. Chapter 13 Bankruptcy:
    • Reorganization Bankruptcy: This type involves creating a repayment plan to pay off a portion of the debts over a period (typically three to five years). The remaining unpaid debt is discharged at the end of the repayment period.
    • Repayment Plan: Under Chapter 13, the debtor proposes a repayment plan to the court, detailing how they will pay off their debts. Medical debts are included in this plan and are treated as unsecured debts.
    • Eligibility: Chapter 13 is available to individuals with a regular income who can commit to a repayment plan.

Impact on Medical Debt

  • Dischargeable Debt: Medical debt is considered unsecured debt, similar to credit card debt, and is generally dischargeable in both Chapter 7 and Chapter 13 bankruptcy.
  • Collection Efforts: Filing for bankruptcy triggers an automatic stay, which halts all collection efforts, including those related to medical debt. Creditors cannot pursue collection activities while the bankruptcy case is active.

Process of Filing for Bankruptcy

  1. Credit Counseling: Individuals must complete a credit counseling course from an approved provider before filing for bankruptcy.
  2. Filing the Petition: The debtor files a bankruptcy petition with the court, including detailed information about their debts, assets, income, and expenses.
  3. Automatic Stay: Upon filing, the automatic stay goes into effect, providing immediate relief from debt collection efforts.
  4. Meeting of Creditors: A meeting (called a 341 meeting) is held where creditors can ask questions about the debtor’s financial situation.
  5. Discharge: If the court approves the bankruptcy filing, the medical debts, along with other qualifying debts, are discharged.

Considerations and Consequences

  • Credit Impact: Filing for bankruptcy significantly impacts the debtor’s credit score and remains on their credit report for seven to ten years, depending on the type of bankruptcy.
  • Legal and Filing Fees: There are costs associated with filing for bankruptcy, including attorney fees and court filing fees.
  • Long-Term Financial Health: While bankruptcy can provide relief from overwhelming debt, it also requires careful financial planning and discipline to rebuild credit and financial health.

Medical debt can be cleared through bankruptcy, providing a viable solution for individuals struggling with overwhelming healthcare-related expenses. Chapter 7 and Chapter 13 bankruptcy offer different approaches to discharging medical debt, each with its own eligibility requirements and processes. Consulting with a bankruptcy attorney can help individuals understand their options and navigate the legal complexities of the bankruptcy process.

blank
Written by Canterbury Law Group

Is Bankruptcy A Good Idea For You?

blank

When thinking about declaring bankruptcy, there are a lot of things to consider. Not everyone is suited for bankruptcy. It’s possible that you may resolve your financial difficulties with a few easy adjustments, or that you are judgment proof and do not require filing for bankruptcy. Or you might discover that filing for bankruptcy is your sole chance at real financial relief and a fresh start.
In the US, individual filers in bankruptcy primarily utilize one of two forms. Whichever one is best for you can be determined by you and your lawyer.

A Chapter 7 bankruptcy filing can eliminate the majority of your debts in three to six months. You might, however, lose some of your personal belongings.
Repayment plans for Chapter 13 bankruptcy must be determined by your income. The court will discharge some of your debts when you have paid off as much of them as you can over the course of the next three to five years.
Filing for bankruptcy requires commitment and time. As you work toward a clean slate, both solutions will have an impact on your credit report, future interest rates, and way of life.

Before making a choice, give your circumstance a lot of thought. The best person to assess your financial status and give you advice on your options is an attorney.

Before determining which chapter is best for you and whether to file for bankruptcy, take into consideration the following points.

Are You Able to File for Bankruptcy?

To file for any kind of bankruptcy, you have to fulfill certain requirements.

For instance, if your salary is too high, you might not be allowed to apply for Chapter 7 bankruptcy. You have to pass the so-called “Chapter 7 means test.” Alternatively, you might not be able to finish a Chapter 13 repayment plan if your income is too low or your debts are too high.

Numerous bankruptcy attorneys provide free consultations during which they can explain your alternatives and assist you in deciding if you are eligible for bankruptcy.

What Debts Cannot Be Forgiven?

bills that cannot be discharged in a bankruptcy procedure include tax bills, school loans, child support, and alimony. You will have to repay this whether you file under Chapter 7 or Chapter 13. Examine whether the majority of your debt is in one of these categories.

An “automatic stay” will prevent creditors from harassing you on qualified debts during the bankruptcy process.

What Happens to My House in the Event That I File for Bankruptcy?

Making mortgage payments could be simpler if some debts are forgiven. However, if you declare bankruptcy under Chapter 7, you can lose your house. While you look for debt relief, you could face foreclosure or property seizure. It’s not a given that most people who file for bankruptcy can keep their homes. However, it might be worthwhile for you to discuss this with a lawyer.

On the other side, you could be able to file for Chapter 13 bankruptcy if your income is sufficient. This enables you to add mortgage payments to your repayment schedule.

Is My Car and Other Property Mine to Keep?

Other property during a bankruptcy proceeding will be subject to the following:

The way you handled it
The rules that exempt properties that you can use
A loan becomes secured, for instance, if you pledge your boat as security. Even in bankruptcy, the creditor may still be entitled to seize your belongings.

Furthermore, exemption regulations in Chapter 7 bankruptcies only cover specific categories of property. State exemptions allow many people to keep their cars, but your ability to keep yours will depend on how much debt and equity you have.

Will All of My Credit Card Debts Be Forgiven?

Before filing, you should find out if a bankruptcy process will eliminate your credit card debt. Your credit card debt may not be discharged in bankruptcy if you spend excessively or misled on your credit card application.

The best route to credit card debt clearance is through Chapter 7. In Chapter 13, you will be required to pay back the majority of the loan.

Are My Paychecks and Pension Plans Safe?

The majority of life insurance policies and pension schemes are shielded against bankruptcy by state rules. Ask if your life insurance plans, 401(k) plan, and/or IRA will remain protected before declaring bankruptcy.

Lenders may be able to garnish your wages in certain circumstances. In your bankruptcy case, this may not be possible, but a bankruptcy attorney can fight to preserve your authority over your paychecks.

Will My Debt Get in the Way of My Co-Signers?

Reviewing any co-signers in all of your loan arrangements is a good idea.

It is not desirable to leave a co-signer behind on any of your loans when it comes to paying off your debt. Any co-signers will often be shielded from your debts under Chapter 13 bankruptcy, but not under Chapter 7.

Will They Get a Look at My Personal Life?

You will have to present the bankruptcy court with all of your financial information in order for bankruptcy to be approved. Furthermore, it’s possible for others to learn of your bankruptcy.

A portion of your personal belongings may be seized and sold to satisfy your debts in a Chapter 7 bankruptcy. For the next three to five years following Chapter 13 bankruptcy, you will most likely need to request authorization before using your own funds.

What About My Company?: Business Owners’ Consumer Bankruptcy

It’s not easy to acknowledge that your company is having financial difficulties. Make sure you have access to the most recent financial accounts for your business, which include predictions, balance sheets, profit and loss statements, and other crucial data.

Inform your creditors of your difficulties. Like any other company, your creditors depend on their clients and want to see them flourish. Your creditors will be more accommodating if you are truthful with them.

Examining Your Case for Bankruptcy

You should budget a significant amount of time and effort to assist your bankruptcy attorney with documentation. Along with representing your business throughout the case, you will need to assist with finishing your company’s petition and scheduling.

Organize your documents and books before speaking with a lawyer. Being organized and handling a large portion of the “leg work” yourself will significantly reduce your legal expenses.

Bankruptcy as opposed to Business Closure

It’s a good idea to have a rough notion of what you hope a bankruptcy will bring about for your business. It is important to have reasonable expectations about bankruptcy and its potential benefits for your business.

Reorganizing your bankruptcy won’t help if there is no market for your product. You cannot expect bankruptcy to solve all of your company’s financial issues, nor can it make your business lucrative.

Integrity and Resources in Bankruptcy Proceedings

Take care to ensure that you include every creditor on your bankruptcy schedules. Whether on purpose or not, filing for bankruptcy will not result in the discharge of the obligation owed to that unforeseen creditor.

Make sure you don’t give assets to friends or family in order to conceal them from creditors or the bankruptcy court. During the initial creditors’ meeting, the trustee will question you regarding these transfers. They are able to get those things back.

Don’t ever attempt to con the bankruptcy court. You are under oath at the first creditors’ meeting and you sign your bankruptcy schedules under penalty of perjury.

The court will dismiss your case if it finds that you:

neglected to list a real estate
lied or deceived about your schedules; withheld important information; or lied during testimony
If the courts find that you are dishonest, you may also face charges of bankruptcy fraud.

Financial Consequences:

  1. Credit Score Impact:
    • Filing for bankruptcy will likely have a severe negative impact on your credit score. A bankruptcy record can remain on your credit report for several years, making it challenging to obtain credit or loans.
  2. Difficulty Obtaining Credit:
    • After bankruptcy, obtaining new credit, such as credit cards or loans, may be more difficult, and if approved, interest rates may be higher.
  3. Limited Access to Financial Products:
    • Bankruptcy can limit access to certain financial products and services. For example, you may find it challenging to qualify for a mortgage or an auto loan with favorable terms.
  4. Asset Liquidation:
    • In Chapter 7 bankruptcy, some of your assets may be sold to pay off creditors. Certain assets, however, may be exempt from liquidation.
  5. Repayment Plans (Chapter 13):
    • In Chapter 13 bankruptcy, you may be required to follow a court-approved repayment plan to pay off your debts over a specified period, usually three to five years.
  6. Impact on Co-Signers:
    • If someone co-signed a loan with you, they may become responsible for the debt if you file for bankruptcy.

Non-Financial Consequences:

  1. Public Record:
    • Bankruptcy is a public record, and your filing will be accessible to creditors, employers, and the general public.
  2. Employment Impact:
    • While federal law prohibits discrimination based solely on bankruptcy status, some employers may consider it during the hiring process. Positions involving financial responsibilities may be particularly affected.
  3. Housing and Utilities:
    • Some landlords and utility companies may inquire about your bankruptcy history, potentially affecting your ability to secure housing or utility services.
  4. Impact on Personal Relationships:
    • The stress and strain of financial difficulties and bankruptcy can impact personal relationships, including those with family and friends.
  5. Loss of Non-Exempt Property:
    • In Chapter 7 bankruptcy, non-exempt property may be sold to pay off creditors. Exemptions vary by state and protect certain types and amounts of property.

It’s important to note that the specific consequences can vary based on the type of bankruptcy filed (Chapter 7 or Chapter 13), individual circumstances, and applicable state laws. Additionally, while bankruptcy has significant consequences, it also provides individuals and businesses with an opportunity for a fresh financial start.

Before deciding to file for bankruptcy, it’s crucial to consult with a qualified bankruptcy attorney who can assess your situation, explain the potential consequences, and guide you through the process.

What Is the Process of Filing for Emergency Bankruptcy?

A bankruptcy case filed with only a portion of the necessary forms is known as an emergency bankruptcy filing. An emergency filing may also be referred to as an incomplete filing, a skeleton bankruptcy, or a barebones filing, depending on where you live. The minimal information needed to invoke the automatic stay protection is included in an emergency bankruptcy petition as required by the Bankruptcy Code.

Even in urgent situations, the automatic stay begins to operate as soon as your bankruptcy case is filed. All of your creditors are required by the automatic stay to cease pursuing collection actions against you. The automatic stay can start working even before you’ve finished filing for bankruptcy thanks to an emergency petition.

While it is possible to file for bankruptcy in an emergency situation before finishing all the necessary paperwork, doing so does not release you from filing for bankruptcy in an ordinary manner. As required by law, you have 14 days from the date of your emergency filing to file the remaining forms. If not, your case will be dropped, allowing your creditors to start pursuing collection.

Why Do Individuals File for Bankruptcy in an Emergency?

Most people file for emergency bankruptcy in order to stop a collection action that could soon be initiated. Before choosing to file for bankruptcy, many people do some research and consider their options. It may take some time to gather all the required paperwork and complete all the forms, even after you’ve made the decision to file.

The automatic stay has the power to halt additional collection attempts, but it cannot reverse already completed actions. For this reason, it’s imperative that the automatic stay be in place before there is a wage garnishment, bank levy, repossession, or foreclosure. In the event that you are unable to complete all of your paperwork prior to a significant collection event, you can file for emergency bankruptcy, which will protect you from creditors until you have completed your forms.

What is Required for an Urgent Case?

Only a small portion of the documentation needed to complete your bankruptcy filing will be needed for an emergency bankruptcy filing. You still need to fulfill a few minimal requirements in order to file for an emergency.

Select the Appropriate Type of Bankruptcy

Most people file for bankruptcy using either the Bankruptcy Code’s Chapter 7 or Chapter 13. These two types of bankruptcy were intended for different purposes and operate very differently. Chapter 7 is mainly used by debtors to get rid of unsecured debt, like credit card and medical bills. You have to make your payments on time in order to maintain your vehicle or home in Chapter 7.

Repossessions and foreclosures are frequently stopped through emergency bankruptcy filings. Chapter 13 bankruptcy typically makes more sense in these circumstances. The Chapter 13 repayment plan is often used by debtors who are behind on their rent, mortgage, or auto payments in order to catch up on these payments.

The type of bankruptcy you’re filing must be specified when filing an emergency case. Switching to a different chapter isn’t always simple if you select the incorrect kind of case. Try to arrange a meeting with a knowledgeable bankruptcy attorney if you’re unsure which chapter to file under. When you arrange the consultation, make sure to mention that you’re in an emergency.

Verify Your Eligibility

Not everyone is qualified to file for bankruptcy under Chapter 7. To find out if you are eligible for Chapter 7 relief, you will need to pass a means test. Although completing the means test calculations prior to filing is not necessary in the event of an emergency, it is a good idea in case there is a problem with your eligibility for Chapter 7.

You should also see if you are eligible for a bankruptcy discharge if you have previously filed for bankruptcy. There are waiting periods between a previous bankruptcy discharge and a new discharge mandated by the Bankruptcy Code. Depending on the chapter you filed under previously and the chapter you are filing under now, these wait times vary. The wait periods only come into play if your prior case resulted in a discharge. A Chapter 13 plan can be used to make up missed payments even if you are not eligible for a discharge because of an earlier case.

If you have previously filed for bankruptcy, there are additional restrictions that might be applicable to the automatic stay. The automatic stay usually lasts from the time a bankruptcy case is filed until it is dismissed or discharged. The automatic stay in your new case will only last 30 days if you filed for bankruptcy within the last year and that bankruptcy was dismissed (not discharged). If you want to prolong the automatic stay past 30 days, you can file a motion. Usually, you have to file the motion along with your emergency documents.

When you file for bankruptcy, the automatic stay won’t apply if you’ve filed for bankruptcy twice or more in the previous year. To enforce the stay, you can file a motion, but you’ll need to wait for a hearing and a ruling. You will not be shielded from ongoing collection actions by filing for emergency bankruptcy if there is no automatic stay in place.

Enroll in a Credit Counseling Program

Prior to filing for bankruptcy, all applicants must finish a credit counseling program from an authorized provider. This covers last-minute bankruptcy petitions. Most suppliers provide the course over the phone, online, or both. The cost ranges from $10 to $45, depending on the provider. The course is offered once, with sessions lasting typically less than two hours. A certificate will be emailed to you by the provider once the course is finished. When submitting your emergency forms to the court, you also need to submit this certificate.

Fill out the Forms That Are NECESSARY.

In order to file for emergency bankruptcy, you need to at least fill out and submit the following forms:

Form 101, Voluntary Petition: This eight-page form asks for basic details about your name, address, type of bankruptcy, and history of bankruptcies, if any.

Social Security Number Declaration (Form 121): You will only use your complete Social Security number here in your documentation. It is hidden from creditors, attorneys, and even your trustee; only the court can view it.

An alphabetical list of all your creditors along with their mailing addresses can be found in the creditor matrix. The matrix must be submitted in a specific format to the majority of bankruptcy courts. In certain courts, the list of creditors must be submitted with a verification form. To be sure of the requirements, check with the court where your case will be filed.

Obtain Your Filing Cost

For Chapter 7 cases, the bankruptcy court charges a filing fee of $338, and for Chapter 13 cases, it charges $313. When you file your case, the fee is due. You can file a motion requesting the court to allow you to pay the filing fee in installments if you are unable to pay the entire amount. When you file your emergency case, most courts require you to pay a minimum first installment. For confirmation, check with your court.

You may petition the court to have your filing fee waived if your income is less than 150% of the federal poverty guidelines. When filing your emergency paperwork, you must also file your motion for installments or a fee waiver if you are not paying the full fee.

Put In The Case

New cases can only be filed online by bankruptcy attorneys. Since mailing your forms can cause a delay, it is best to file your paperwork in person in an emergency. To locate your bankruptcy court, use the federal court locater. Certain bankruptcy districts have restrictions on where you can file depending on the county in which you reside. To verify the residence rules and office hours, visit the website of your court. Finding out if your court has any additional requirements—such as bringing specific forms of identification or extra copies of your forms—also helps. Call the court clerk if you’re unsure.

I’ve filed for bankruptcy in an emergency. What Now?

Although filing for emergency bankruptcy will provide you with some immediate relief, your work is not over. Notifying the creditor who prompted you to file the emergency case is necessary. Additionally, you must finish and submit the last of your bankruptcy forms.

Let Your Creditor Know

Notification of your emergency filing will be mailed to each creditor in your creditor matrix by the bankruptcy court. However, it may take a few days or more for this notice to reach creditors. You should give the creditor a call directly in order to successfully halt a garnishment, lawsuit, foreclosure, repossession, or other collection action. Make contact with the creditor’s lawyer if you are familiar with them rather than contacting the creditor directly. Typically, you’ll need to provide them with your bankruptcy case number, the court you filed with, and the filing date. In case there is an issue, jot down the time and person you spoke with when you called.

Fill out the remaining bankruptcy forms and file them.

You have just 14 days from the time you file your emergency documents to the time you file the remaining bankruptcy forms. Remember, fourteen days can pass quickly, so don’t wait. The remaining forms, along with instructions, can be accessed online, just like the emergency forms. For every state, Upsolve also offers a free filing guide.

The bankruptcy court will send you a deficiency notice a few days after you file your emergency case. This does not imply that the material you have already filed is flawed. It simply indicates that you haven’t yet submitted all necessary forms. A list of the forms you still need to file and the due date for doing so will be included with your deficiency notice. To ensure that the remaining forms are received by the deadline, submit them in person.

The court has the right to dismiss your case if you fail to file the last of the bankruptcy forms by the deadline. The automatic stay is lifted upon a dismissal, allowing your creditors to resume collection efforts. You can file a motion requesting an extension from the court if you require more time to file the remaining forms. Don’t ask for more time unless you absolutely need it, as courts are frequently hesitant to grant these extensions.

Following the submission of all necessary paperwork, your case will be handled similarly to other bankruptcy cases. The date, time, and location of your creditors’ meeting, along with your trustee’s contact details, ought to be included in a notification you receive. About 30 to 45 days typically pass after the date of filing. It’s likely that you’ll receive a request for documents from your trustee, which you must submit at least seven days prior to the meeting.

What Drawbacks Come With Emergency Bankruptcy Filing?
The fact that you have so little time to prepare your bankruptcy forms is the largest disadvantage of filing an emergency case. The shapes are intricate. Documents like bank statements, tax returns, and pay stubs must be gathered. Another disadvantage is that you might run into unforeseen problems with your case when filling out your other forms, like property that isn’t exempt from fees. You don’t have much time to solve problems once you encounter them.

Furthermore, even though filing for emergency bankruptcy gives you some relief, in some cases it’s only a short-term fix. For example, in Chapter 7, you have to immediately bring the payments current if you want to keep your house or vehicle. You have an extended period in Chapter 13 to make up missed payments. Regardless of the chapter you file under, you only have 30 days to bring your payments current if you filed for bankruptcy to prevent an eviction.You only submit the bare minimum of paperwork to the bankruptcy court when filing for bankruptcy emergency. When you need to halt an impending threat of collection, like a wage garnishment, foreclosure, or repossession, emergency filings can be useful. In these circumstances, you might have to file for bankruptcy quickly because you won’t have enough time to finish all the paperwork. You are protected from creditors by the automatic stay, which is activated by the emergency filing. However, you only have 14 days from the date of filing to finish all other documentation. This could be dangerous, particularly if problems arise with your case. Your case may be dismissed if the remaining forms are not submitted by the deadline.

Speak With Our Bankruptcy Lawyers In Phoenix & Scottsdale

Canterbury Law Group should be your first choice for any bankruptcy evaluation. Our experienced professionals will work with you to obtain the best possible outcome. You can on the firm to represent you well so you can move on with your life. Call today for an initial consultation. We can assist with all types of bankruptcies including Business BankruptcyChapter 7 BankruptcyCreditor Representation, Chapter 5 ClaimsChapter 13 Bankruptcy, Business RestructuringChapter 11 Bankruptcy, and more.

*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.

blank
Written by Canterbury Law Group

Can Bankruptcy Stop Wage Garnishment?

Can Bankruptcy Stop Wage Garnishment?

Yes, filing for bankruptcy can often stop wage garnishment. When you file for bankruptcy, an automatic stay goes into effect, which immediately stops most creditors from continuing collection efforts, including wage garnishment. The automatic stay prohibits creditors from pursuing or continuing with collection actions, including wage garnishment, lawsuits, foreclosure, repossession, and harassing phone calls.

Here’s how bankruptcy affects wage garnishment under each chapter:

  1. Chapter 7 Bankruptcy: In Chapter 7 bankruptcy, the automatic stay stops wage garnishment as soon as the bankruptcy case is filed. However, if the wage garnishment is for certain types of debts, such as child support, alimony, or certain taxes, it may continue even after filing for Chapter 7 bankruptcy.
  2. Chapter 13 Bankruptcy: In Chapter 13 bankruptcy, the automatic stay also stops wage garnishment immediately upon filing. Additionally, Chapter 13 bankruptcy allows debtors to propose a repayment plan to catch up on past due debts, including those subject to wage garnishment, over a three to five-year period. As long as the debtor makes timely payments under the Chapter 13 plan, wage garnishment will be halted.

It’s important to note that while bankruptcy can stop wage garnishment, it may not eliminate the underlying debt. Certain types of debts, such as child support, alimony, student loans, and some taxes, are generally not dischargeable in bankruptcy and may continue to be collected even after filing.

Additionally, filing for bankruptcy has long-term financial consequences and should be carefully considered. It’s advisable to consult with a bankruptcy attorney to discuss your specific financial situation, understand your options, and determine whether bankruptcy is the right solution for you.

1 2 3 6