How Can Bankruptcy Help Me?

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Bankruptcy is a legal procedure brought pursuant to the Federal Bankruptcy Code. Bankruptcy protection is provided for in the United States Constitution. It is designed to give you protection from your creditors, protect your assets, and give you a fresh financial start.

Ways bankruptcy can help you:

Once you file a case the federal court issues an automatic stay against all your creditors which prohibits:

  • Auto repossessions
  • Mortgage foreclosures
  • Wage garnishments
  • Collection calls
  • Lawsuits
  • Any and all collection activity

Discharge of debts:

  • Credit card
  • Medical bills
  • Personal loans
  • Repossession balances

What are the Types of Bankruptcy?

Chapter 7 and chapter 13 are the two types of cases. Chapter 7 will wipe out all of your unsecured debts credit cards, medical bills, utilities, etc. in most situations, you will keep your house and vehicle in Chapter 7, as long as you are reasonably current on payments.

Chapter 13 is a repayment plan if you don’t qualify for Chapter 7 based upon your income and/or assets. You must have a regular source of income. The Chapter 13 will stop a foreclosure on your home or repossession of your vehicles. It is designed to allow you to catch up delinquent mortgage payments or vehicle payments if you’re behind.

In a Chapter 13 case you will pay your unsecured creditors somewhere between 1% and 100% of the debt owed depending upon your individual circumstances. The plan will last from three to five years.

What debts will bankruptcy not erase?

  • Alimony and child support
  • Most student loans – however there is a hardship exemption in some situations
  • Certain tax debt – this is complicated, but we will analyze your situation to determine whether any of your tax debt can be discharged.
  • Certain fines and penalties imposed by a court or government agency.

What happens after bankruptcy?

At the conclusion of your case the court will issue a discharge order officially wiping out the debts listed. In almost all situations, your credit score will immediately improve after filing bankruptcy since you’re now debt free.