Filing for Bankruptcy
People who are trying to save their home from foreclosure, escape a mountain of credit card debt and prevent the repossession of their car or otherwise salvage their finances may see filling bankruptcy as a logical option.
Bankruptcy is designed to provide powerful protections, but each person's situation is unique. If you're interested in receiving detailed and specific feedback about your personal finances, you can speak with a bankruptcy lawyer in your area.
Simply fill out the below form or call 866-288-7281 to be connected with a local sponsoring bankruptcy lawyer for free!
Before Filing Bankruptcy: The Credit Counseling Briefing
In 2005, the U.S. government created a new bankruptcy law – The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). This act introduced new requirements and changed the way some bankruptcy cases are handled.
If you want the court to accept your bankruptcy petition, you must receive a credit counseling briefing from an accredited non-profit budget and credit counseling company before actually filing the paperwork. You can complete the briefing online, in person or over the phone.
The briefing is designed to make sure you've considered all your financial options (such as debt consolidation, debt settlement, creditor negotiation, etc.) and if filing bankruptcy – either under Chapter 7 or Chapter 13 – is really the best choice for you.
Filing for Bankruptcy Under Chapter 7
Chapter 7 bankruptcy is the type of personal bankruptcy that allows filers to discharge much of their unsecured debts (debts not linked to property). Credit card debt is unsecured; a home mortgage is secured.
In order to file for bankruptcy under Chapter 7, you'll have to pass a qualifying means test, which involves comparing your income to the median income level in your state.
You'll have to provide your bankruptcy attorney with information about your income, expenses, debts, property and more, so that he or she can complete the necessary paperwork for the court.
Once your case is filed, you'll be entitled to the protection of the automatic stay, which protects against collection activity and certain lawsuits and can stop creditor harassment. You'll also be assigned a bankruptcy trustee to oversee your case and you should be on the road to discharge.
Chapter 7 cases generally move quickly; the average filer gets their discharge within about six months.
Filing for Bankruptcy Under Chapter 13
Chapter 13 bankruptcy, on the other hand, allows you to catch up on past-due debts while keeping current on payments.
After completing your credit counseling briefing, you'll provide your bankruptcy lawyer with the information necessary to get your paperwork together.
Once your case is filed, the court will help you develop a three- to five-year repayment plan.
Because you'll be repaying and catching up on debts with Chapter 13 bankruptcy, you can usually keep your home and car while you're under the protection of the court.
Some petitioners choose to file Chapter 13 bankruptcy in order to prevent mortgage foreclosure.
Before Getting Your Bankruptcy Discharge: The Debtor Education Course
Another of the requirements introduced by BAPCPA is the debtor education course, which you must complete before obtaining your bankruptcy discharge.
Like the credit counseling briefing, you can complete the debtor education course online, over the phone or in person.
The course is designed to help you develop strategies for handling money, budgeting, staying out of debt and generally making the most of your bankruptcy filing.
Working with a Bankruptcy Lawyer
As you read this page, you may have noticed that we mentioned working with a bankruptcy lawyer several times. That's because a bankruptcy lawyer can often help make sure your case progresses smoothly from start to finish.
If you're ready to take the next step, simply fill out our free case evaluation form or call us today at 866-288-7281 to connect with a sponsoring bankruptcy lawyer.