A decision to file for bankruptcy should be made only after determining that bankruptcy is the best way to deal with your financial problems. This website cannot explain every aspect of the bankruptcy process. If you have any questions after viewing this summary, you should contact Chambers Law Offices LLC.
WHAT IS BANKRUPTCY? Bankruptcy is a legal proceeding in which a person who cannot pay his or her bills can get a fresh financial start. Filing bankruptcy immediately stops all of your creditors from seeking to collect debts from you, at least until your debts are sorted out according to the law.
WHAT CAN BANKRUPTCY DO FOR ME? Bankruptcy may make it possible for you to eliminate the legal obligation to pay most or all of your debts. This is called a "discharge" of debts.
- Stop foreclosure on your home and allow you an opportunity to catch up on missed payments. Bankruptcy does not, however, automatically eliminate mortgages and other liens on your property without payment.
- Prevent repossession of a car or other property.
- Stop wage garnishment.
- Stop debt collection harassment.
- Allow you to challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more than you really owe.
WHAT BANKRUPTCY CANNOT DO? Bankruptcy cannot, however, cure every financial problem. In bankruptcy, it is usually NOT possible to:
- Eliminate certain rights of "secured" creditors. A creditor is "secured" if it has taken a mortgage or lien on property as collateral for a loan. Common examples are car loans and home mortgages.
- Discharge debts singled out by bankruptcy law for special treatment such as child support, alimony, most student loans, court restitution orders, criminal fines, and most taxes.
- Protect cosigners on your debts. When a relative or friend has cosigned a loan, and the consumer discharges the loan in bankruptcy, the cosigner may still have to repay all or part of the loan.
- Discharge debts that arise after bankruptcy has been filed.
TYPES OF BANKRUPTCY FOR CONSUMERS:
While there are a number of types of bankruptcy provided for by law, Chambers Law Offices LLC focuses on the practice of consumer bankruptcy law. There are two types of bankruptcy serving the needs of consumers. Either type of case may be filed individually or by a married couple filing jointly:
- CHAPTER 7 is known as "straight" bankruptcy or "liquidation". It requires an individual to give up property which is not "exempt" under the law. Generally, consumers who file Chapter 7 keep all of their property except property which is very valuable or which is subject to a lien which they cannot avoid or afford to pay.
- CHAPTER 13 is a type of "reorganization" used by individuals to pay all or a portion of their debts over a period of years using their current income.
WHAT MUST I DO BEFORE FILING BANKRUPTCY? You must receive budget and credit counseling from an approved credit counseling agency within 180 days BEFORE your bankruptcy case if filed. The agency will review possible options available to you in credit counseling and assist you in reviewing your budget. Different agencies provide the counseling in-person, by telephone, or over the internet. If you decide to file bankruptcy, you must have a certificate from the agency showing that you received the counseling before your bankruptcy case was filed.
It is usually a good idea for you to consult with an attorney before you receive the required credit counseling. Unlike a credit counselor, who cannot give legal advice, an attorney can provide counseling on whether bankruptcy is the best option. If bankruptcy is not the right answer for you, a good attorney will offer a range of other suggestions. The attorney can also provide you with a list of approved credit counseling agencies, or you can check the website for the United States Trustee Program at www.justice.gov/ust
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ATTENTION: LEGAL DISCLAIMER: The information provided at this website
is for informational purposes only and is not intended as legal advice
on a specific case. The services of an attorney should be retained for
legal advice on a specific case.
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We are a debt relief agency. We help people
file for bankruptcy relief under the Bankruptcy Code.
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