What Are The Different Types Of Bankruptcy?
Chapter 7 Liquidation ‑ All non‑exempt property is sold and the funds are used to pay your creditors. In order to file Chapter 7 now you must first pass the Means Test which is supposed to determine if you are making too much money to file a Chapter 7.
Chapter 13 Reorganization ‑ Allows individual debtors to pay off all or a portion of their debts over a 3‑5 year period; can be used to make up past due house or car payments and pay nondischargeable tax debts. You must still take the Means Test which will determine how long your Chapter 13 will last (3 or 5 years).
Chapter 11 Reorganization ‑ used mostly by businesses, much like debt consolidation. Used by corporations and other businesses to reorganize their business and repay all or a portion of their debts.
Chapter 12 Reorganization For Farmers ‑ similar to Chapter 13, but for only farmers.
How Long Does It Take?
In most cases, Chapter 7s will be completed in five months; Chapter 12, and 13 payment plans last 3 to 5 years. Chapter 11 plans have no set length.
Can Bankruptcy Stop A Foreclosure?
Yes, a reorganization bankruptcy allows debtors to pay off the arrearage over time and continue to make monthly payments on the mortgage.
Will I Have To Go To Court?
One hearing called the “meeting of creditors” is required in all cases. If there are unforeseen complications or objections that cannot be settled out of court, further hearings in front of a judge may be necessary. You will also have to complete a debt management course before you receive your bankruptcy discharge. Theses courses are offered by private firms rather than the court and may be taken telephonically or over the Internet.
What Happens To My Property If I Must File Bankruptcy?
Certain property can be claimed as “exempt.” This is property you may keep. Any non‑exempt property may be taken by the trustee and sold to pay your creditors. For example, you may have a up to a $150,000 equity exemption in your home and a 100% exemption in qualified retirement plans (except for contributions made within 120 days of the bankruptcy filing).
Can My Creditors Still Contact Me?
Once the bankruptcy is filed, an automatic stay goes into affect which prohibits all your creditors from collection activities. They may contact you for information purposes, but are not allowed to ask for payment of any kind.
Will I Still Have To Pay My Back Taxes?
Certain taxes may be discharged in a Chapter 7 or paid over time in a Chapter 11 or 13. Mr. Campbell will analyze your situation and let you know the best possible way to avoid paying back taxes.
How Will Filing Bankruptcy Affect My Divorce?
Bankruptcy planning should be done before the final divorce decree is obtained. This way your required payment of joint debts may be discharged without violating a court order.
Do I Need An Attorney If I Am A Creditor And Someone Who Owes Me Money Files Bankruptcy?
Creditors also have rights in bankruptcy. Each case must be looked at on a case by case basis. A creditor has the right to share in the distribution of a debtor's assets and has the right to make sure that the debtor is being truthful regarding the assets he owns. Certain debts, such as fraud debts or debts based on willful and malicious acts may be non‑dischargeable in a bankruptcy if a creditor files an action in the bankruptcy. A creditor that is secured by a lien on a house, car or other property has additional rights to protect his collateral. We offer an hour long fixed fee consultation to examine your situation and to advise you of how your rights are affected by the bankruptcy. Oftentimes, this consultation is sufficient to advise you of your rights and how you can protect these rights yourself without further legal representation. If you case is more complicated and requires legal representation, Harold E. Campbell, P.C. stands ready to assist you throughout the entire bankruptcy process to make sure your rights as a creditor are protected.
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