Bankruptcy
You have worked hard to take care of your family, and you have always planned your spending carefully. But, today’s tough economic times can affect you in so many ways:
- Job loss
- A sudden increase in mortgage payments
- Credit card rule changes, including rising interest rates and sudden increases in minimum payment requirements
- Expensive health care emergencies
A fresh start
Bankruptcy might give you the fresh start you need. The moment you file bankruptcy, your creditors have to stop trying to collect your debts and take your property until those debts are sorted out in court, and a plan is put into place.
Depending on your individual situation, that plan may help you get a fresh start in a number of ways:
- Eliminate or reduce your legal obligation to pay most or all of your debts.
- Stop foreclosure on your home and provide a way to catch up on missed payments.
- Stop repossession of your car or other property, or even force the creditor to return property that was already repossessed.
- Stop creditor actions to collect a debt, including wage garnishment and harassment.
Types of bankruptcy
When the time is right, one of these forms of bankruptcy can give you the fresh start you need:
- Chapter 7, which eliminates or reduces your debt
- Chapter 13, which establishes a plan that allows you to repay your debt within three to five years
- Foreclosure, which may be handled as part of a bankruptcy, but can also potentially be handled without filing bankruptcy
The attorneys at Dixon & Johnston, P.C. will talk with you about your situation and tell you which option is the right one for you.
Chapter 7
Also known as a liquidation plan, Chapter 7 bankruptcy is often the quickest and easiest form of bankruptcy, and it allows you to keep many of your possessions and eliminate much of your debt. Even if you have significant assets, you may qualify to file for Chapter 7 bankruptcy, which will provide you with the fresh start you need to rebuild your life and your future in the following ways:
- It completely eliminates most unsecured debts, such as credit cards and medical bills.
- It offers a choice between two systems that permit you to keep a wide range of exempt property, including (but certainly not limited to) your home, specific personal property, personal retirement accounts (such as IRA and Keogh accounts).
The attorneys at Dixon & Johnston, P.C. can help determine if you qualify for a Chapter 7 bankruptcy, based on the legal requirements for monthly income, combined with a comparison of your unsecured debt and the amount of income you have available to pay that debt.
There are certain types of debt that cannot be eliminated under Chapter 7 bankruptcy. For example, taxes, student loans, and child or family support debts are not dischargeable.
Chapter 13
When you are earning an income and meet other requirements, Chapter 13 bankruptcy, also known as Wage Earner Bankruptcy, may be the right choice. Under Chapter 13, you create a plan to repay all or part of your debt over a three to five year period. Under Chapter 13, you generally get to keep all of your hard-earned possessions. As you work through your repayment plan, you move closer to the fresh start you need for a secure life.
Chapter 13 bankruptcy might be the right option for you under these circumstances:
- After reasonable monthly expenses, your income permits you to apply money toward your outstanding bills. This includes the eventual full payment of priority claims such as back taxes and child support.
- You want to retain the equity in your home.
- You want to avoid repossession of your car.
- You want to keep more of your property and assets than you could keep if you filed Chapter 7 bankruptcy.
- You feel a moral obligation to pay down your debt.
Many steps are involved in filing for Chapter 13 bankruptcy, including the following:
- Determining qualification for Chapter 13
Many details are involved in determining whether you qualify for Chapter 13. You need a law firm like Dixon & Johnson, P.C., that knows how to look at your financial situation and make this determination. - Establishing a repayment plan
Once you have qualified for Chapter 13, your repayment plan must meet numerous requirements. The good news is that as soon as you file your paperwork with the bankruptcy court, your creditors are immediately prevented from contacting you directly or staking a claim on any of your property. - Beginning the court process
Once your case gets to court, The court establishes many processes that need to occur as part of the Chapter 13 process, including the following:- It appoints trustee to review your paperwork and ensure that your creditors eare paid as much as possible
- It sets up a meeting between you and the trustee, which the creditors may or may not attend
- The bankruptcy judge will review the repayment plan and either accept it or ask for changes.
Although Chapter 7 may be a quick approach, Chapter 13 bankruptcy is another good alternative that provides you with relief and allows you to protect your assets.
Foreclosure
If you are facing foreclosure, it can certainly be handled within a bankruptcy filing. If you are handling any other debts, however, it may not be necessary to file bankruptcy. The attorneys at Dixon & Johnston, P.C. can help you explore many options, such as these:
- Negotiation: With foreclosures at an all-time high in today’s economy, your lender may consider negotiating new terms or a forebearance agreement.
- Refinancing: We can help you review the terms of new financing that will alleviate your payment problems.
- Declaratory relief: If you have grounds for disputing the terms of the mortgage, we can seek relief by asking the courts to stop the foreclosure.
- Federal relief: We keep up-to-date on new options as they become available through the federal government. They are committed to offering solutions that will allow responsible homeowners to keep their homes.
Getting the experience you need
You need the 30 years of experience behind the firm of Dixon & Johnston, P.C. to determine what bankruptcy option is best for you and to see your bankruptcy proceeding through to completion. We discuss the details of your financial situation with you so we can recommend the form of bankruptcy that is right for you. Then we perform the steps needed to complete the process as quickly and easily as possible.
For more information
For more information about bankruptcy, refer to our Bankruptcy Frequently Asked Questions.
Call for a free consultation
Call Dixon & Johnston, P.C. at 1-800-733-2440 to review your case. Or, contact us online. We will help you to determine if you qualify for bankruptcy, and we can tell you the form of bankruptcy that is right for your individual situation.
