Many individuals and families are struggling financially under the weight of credit card and other debts. Creditors and banks often bring lawsuits to collect overdue debts. Bankruptcy can potentially stop these lawsuits, help individuals overcome their debt problems, and stop the struggle to repay their crushing debt burdens.
Depending on your situation, a chapter 7 bankruptcy can do the following:
- Eliminate the legal requirement to pay creditors. This includes credit card debts.
- Stop lawsuits.
- Stop wage garnishments on salaries.
- Stop harassment at home or work.
Bankruptcy seeks to give those in debt trouble a fresh start. We also advise clients on how to manage their credit after bankruptcy.
You are welcome to call us and discuss your case. Call today at 312-448-8491.
What debts can bankruptcy eliminate?
Chapter 7 bankruptcy can permanently eliminate most debts. A partial list of debts that can be eliminated includes:
- Credit Cards
- Bank loans
- Medical Bills
- Pay-Day Loans
- Electric or phone bills
- School Tuition (but not most student loans)
Does filing for bankruptcy get rid of all my debts?
Not all debts. The law still requires debtors to pay:
- Child support
- Fraudulent debts
- Certain back taxes
- Student loans
- Certain fines owed to the government
- Recent credit card purchases and cash advances
There are some instances where taxes will be dischargeable. We can help you determine whether you are eligible for that.
What type of bankruptcy should I file?
For individuals, the three relevant bankruptcy chapters are 7, 11, and 13. In a chapter 7 bankruptcy you are wiping out your debts and getting a fresh start. If you do not own a home, or if you own a home with little equity and are current on your mortgage payments, then Chapter 7 is likely the best option. In a chapter 13 bankruptcy you are using the bankruptcy process to cure past due amounts and catch up with payments over 3-5 years. If you are behind on your mortgage, have a second mortgage that is under water, or owe tax debt, then Chapter 13 may be advisable. In a chapter 11 bankruptcy you are not subject to the time limits of a chapter 13 case. Also unlike a chapter 13 bankruptcy, there are no limits on the total amount of permissible debts.
Deciding the right chapter is a critical decision and should be made after a thorough consultation.
What are misconceptions about bankruptcy?
A central misconception about bankruptcy is that you will lose everything. Most bankruptcy filers are allowed to keep everything they own throughout the process. It is dangerous to base your decisions on the misconceptions about bankruptcy. Contact us for a free consultation and learn the facts.
What assets are exempted from bankruptcy?
Real, personal, and intangible properties are typically exempt. Exempt assets must be valued under a certain amount and must be listed in your bankruptcy petition to be approved or denied. Once approved as exempt property, these assets are protected from collection. Typical exempt assets include homesteads, vehicles, retirement assets, and personal property.
What does an automatic stay do?
An automatic stay stops creditors and collection agencies from attempting to collect money from you. It starts when your bankruptcy paperwork is filed, and it effectively stops phone calls, letters, repossessions, lawsuits, wage garnishments, and foreclosures. The bankruptcy court you file with will issue a notice to all creditors about your bankruptcy petition.
Will filing for bankruptcy destroy my credit score?
Not necessarily. Filing for bankruptcy can actually benefit your credit score over time. Most individuals see their credit scores improve after bankruptcy because many debts are discharged when the bankruptcy becomes final.
How long does bankruptcy stay on my record?
Bankruptcy can stay on your record for 7 to 10 years. But it is a myth that you must go 7 years with bad credit after filing bankruptcy. You can have good credit in just 3 years.
Can I file for bankruptcy without an attorney?
You can. But it is strongly recommended that you hire an attorney who knows federal bankruptcy law and the filing procedures. Bankruptcy contains many complicated issues and one misstep can jeopardize the process.
Are the options besides bankruptcy?
Yes. There are different ways to solve financial problems other than bankruptcy. These include debt consolidation, debt negotiation, and seeking relief under state and federal consumer protection statutes. There are pros and cons to non-bankruptcy options. During our consultation we carefully analyze your situation to see if non-bankruptcy options are available.