Bankruptcy

 

Debt can strike anyone, at any time. And your creditors rarely care about the painful realities of modern financial life. Fortunately, personal bankruptcy provides a powerful weapon against aggressive creditors.  Every year, more than a million Americans use this trusted process to find debt relief.  

 

Bankruptcy Basics 

If you’re looking to eliminate credit card debt, pay off medical bills, or stop home foreclosure, filing for bankruptcy can help you regain your financial health. 

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Bankruptcy is a right guaranteed by the United States Constitution and as such, individuals in all walks of life take advantage of this right afforded to Americans. 

Once a petitioner files for bankruptcy, the automatic stay kicks into effect. This is a remarkably powerful weapon against aggressive creditors. The automatic stay stops collection lawsuits, halts foreclosure proceedings, and silences creditors. 

Individual filers generally decide between two types of personal bankruptcy: Chapter 7 and Chapter 13. Your decision to opt for one over the other depends on your unique financial circumstances. Deciding which type to choose is easy with an experienced attorney.

Once a petitioner files for bankruptcy, the automatic stay kicks into effect. This is a remarkably powerful weapon against aggressive creditors. The automatic stay stops collection lawsuits, halts foreclosure proceedings, and silences creditors. 

Individual filers generally decide between two types of personal bankruptcy: Chapter 7 and Chapter 13. Your decision to opt for one over the other depends on your unique financial circumstances. Deciding which type to choose is easy with an experienced attorney.

 

In Chapter 7 bankruptcy, a petitioner may discharge some or all unsecured debt. In exchange for the debt relief, the trustee may liquidate some of the filer's property. Before filing for Chapter 7, the petitioner must first pass a Chapter 7 Means Test. 

Timeline
No less than 180 days before filing – All people filing for bankruptcy must take a certified credit counseling program.

90 days before filing– You must be a resident of the state in which you are filing for a minimum of 90 days prior to filing.

Day of filing – Your bankruptcy case officially begins. An Automatic Stay will be ordered.

15 days after filing – You must provide the court all documentation of your liabilities, income, assets, etc.

30 days after filing – This is the deadline for filing a Statement of Intent indicating which debts you want to reaffirm.

45 days after filing – A meeting of creditors is held, which is their opportunity to oppose discharge of their debt. You must attend another credit counseling meeting.

105 days after filing – If there are no creditor objections the Trustee will issue the discharge.
Lawyers from our firm have helped homeowners save their homes from foreclosures, negotiated modification of loans and tax claims, prosecuted claims under federal and state consumer protection laws and designed workout plans inside and outside of bankruptcy that have allowed our clients to protect their assets. These actions have returned our clients, their families and their businesses to sound financial footing.

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Not everyone will qualify for Chapter 7. For those who make a bit more money or would prefer to pay off their debts over an extended period of time, Chapter 13 bankruptcy may be the better option. In Chapter 13 bankruptcy, a petitioner consolidates debts into a single payment plan over an extended period of time. Over three to five years, the filer makes modest monthly payments to a trustee who deals directly with the creditors. 

Timeline
(The timeline prior to filing is the same for Chapters 7 and 13.) 

15 days after filing – You must provide the court all documentation of your liabilities, income, assets, etc. and file your repayment plan with the court.

30 days after filing – You must make your first payment under the repayment plan.

45 days after filing – A meeting of creditors is held, which you must attend. This is their opportunity to oppose discharge or exemption of their debt. 

45 days after the creditor meeting – The bankruptcy court holds a confirmation hearing where the trustee gives an opinion on the confirmation of the repayment plan.

90 days after the creditor meeting – Creditors must file a proof of claim to receive payments from the repayment plan. 

3-5 years after filing – A final discharge will be issued if all repayments have been made.

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Payton Legal works with other law firms and clients directly to bring claims against mortgage loan servicers and debt buyers within consumer bankruptcy cases. 

Bankruptcy Advisory Proceedings: 

1. Discharge violations

2. Stay violations

3. Violations of federal and state Fair Debt laws

4. Violations of Truth-in-Lending laws

5. Violations of Real Estate Settlement Protection Act