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Since the overhaul of the bankruptcy code in October of 2005, filing bankruptcy carries far fewer benefits for the typical consumer. Prior to the overhaul, most cases went the way of a chapter 7 filing where debts were dismissed and consumers were given a fresh start. The filing could be completed within days and entire process took four to 8 months to complete.  

 

The new version of the code requires consumers to take a state means test to determine which bankruptcy that consumer qualifies for. If it's determined that income is above the state mean (average), the consumer will most likely be put in a chapter 13 bankruptcy, which is far more onerous, lengthy, and restrictive than a chapter 7. Instead of the dismissal of debt as seen in a chapter 7 filing, the consumer will now have a “work out” phase where payments are made to the various creditors.

 

 This phase can take anywhere from three to five years to be completed. Additionally, under chapter 13 rules, creditors are enabled to act much more aggressively towards debtors that miss even one payment. The Obama administration is pushing for reforms in the bankruptcy code such as giving judges the power to “cram down” mortgage values but the issue has run into enough opposition that passage in its current structure is considered unlikely.

 

The disadvantage of personal bankruptcy is that a record of the bankruptcy stays on your credit record for up to 10 years, and stays on your public record for life. While it's on your credit record (7-10 years), it will be a big hurdle to get over when applying for any kind of credit. Additionally, even after the bankruptcy is off of your credit record, a bankruptcy will literally follow you around on the public record.  

Any time you apply for a new job, or for credit, if you are asked if you have ever filed for bankruptcy, you are required by law, to say yes. When applying for a job with lots of competition or trying to get the best terms on a loan having a bankruptcy in the past could be a deal killer.

 

Sections:

Bankruptcy Overview

Chapter 7 Bankruptcy

Chapter 13 Bankruptcy

 

Bankruptcy Overview

A last resort option for consumers due to the onerous, restrictive, and invasive nature of bankruptcy laws since they were overhauled in October of 2005. Most filings are now for chapter 13 which carries far fewer benefits than the dismissals of debt which were the norm in chapter 7 filings.

 

Chapter 7 Bankruptcy

Are you overwhelmed with debt?  Are your financial options running low?  Do your monthly bills sit in a pile, unpaid? Do creditors and collection agencies call you every hour of every day asking for money you don’t have?
If the answer is yes to any of these questions, you are probably in need of a qualified  bankruptcy attorney.  A  bankruptcy attorney can tell you if Chapter 7 bankruptcy is the right way to go for your particular financial situation.

 

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is a form of liquidation which is the most common form of consumer bankruptcy.  Often times, it is the best bankruptcy option for consumers with a relatively small amount of debt, as well as those who don’t have much valuable property.   At 800 Debt Settle, our  team is prepared to answer any and all questions you may have about bankruptcy.


In the end, what a bankruptcy should be targeted towards is a fresh start for the debtor.  The focus of Chapter 7 bankruptcy is to discharge the debtor’s debt, eliminating the personal liability on as much debt as possible.  It is important to remember that while Chapter 7 liquidation usually results in a complete discharge of debts, it is not an absolute rule and some types of debts are not discharged.  To get excellent answers to your Chapter 7 bankruptcy questions, you should contact an attorney.

 

Time

Chapter 7 liquidation bankruptcy usually takes about four to six months from start to finish, often taking only one trip to 341 meeting.  A 341 creditor meeting is a meeting of the debtor’s creditors and is required under section 341 of the United States Bankruptcy Code.  During the Chapter 7 liquidation procedure, this is the first meeting which involves the trustee, the creditors and the debtor.  It occurs usually 20 to 40 days after the Chapter 7 bankruptcy is filed.

 

At the 800 Debt Settle, our  team is dedicated to your best interests.  After sitting down with us for your initial consultation, we will assess your total situation, gather as much information as possible and help you make an educated decision on your financial future.

 

After filing for Chapter 7 bankruptcy, you will be put into “automatic stay,” which immediately stops your creditors from trying to collect on your debts.  This temporarily prevents creditors, to whom you owe secured debt, from going after your car, house or other property.  The automatic stay will cease most legal proceedings from happening and will end collection efforts.

In essence, once you file your bankruptcy case, most of your financial problems are over.

Choosing a qualified  bankruptcy attorney is possibly the most important part of your bankruptcy case.  Filing for Chapter 7 liquidation can be complicated, but with a  bankruptcy attorney at your side, you can successfully go through the bankruptcy process and get your debt problems under control.

 

Chapter 13 Bankruptcy

Chapter 13 bankruptcy, sometimes known as a “Wage Earner Plan,” is a way for consumers/debtors to undergo a financial reorganization which is supervised by the bankruptcy court. While Chapter 7 offers an immediate relief to secured and unsecured debt, Chapter 13 is more of a rehabilitation program.

Under Chapter 13 bankruptcy, the consumer will be able to hold on to all of their property if they can repay their creditors over a three to five year period. The team at the 800 Debt Settle can walk you through Chapter 13 bankruptcy effectively and efficiently.

 

How Does Chapter 13 Happen?

 

There are countless ways in which a person can find themselves in such harsh debt problems that they seek out Chapter 13 bankruptcy. Illness, loss of work, divorce, bad luck, poor planning and other unforeseen circumstances can all contribute to the kinds of debt problems that Chapter 13 bankruptcy is designed to help fix.

Credit Card Debt

 

Throughout , and the United States, people are overwhelmed from the affects of credit card debt. Massive credit card debt is one of the major causes of Chapter 13 bankruptcy, because people use credit cards when things get tight financially and can’t pay them back. Credit Card companies spend billions of dollars in marketing to get you to use their cards as often as possible, causing you to live beyond your means. What you need to help you through your financial challenges is a bankruptcy law firm that can help you through this situation, understand your circumstances and help get you out of it.

Chapter 13 bankruptcy is designed to enable each debtor, under court protection and supervision, to apply a portion of future earnings to the payment of some or all of their debts over a period of time. The consumer/debtor is protected from creditors through the automatic stay while the plan of repayment is calculated and carried out. It is sometimes also called “Consumer Debt Adjustment,” and is akin to Chapter 11.

 

The 800 Debt Settle works tirelessly to help each and every client we work with. Our team is well respected in the community, and our successful track record of helping people through Chapter 13 bankruptcy is unparalleled.

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