Given the recent recession in the United States, it should come as no surprise that bankruptcy filings have been at an all-time high in recent years. If you are one of the many people who were hit hard by the recession, you may wish to consider the protection offered by filing bankruptcy as well. While many people are reluctant to file for bankruptcy protection for a variety of practical and emotional reasons, it is important to remember that bankruptcy protection is available to help people just like you. Deciding which chapter of the Bankruptcy Code is right for you is the first step toward a brighter and less stressful future. For most individuals, chapter 7 is the best option.
A chapter 7 bankruptcy is the quickest type of bankruptcy relief available, you are discharged in three to four months from the date the case is filed, and your wages are never garnished. If you file a Chapter 13 case, you will be in an active bankruptcy case for three to five years, and your paycheck and income tax refunds will be garnished to pay your creditors. This is why I rarely advise a Chapter 13 bankruptcy filing for my clients. If you live in Central Texas and have been told that you need to file a Chapter 13 bankruptcy case, please contact my office for a free initial appointment before your case is filed, and let us give you a second opinion!
Whether you file a Chapter 7 or a Chapter 13 bankruptcy case, your bankruptcy paperwork will include a document known as the “means test.” This is an analysis of your income in the six months preceding the filing of your bankruptcy case. I actually teach other attorneys at legal seminars how to complete this form, and so I am very knowledgeable about how to correctly fill out this form and make your case a Chapter 7 case, as opposed to a Chapter 13 case. Don’t think you “make too much money” for a Chapter 7. A lot of my clients believe that, but they are surprised when they learn that I can file a Chapter 7 case for them!
Once we prepare your bankruptcy schedules and then spend several hours reviewing them with you to make sure that they are perfect, we then file your bankruptcy case. At that time, the creditors are prohibited from collecting from you through foreclosure or repossession or calling you in an attempt to collect a debt. Also, once you have retained me as your attorney to file a bankruptcy case for you, you can stop paying your unsecured creditors while you pay legal fees and prepare your bankruptcy paperwork. If creditors call or write you, I will respond to those contacts for you and advise them that I am your attorney, and under the Fair Debt Collection Practices Act, all future contact must come through my office. I do this for all of my clients after they have retained me for a bankruptcy filing for no additional fees. My clients report that the relief of no longer receiving creditor harassment is amazing and gives them breathing room while they work on their paperwork and get the balance of my fees paid so that their case can be filed.
After I file a Chapter 7 case, I frequently begin the process of applying for a home loan modification. This enables the clients to retain their homes and reduce their monthly payments while also eliminating the vast majority of their debt. Many Chapter 7 clients surrender their old cars and obtain new or used vehicles either during their Chapter 7 case or immediately after their Chapter 7 discharge. Therefore, the Chapter 7 bankruptcy not only rids them of debt but helps them rebuild their credit by financing a new or used car. I have relationships with three local dealerships that assist my Chapter 7 clients to obtain replacement vehicles during or after their Chapter 7 bankruptcy case is filed. These options are rarely available at other law firms. If you live in Central Texas and are considering a bankruptcy filing, please call me for a free initial appointment!
The only debts that are not automatically discharged in a Chapter 7 case are student loans, child support, and DWIs. Even some tax debt is dischargeable in Chapter 7. And yes, you can discharge a “Payday” loan in a Chapter 7 bankruptcy.
For most debtors, chapter 7 provides relief from creditors and a fresh start in life. If you have been living from paycheck to paycheck and still cannot get ahead of your creditors with no end in sight, consult an experienced bankruptcy attorney, such as Erin B. Shank, to determine if a chapter 7 bankruptcy is right for you.