Bankruptcy is a very powerful
form of debt relief available to anyone. Bankruptcy is
a drastic measure and should be used only when no other
form of relief is available. There are two types of consumer
bankruptcy relief: Chapter 7 and Chapter 13. Both stop
collection actions of all kinds, including wage garnishments,
tax levies, home foreclosures, car repossessions and
utility shutoffs.
Under Chapter 7, we prepare and file a petition seeking an outright discharge
of your debts without further payment. The petition discloses current income,
living expenses, real and personal property, debts, and details about how you
have handled your financial affairs over the past two years. If your income does
not exceed reasonable living expenses, you probably qualify for Chapter 7 relief,
but there may be reasons to consider a Chapter 13 plan instead, e.g. to stop
a home foreclosure. Not all debts are dischargeable, e.g. certain taxes, student
loans and domestic support obligations. If you have secured debts, e.g. mortgages
and car loans, you may choose to either keep the property and pay for it, or
surrender the property and be relieved of the debt. The filing fee is $299 and
attorney fees vary, depending on the complexity and amount of work involved in
each case.
In Chapter 13, we file a petition that includes a plan that provides for the
payment of debts in various ways, depending on the nature of each debt. The petition
discloses current income, living expenses, real and personal property, debts,
and details about how you have handled your financial affairs over the past two
years. The plan provides for you to make affordable payments, usually through
the convenience of a payroll deduction, over a period of three to five years.
The plan directs how your funds are to be distributed to your creditors. Chapter
13 is a powerful tool that can be used to make paying debts more affordably,
and not all debts have to be paid in full under Chapter 13, so there can be significant
savings. The filing fee is $274, and attorney fees vary according to the complexity
and amount of work involved.
