Bankruptcy and the Reason People File Bankruptcy

Bankruptcy provides relief for people who are overwhelmed by debt. The common reasons for people seeking protection from creditors include credit card bills, a loss of income, divorce, student loans, medical debt, or an unaffordable mortgage. Because bankruptcy may involve the court-ordered liquidation of your assets and remain on your credit report for several years, bankruptcy is often a measure of last resort.

Bankruptcy Chapters Overview

Chapter 7 is for consumers with limited assets or certain businesses that wish to liquidate or dissolve their operations.  This chapter has qualifying criteria for individuals (household income) and most debts are wiped out entirely.  Chapter 13 is known as debt reorganization whereby you repay your creditors over a 3 or 5-year plan.  In many cases, certain creditors receive only a fraction of what they are owed, or they may not receive anything at all.  Homeowners can file for Chapter 13 in order to keep their homes.  A Chapter 11 bankruptcy  is similar to a Chapter 13 but is intended primarily for the reorganization of businesses with heavy debt burdens.  However, individuals who cannot qualify for Chapter 7 or Chapter 13 due to the Bankruptcy Code’s debt or income limitations can file under Chapter 11 .

Bankruptcy and Credit Counseling Course

If you are considering filing for bankruptcy, you will need to take a credit counseling course.  One website approved to issue certificates in compliance with the Bankruptcy Code is CC Advising .  This certificate is good for six months and is required before you can file for bankruptcy. For additional information concerning bankruptcy, you can go to the United States Bankruptcy Court Debtors’ website.

Getting Started for Bankruptcy

Bankruptcy filings require you to disclose a great deal of information about your entire financial life, including…

  • Your household income
  • Your household expenses
  • Your assets
  • your debts
  • Your recent financial history
  • Your most recent tax returns

Often the easiest way to start is to arrange a “big picture” meeting with a bankruptcy lawyer.  You’ll need to prepare for this meeting by sketching out a budget and listing all debts and assets, and if you decide to pursue bankruptcy relief, your lawyer can give you a list of what else he or she needs.

It is always in your best interest to provide your attorney, and ultimately the bankruptcy court, with accurate and truthful information. Fortunately, credit reports and public records can be accessed easily and most bankruptcy debtors are able to put together within just a few days all the information they need to file your most recent tax returns.

FRAZEE LAW GROUP’S BANKRUPTCY FILING PRICING

Chapter 7 Filing

$1,000 Starting at
  •  Stop Lawsuits
  •  Stop Court Judgments
  •  Stop Wage Garnishments
  •  Stop Foreclosure (temporarily)
  •  Stop Creditor Harassment
  •  Stop Medical Bills
  •  Stop Credit Card Payments
  •  Fresh Start without debt
  •  Answer your telephone free of harassment

Chapter 7 bankruptcy, also called straight or liquidation bankruptcy, is a relatively fast process designed to discharge commonly unsecured debts like credit card bills and medical expenses.

Find out More

Chapter 13 Filing

$1,000 Starting at
  •  Stop Lawsuits
  •  Stop Court Judgments
  •  Stop Wage Garnishments
  •  Stop Bank Account Levies
  •  Stop Foreclosure
  •  Stop Creditor Harassment
  •  Stop Medical Bills
  •  Stop Interest rates and Penalties on Credit Card Accounts
  •  Make reduced payments on debts
  •  Fresh Start without debt after end of 3-5 years

Chapter 13, the debtor retains ownership and possession of all of his or her assets, but must file a repayment plan to pay back all or a portion of his debts over time.

Find out More

Chapter 11 Filing

$2,500 Starting at
  •  Stop Lawsuits
  •  Stop Court Judgments
  •  Stop Bank Account Levies
  •  Stop Foreclosure
  •  Stop Creditor Harassment
  •  Stop Interest rates and Penalties on Credit Card Accounts
  •  Make reduced payments on debts
  •  Fresh Start without debt after end of 3-5 years
  •  Make reduced payments on debts
  •  Answer your telephone free of harassment
  •  Start building credit score
  •  Cramdown mortgage payments to present value
  •  Start getting life/business back together

Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most prominently used by corporate entities.

Find out More

33 DON’TS FOR PREPARING TO FILE BANKRUPTCY

  • Don’t fail to tell your attorney about your small business, sole proprietorship, partnership, LLC, LLP, LC, corporation, or hobby.
  • Don’t purchase a home shortly before filing bankruptcy without consulting your attorney.
  • Don’t give or gift property to anyone.
  • Don’t pay more than $600 on any past due bill.
  • Don’t transfer property to anyone.
  • Don’t cash out retirement plans or 401k’s.
  • Don’t take out a second mortgage.
  • Don’t gamble.
  • Don’t hide assets or debts.
  • Don’t take out ‘payday loans’.
  • Don’t put your money in your kids’ bank accounts.
  • Don’t leave out bank, checking, savings, brokerage, and credit union accounts.
  • Don’t use your credit cards.
  • Don’t take credit card cash advances.
  • Don’t use convenience checks.
  • Don’t pay money to family.
  • Don’t pay money to friends.
  • Don’t tell a creditor that you intend to pay.
  • Don’t leave assets off of your paperwork.
  • Don’t file if you are about to receive a tax refund or inheritance. Discuss the timing with your attorney.
  • Don’t omit or “save” a credit card for after your bankruptcy.
  • Don’t fail to list debt to family or other “insiders”.
  • Don’t write bad checks.
  • Don’t borrow money.
  • Don’t forget to tell your attorney about liens you may have on your home or unpaid judgments so they can be avoided.
  • Don’t make major financial decisions without talking to your attorney.
  • Don’t get married before filing if your spouse has a high income.
  • Don’t misrepresent facts to your attorney.
  • Don’t run up your credit cards in advance of filing bankruptcy.
  • Don’t fail to appear at state court hearings, trial or proceedings; coordinate with your attorney.
  • Don’t hide from your attorney.Keep her up-to date with your address, phone number and email address.

REQUEST A FREE CONSULTATION

Fill out the form below to receive a free and confidential initial consultation.