Know How Bankruptcy Works Before You File
Mitchell & Cunningham, P.C. is here to guide you through every part of the process, from presenting your best options, to standing by your side through all legal processes. We will make sure your debt is handled the best way possible.
We will guide you through every step of the bankruptcy process:
• Reviewing your financial situation to determine if bankruptcy is the right option.
• Completing the required credit counseling course completing the means test
• Deciding if Chapter 7 or Chapter 13 offers the most benefit for you.
• Gathering all necessary financial documents, including tax info, bills, and pay stubs.
• Completing the required paperwork needed to file for bankruptcy.
• Determining a proper payment plan, if filing for Chapter 13.
• Filing the paperwork with the courts.
• Addressing any concerns throughout the process.
• Ensuring you receive your discharge and all the benefits that accompany it.
Most bankruptcies filed in the Unites States are either Chapter 7 or Chapter 13 cases.
Whether a Chapter 7 or Chapter 13 bankruptcy is the right choice for you depends on your income, assets, debts, and your financial goals.
Chapter 7 Bankruptcy
Chapter 7 is a liquidation bankruptcy designed to wipe out your general unsecured debts such as credit cards and medical bills.
To qualify for Chapter 7 bankruptcy, you must have little or no disposable income. If you make too much money, you may be required to file a Chapter 13 bankruptcy (discussed below).
When you file for Chapter 7 bankruptcy, a trustee is appointed to administer your case. In addition to reviewing your bankruptcy papers and supporting documents, the Chapter 7 trustee’s job is to sell your nonexempt property to pay back your creditors.
If you don’t have any nonexempt assets, your creditors receive nothing. As a result, Chapter 7 bankruptcy is typically for low income debtors with little or no assets who want to get rid of their unsecured debts.
Chapter 13 Bankruptcy
Chapter 13 is a reorganization bankruptcy designed for debtors with regular income who can pay back at least a portion of their debts through a repayment plan.
If you make too much money to qualify for Chapter 7 bankruptcy, you may have no choice but to file a Chapter 13 case.
However, many debtors choose to file for Chapter 13 bankruptcy because it offers many benefits that Chapter 7 bankruptcy does not (such as the ability to catch up on missed mortgage payments or strip wholly unsecured junior liens from your house).
In Chapter 13 bankruptcy, you get to keep all of your property (including nonexempt assets).
In exchange, you pay back all or a portion of your debts through a repayment plan (the amount you must pay back depends on your income, expenses, and types of debt).
For this reason, Chapter 13 is commonly referred to as a reorganization bankruptcy.
Typically, Chapter 13 bankruptcy is for debtors who can afford to make monthly payments to get caught up on missed mortgage or car payments or pay off nondischargeable debts such as alimony or child support arrears.
Plan Your Financial Future with an Experienced Debt Relief Attorney. The bankruptcy process can actually be highly beneficial to individuals, families, and business owners who have fallen on hard times.
Under a Chapter 7 or Chapter 13 bankruptcy, your unsecured debts may be discharged, providing relief from the overwhelming debt that has plagued you for far too long.