Bankruptcy is a time-honored practice. Your right to bankruptcy relief is enshrined in Article I, Section 8 of the U.S. Constitution. The fundamental goal of the bankruptcy system is to give debtors a financial “fresh start” and relief from burdensome debts. Bankruptcy is a powerful tool for many people. However, bankruptcy is complicated and may cause other problems and is best undertaken with the help of an experienced attorney.
- Bankruptcy Frequently Asked Questions
- Bankruptcy Pros and Cons
- Common Types of Bankruptcy Proceedings
- Chapter 7: Chapter 7 bankruptcy is the most common type of bankruptcy. Chapter 7 involves “liquidation.” This means that the Bankruptcy Court will appoint a trustee to review all of your assets to determine whether any assets may be sold. If any assets are sold, the trustee divides the money between your creditors. However, there are protections in the bankruptcy system called “exemptions”, which exempt many items from being sold. For more information detailed information about Chapter 7 bankruptcy, please refer to our page about Chapter 7.
- Chapter 13: Chapter 13 bankruptcy is a debt reorganization involving a payment plan. There is no liquidation of assets. Instead, you propose a payment plan to the Bankruptcy Court, whereby you agree to repay all or part of your debts. The plan must be approved by the Bankruptcy Court. To be approved, the plan must meet certain legal standards about the amount of the payments. Chapter 13 payment plans must be between three and five years long. For more detailed information about Chapter 13 bankruptcy, please refer to our page about Chapter 13.
- Chapter 12: Chapter 12 cases are similar to Chapter 13, but are reserved for family farmers and fishermen. For more information about Chapter 12 bankruptcy, please refer to our page about Chapter 12.
- Bankruptcy Hearing: the Meeting of Creditors
- Bankruptcy Trustee
- Bankruptcy Help Videos
- Bankruptcy and Your Credit
- Life After Bankruptcy
- Bankruptcy Classes
- Client Data Entry Portal
- Bankruptcy Disclosures
NOTICE: Brian T. Hemphill, P.C., is a debt relief agency helping people to file for bankruptcy relief under the Bankruptcy Code.
Further Information About Bankruptcy:
First, bankruptcy cannot support you in the future, so if nothing has changed from what brought you to this financial situation, a bankruptcy will not help over the long term. Bankruptcy only works in conjunction with a long term plan to succeed.
Second, bankruptcy will not eliminate many obligations, notably those arising from student loans, recent tax obligations, governmental fines, and those arising from fraud or theft. Sometimes it can help indirectly, as eliminating substantial credit card and/or medical debt might free up your paycheck to pay the taxes or student loans.
Third, bankruptcy is often not a good choice for those with substantial assets, as the law requires that assets other than those considered essential to the debtor (some equity in a home, some equity in a motor vehicle, typical retirement assets, and normal home furnishings are the most typical) be liquidated to allow the discharge of debts.
Fourth, high income-earners are denied the opportunity to discharge debts without making payments on at least a portion of the debts over a period of time.
However, for many who simply do not have the income to meet their current debt obligations, bankruptcy is the best answer.
The first step is a frank discussion of your current situation, and determination of whether bankruptcy is the best option for you. If not, we will discuss how to improve your situation another way.
If bankruptcy is the answer, we will discuss what steps need to be taken to put us in a position to file the petition for you, and how the petition will (1) Damage your credit (but allow you to start rebuilding it); (2) Discharge your debts; (3) Affect your assets; and (4) Change your monthly budget.
Either way, you will leave the consultation with a solid plan for improving your financial future.
Further articles about bankruptcy below: