What is Bankruptcy Questions for Attorney?
Bankruptcy is a legal process that allows individuals or businesses to eliminate or restructure their debts. It is designed to give a fresh start to those who are overwhelmed by debt and unable to pay their bills. There are different types of bankruptcy, including Chapter 7 and Chapter 13, which have different eligibility requirements and procedures.
What is Chapter 7 bankruptcy?
Chapter 7 bankruptcy, also known as “liquidation” bankruptcy, is the most common type of bankruptcy. It involves the sale of a debtor’s non-exempt assets by a court-appointed trustee in order to pay off creditors. In exchange for giving up certain assets, the debtor is allowed to discharge most unsecured debts, such as credit card debt and medical bills.
What is Chapter 13 bankruptcy?
Chapter 13 bankruptcy, also known as “reorganization” bankruptcy, allows individuals with a regular income to restructure their debts and pay them off over a period of three to five years. Unlike Chapter 7 bankruptcy, the debtor does not have to give up any assets, but must make regular payments to a court-appointed trustee in order to pay off their debts.
What are the eligibility requirements for bankruptcy?
To file for Chapter 7 bankruptcy, individuals must pass a means test that compares their income to the median income in their state. If their income is below the median, they are eligible to file. If their income is above the median, they may still be eligible if they can demonstrate that they do not have enough disposable income to pay off their debts.
To file for Chapter 13 bankruptcy, individuals must have a regular income and their unsecured debts must be below a certain amount. They must also have completed credit counseling within the six months prior to filing.
What are the advantages and disadvantages of bankruptcy?
- Discharge of most unsecured debts
- Protection from creditor harassment and lawsuits
- Opportunity for a fresh financial start
- Impact on credit score and ability to obtain credit in the future
- Possible loss of assets in Chapter 7 bankruptcy
- Requirement to make regular payments in Chapter 13 bankruptcy
- Possible stigma associated with filing for Bankruptcy Questions for Attorney
What is the process for filing Bankruptcy Questions for Attorney?
The process for filing Bankruptcy Questions for Attorney involves several steps, including:
- Gathering financial information and completing credit counseling
- Filing a petition for bankruptcy with the court
- Attending a meeting of creditors
- Completing a debtor education course
- Receiving a discharge of debts (in Chapter 7) or completing a payment plan (in Chapter 13)
Can bankruptcy stop a foreclosure?
Yes, filing for Bankruptcy Questions for Attorney can stop a foreclosure. When an individual files for bankruptcy, an automatic stay goes into effect, which stops most collection actions, including foreclosure proceedings. However, the stay is temporary and the lender may be able to seek relief from the stay in order to continue with the foreclosure process.
Will bankruptcy affect my credit score?
Yes, filing for bankruptcy will have a negative impact on your credit score. Bankruptcy can remain on your credit report for up to ten years, and may make it more difficult to obtain credit in the future. However, rebuilding your credit is possible with time and effort.
Can I keep my car in bankruptcy?
It depends on the type of bankruptcy and the equity in your car. In Chapter 7 bankruptcy, you may be able to keep your car if you are current on your payments and the equity in your car is within the exemption limit. In Chapter 13 bankruptcy, you can usually keep your car by including the car payments in your payment plan.
Will I lose my retirement savings in bankruptcy?
It depends on the types of Bankruptcy Questions for Attorney and the laws in your state. In general, retirement savings such as 401(k)s and IRAs are protected in bankruptcy and cannot be used to pay off creditors. However, other types of retirement savings may not be protected and could be used to pay off debts.