If you have debts that cannot be repaid and believe that filing for bankruptcy may be the best option, let the attorneys of Wipe Away Debts offer you the skill and experience needed for quality legal representation. Those seeking to file for bankruptcy typically have two pathways in front of them: chapter 7 and chapter 13. Regardless of which direction you choose, our attorneys can be highly beneficial throughout the entire bankruptcy process.
When someone is considering filing for bankruptcy, they need to ask themselves two immediate questions. First, will filing benefit their unique financial situation? Depending on the kind of debt that you possess, bankruptcy may not discharge it; recent car purchases, income taxes, penalties issued by the government, student loans, alimony and child support payments cannot be released. If these are the sources of your debt, it may not be the best option to file. In this case, getting in contact with creditors to set up repayment plans would be a better course of action.
Assuming that filing is the right option for you, the next consideration is the type of bankruptcy to file. Many Americans qualify for chapter 13 bankruptcy, which allows debtors to repay their debts over the span of 3-5 years. Chapter 13 offers some specific benefits, including the ability to avoid foreclosures and make up for missed payments. However, not everyone qualifies for chapter 13 and the repayment process can be lengthy.
The most popular bankruptcy option in America is chapter 7. If someone tells you they are filing for bankruptcy; they are usually describing chapter 7. It is the most common choice for filing because it’s faster, simpler and the qualifications for income are much lower. In fact, if you bring in more than the household median for your area, you will not be eligible to file chapter 7. This is determined through the “means test,” which measures your level of debt against your monthly household income. If you have the obligation that would take over five years to repay in any reasonable circumstance and minimal household income, it is very likely that you will be eligible for chapter 7, rather than chapter 13.
Chapter 7 is a relatively simple and efficient form of bankruptcy, but there are some realities to consider. Chapter 7 liquidates your assets, which may be sold to repay your debts at any time. Some assets may be exempted – each state has a specific list of options for non-exempt property designation. But if you file chapter 7, a non-exempt property may be at risk. This includes homes, as chapter 7 does not protect from foreclosure. It does, however, offer automatic stay, which keeps creditors from contacting you throughout the bankruptcy process.
Next, one needs to ask themselves: do I need a lawyer? Though chapter 7 filing is a shorter and more straightforward process than chapter 13, it is highly discouraged that one proceeds without legal representation. Filings made without the input of a chapter 7 bankruptcy attorney are not recommended, as they face far lower chances of success than those performed with the help of an attorney. In fact, they may be rejected outright for the smallest of errors.
There are some reasons why an individual chapter 7 filing can be rejected, most of which take place early in the process of filling out paperwork. There are many documents necessary to the filing process that is often mistakenly left out if an attorney is not present, and these errors will almost certainly lead to a rejected filing. Another key component of filing bankruptcy is education courses in credit counseling. If a certificate from this program is not filed, everything can be brought to a halt. Filings can also be rejected for miscellaneous clerical errors or illegible handwriting.
Despite the potential obstacle of legal fees, which can sometimes be financed, hiring legal representation is a virtual necessity to the filing process for all of these reasons. Chapter 7 attorneys can offer advice, handle paperwork and serve to represent you in the event that a creditor may not want to discharge your debt. While somewhat uncommon, discharging certain debts may involve motions or adversary actions that complicate the process. Further, individuals may not be aware of how to sufficiently exempt their property; an attorney can help you retain the property that is rightfully yours.
If you have considered the available options and choose to seek legal representation throughout the bankruptcy process, let the Los Angeles chapter 7 attorneys of Wipe Away Debts help. They have the skill and experience you need to guide you on your way to a new life free of debt.