Bankruptcy Questions

For individuals facing bankruptcy questions, the financial stress and pressures from a potential bankruptcy proceeding is undoubtedly immense.  Not knowing where to turn for more information, due to the highly unique and individualized nature of every bankruptcy case for individuals and their families is common.  Fortunately, this article and more importantly, counsel with a bankruptcy attorney can help struggling people and their families make the best bankruptcy decision to remedy their current financial pressures in addition to closing as few future doors for individuals and families as well.  When bankruptcy questions are as numerous as your debts, a bankruptcy attorney is here to help. 

What type of bankruptcy is right for me?

If you are in need of legal assistance, consult with a Bankruptcy Attorney in your area to receive a free case review.

For individuals facing bankruptcy, Title 11 of the United States Bankruptcy Code contains four chapters of bankruptcy codes that directly or partially deal with personal bankruptcy proceedings.  These chapters are Chapter 7 bankruptcy, Chapter 11 bankruptcy, Chapter 12 bankruptcy, and Chapter 13 bankruptcy.

A cursory overview of the four potential chapters of personal bankruptcy filings include:

  • Chapter 7 Bankruptcy - Also known as Chapter 7 liquidation, this form allows debtors to discharge a sizable portion of their debts and retain personal property for the most part.  This form of bankruptcy generally stays on a person’s financial history for ten years and there a number of fiduciary responsibilities and debt obligations that cannot be discharged in Chapter 7 liquidation or straight bankruptcy.
  • Chapter 11 Bankruptcy - Although more commonly used by corporations and companies, individuals with secured debts of more than $1,010,650 or unsecured debt obligations of more than $336,900 can file for Chapter 11 reorganization.  A personal will face Federal Bankruptcy Courts and present a plan of reorganizing their debts, which will then be approved by all of their creditors by vote and potentially implemented.
  • Chapter 12 Bankruptcy - This form of personal bankruptcy is specifically intended for family farmers and fishermen and is rarely ever seen in the federal district courts.
  • Chapter 13 Bankruptcy - For individuals lacking the debt obligations to warrant Chapter 11 reorganization, Chapter 13 allows for debt reorganization under the supervision of the United States Federal Bankruptcy Courts under the supervision of a court-appointed bankruptcy case trustee.

In general, what are the potential future detrimental side-affects for filing bankruptcy?

Dependent on the unique circumstances surrounding your personal bankruptcy case and the state that the bankruptcy is filed, a bankruptcy attorney can work diligently to minimize the future fallout from a bankruptcy proceeding, while maximizing the amount of debt obligations discharged and assets preserved.  Typically, bankruptcy filings are public record and remain on one’s financial history for a period of ten years.  Additionally, an employer cannot take any negative action towards an employee stemming from your past bankruptcy filing.  IN some instances, debtors will be required by the bankruptcy courts to attend credit counseling courses, but in the future and under the guidance and approval of the court-appointed trustee, some persons in bankruptcy can once again obtain loans and other forms of credit.  .

If you are in need of legal assistance, consult with a Bankruptcy Attorney in your area to receive a free case review.

What assets of mine can I keep during a bankruptcy proceeding?

The answer to this question depends on the state and chapter of bankruptcy that individuals choose to pursue their bankruptcy filing.  Typically, however, there a large range of assets that one is allowed to retain during any form of personal bankruptcy proceeding.

The assets individuals can retain during any chapter of bankruptcy proceedings include:

  • Government benefits such as welfare awards, social security, or disability checks
  • Equipment, tools, or other items necessary top continue your employment
  • Retirement savings including some SIMPLE, IRA, and other accounts
  • Personal property, which includes a gamut of items that are usually capped within a reasonable amount and number to prevent fraud

Each state has their own unique exemption laws for assets, and the federal government also issues their own statutes in regards to this.  In some states, debtors have the option to choose between which entities rules they wish to follow.  Only a bankruptcy attorney can accurately detail all the assets that are protectable in your unique state.

What debts are dischargeable or non-dischargeable during my bankruptcy proceeding?

Depending on the chapter of bankruptcy individuals and their bankruptcy attorneys choose to file under and the state in which they file the bankruptcy claim, a large number of debts are dischargeable during a bankruptcy proceeding.  However, the Bankruptcy Abuse and Consumer Protection Act of 2005 has made the number of non-dischargeable debt obligations more stringent in the past. 

Some of the debts that are non-dischargeable during a bankruptcy proceeding includes:

  • Government student loan debts
  • Federal, state, and local back tax obligations
  • Child support or spousal support arrangements
  • Criminal court costs, fines, and fees

Some common debts that consumers face prior to filing bankruptcy that is dischargeable include:

  • Medical costs and bills
  • Credit card debt obligations
  • Some interest penalties and fines on defaulted mortgages or car loans
  • Consumer or store-specific credit card debts

Do you or your loved ones have bankruptcy questions that need to be answered immediately?  Contact a bankruptcy attorney to counsel you and your loved ones on any bankruptcy questions today.

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