With the economy in an unsure position due to the pandemic, you may feel even more financial stress than ever. If you are considering filing for bankruptcy, a Ringgold bankruptcy lawyer could help you navigate through the difficult and niche paperwork process. A filing for bankruptcy law firm could assess your financial standing, work to file the relevant paperwork, and plan for contingencies should the unexpected happen.
Many people live paycheck-to-paycheck, and our current emergency can push a stretched budget right over the edge. You may not realize that bankruptcy can immediately halt all those creditors’ calls and provide you with other crucial relief. If you are declaring bankruptcy, a law firm could help.
One of the first things a filing for bankruptcy lawyer could do is administer a government-mandated “means test” to determine the appropriate type of bankruptcy proceeding. Individuals will generally file either a Chapter 7 or Chapter 13 bankruptcy, depending on their income and debts.
For people looking to file Chapter 7 bankruptcy, the court appoints a trustee who will inventory assets and essentially sell what is necessary to pay the debt. In practice, there is rarely enough money in assets to pay all creditors. However, the debtor has no further obligations once they complete the process.
A Chapter 13 bankruptcy is considered a “reorganization.” In this scenario, the debtor keeps their property and agrees to a repayment plan to all creditors, generally over three to five years. A Ringgold bankruptcy lawyer can determine which process works based on a financial profile of the person in debt. A filing for bankruptcy law firm also provides other vital services, including a review of the debtor’s inventory of assets, debts, and income. They will submit the bankruptcy petition, attend creditor’s meetings, and explain the post-bankruptcy process once the court discharges all debt.
The most crucial part of any bankruptcy filing is the automatic stay that happens as soon as a declaring bankruptcy lawyer files a petition. By law, once a client files for bankruptcy, creditors must cease all collection efforts and communication. This can be an enormous relief to people suffering under serious debt. If a creditor continues with harassing phone calls, for instance, they violate federal law. Although there are “creditors’ meetings” during the proceedings, a declaring bankruptcy attorney could attend these with people, and creditors rarely show up.
In a Chapter 7 proceeding, a debtor essentially surrenders all property to pay debts. The law excludes some assets like a vehicle, wedding rings, tools for a trade, some personal property in a house, and perhaps a portion of the equity in a home. The trustee then sells assets and pays debts. Again, even if there is not enough money to pay creditors, bankruptcy does discharge all unsecured debts. Unsecured debts are those with no collateral attached, like medical and credit card bills, unpaid rent and utility bills, collection agency charges, business debts, and unsecured personal loans.
Certain debts are non-dischargeable, meaning the debtor remains responsible for payment. These include child support, alimony, unpaid taxes, student loans, court fines and penalties, and debts owed to government agencies. Even after the final notice of discharge of debts, an individual remains liable for repayment of these obligations. As it pertains to Chapter 13, the court does not discharge debts but creates a repayment plan. A bankruptcy attorney could explain in more detail what happens under both forms of bankruptcy filings.
Financial stress can cause conflict and confusion for you and your family. While helping you declare bankruptcy, a Ringgold bankruptcy lawyer could get you started on the road to financial recovery. As creditor harassment ceases, you will begin to see the light at the end of the tunnel. Aside from lifting this burden, a bankruptcy law firm can also provide advice around other forms of debt relief, debt management, and prospects for future credit. Call today to see what could be done for you.