Bankruptcy that best suits your situation depends on the amount of your debt and if it is secured, unsecured, or if it can be discharged. We will inform you when other debt solutions are adequate and if you can avoid bankruptcy.
We understand that when it comes to your personal finances, it may be hard to trust someone. We are dedicated to relieving the burden of devastating debt, and will help you through this process step by step.
Four Ways Bankruptcy Can Help You
- Eliminate certain debts. Bankruptcy may allow you to wipe out unsecured debts, and some taxes. Student loans typically cannot be discharged, except in cases of extreme hardship. Secured debts, like car loans or mortgages (not including certain underwater mortgages) are not eliminated, however, past due payments may be restructured to let the borrower catch up.
- Stop aggressive debt collectors. When you file, you become protected by the “automatic stay,” which stops most collection actions against you. This can give you breathing room while you get back on your feet.
- Avoid taxes on canceled debt. If you don’t pay back some of your debt, the creditor may be required to send you a 1099-C reporting this “cancelled” debt as income. This can result in a tax headache for you in future years. But debts discharged in bankruptcy are not considered taxable income, so it’s one less thing you have to worry about.
- Allow you to keep protected property. Most of the time, savings in your qualified retirement plans are safe from creditors. In addition, in every state there is a list of exemptions — property you get to keep. There are also federal exemptions you may be able to choose in certain states.
Chapter 7
A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor’s nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code.
Chapter 11
Some benefits of Chapter 11 bankruptcy include: The business can continue to operate while paying off debts. Chapter 11 bankruptcy lets debtors partially pay back unsecured debts. The automatic stay gives you freedom from harassing creditors contacting you at home or at your business.
Chapter 13
A chapter 13 bankruptcy is also called a wage earner’s plan. It enables individuals with regular income to develop a plan to repay all or part of their debts.