What Is Consumer Bankruptcy?
Written by Robert DeMarco
So you’re considering bankruptcy? Chances are, you have done a lot of research, and you have a lot of questions. And that’s perfectly normal – bankruptcy is a big decision, and it can be hard to know what’s right for you. In this blog post, we’ll look at what consumer bankruptcy is and some of the things you need to think about if you’re thinking about filing. We’ll also talk about the different types of bankruptcy available to consumers. So if you’re curious about consumer bankruptcy, keep reading!
What is Chapter 7 Bankruptcy?
This type of legal procedure allows individuals to discharge all their debts that can be legally discharged. There are rules regarding who qualifies, how you file for it, and what types of debt will not immediately disappear after filing!
To qualify for a Chapter 7 bankruptcy filing, your income must be equal to or below the median amount in that state. Each individual’s circumstances are different, and if you have more than what would allow repayment on debts, we can help make sure it is used constructively by applying certain rules based on recent 6 months worth of earnings (means test).
When an individual files for Chapter 7 bankruptcy, the court will issue them an automatic stay. At the same time, they’re under this order which lasts until their case has been dismissed or resolved in favor of the brewmaster (the person who filed). This action prevents creditors from collecting debts, and any pending lawsuits or wage garnishments are frozen.
The process of bankruptcy is designed to help people who are financially struggling. It involves taking most, if not all, their property and giving it over to a trustee for them to make sure that creditors will get paid back before any more money goes out from an account or loans to continue being taken up on interest rates higher than what’s available elsewhere which can result with fees added onto those original balances due just because you’re unable at this point so determine whether selling off assets such as homes would produce enough cash flow where said borrowing power doesn’t need extra support beyond what already exists within. Consumer bankruptcy proceedings usually take around 4-6 months.
When the bankruptcy court meets, they will discharge all unsecured debts. This means that your car loan or mortgage might receive different treatment than other regular credit cards and loans you had before, but at first glance, it seems like these types of Debts can still get discharged in bankruptcy depending on how hard-to pay them off before filing! You should pay the creditor what they are owed or return it to them. If you cannot do either of these two things, then talk through some other options with your credit provider before making a decision that you may regret later!
When a person files for bankruptcy, they cannot include certain debts in their list of dischargeable items. These types include child support and taxes and any student loans determined by a court hearing that has taken place after the process is complete with no success so far on repayment efforts made since filing bailout bankruptcy. Consumer bankruptcy attorneys can help individuals determine which debts will be discharged and which will remain following the proceedings.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a different type of legal proceeding that helps people who have regular income to repay some or all of their debts over time. This type of bankruptcy can be helpful for people who want to keep their property, such as a car or home, but can’t afford to repay their debts in full.
To qualify for a Chapter 13 bankruptcy filing, you must meet the following requirements:
- You are an individual or married couple, including if you have unincorporated business interests;
- Your total secured debts reach up to $1,184 200 but don’t exceed that figure by more than 20%.
- There should be no dismissals within 180 days of applying due nonappearance at court hearing SSN required when completing paperwork and proof that you reside or have resided in the state for at least 90 days
- You should have regular income from a job or other sources, such as Social Security, disability, or retirement benefits
The requirements for a Chapter 13 bankruptcy case differ from those in chapter 7. The borrower has to keep most of their assets, and they’re still required to make payments on what’s left, but there is an extended period where the credit will be affected by this type of proceeding (ten years). During plan development, you must consider all aspects, including how much time debtors might need before getting back into good standing again with creditors after filing. This could affect whether or not someone chooses one form over another based solely on practicality without considering other factors.
The Difference Between Exempt & Non-exempt Property
The best way to understand the difference between exempt and nonexempt property in bankruptcy cases is by looking at what type of assets each category includes. Exempt properties can’t be claimed as repayment for debts from creditors, so these items didn’t need any further description or definition; however, other types may vary between states, meaning their specific contents will depend on where you live. Nonexempt properties can be seized and sold by the trustee appointed in a particular case to repay some or all of the filer’s debts.
The individual in this situation will be required to give up some of their property to satisfy creditors. This could include anything from jewelry, furniture, or even books!
Property that is exempt from taxation includes:
Some vehicles up to a certain value; Jewelry, furniture, and household appliances. Tools of the individual’s trade are also considered exempt if necessary for their business or profession (and they meet certain criteria). There must be no intention on part behalf saving this asset from paying taxes-it will always remain an income source! Some unpaid earned wages may be held onto without penalty until social security payments come due because these benefits are considered a form of payment.
Property typically Includes:
Property such as antiques or coin collections is not common stock/bonds but unique items with personal meaning to you. Fund accounts where money has been set aside for specific purposes like retirement funds do not get taken away through debts after spending time building up savings. Cash on hand at any given moment unless it’s already committed elsewhere by law- then it becomes part of the nonexempt category instead! Motor vehicles, including second cars and other motorized quickest.
What Should You Bring to Your Bankruptcy Lawyer?
Some individuals might be tempted to try and handle their bankruptcy case on their own to save on legal fees. This is not a wise decision for a number of reasons, the least of which is that doing so could result in penalties and even more debt. A better option would be to find competent legal representation from the start- and this is something you should discuss with your bankruptcy lawyer.
What to bring to your appointment:
- Your most recent credit report
- A list of all creditors, including contact information and account numbers
- Proof of income for the last 6 months
- Documentation of any assets or real estate you own
- A copy of your driver’s license or another form of photo identification
- Your social security card
- A check for the initial consultation fee, if applicable.
If you’re considering bankruptcy as an option, it’s important to understand what this process entails and the different types of fillings that are available to you. Working with a qualified lawyer will help ensure that you make the best decision for your particular situation and that all the necessary paperwork is filed correctly. Bankruptcy can provide a fresh start for consumers who are struggling to repay their debts- but it’s important to understand all the implications involved before making a final decision.
Consumer Bankruptcy Lawyer in Plano, Texas
Consumer bankruptcy is a legal process that allows individuals to get a fresh start by relieving them of most of their unsecured debt. This article aimed to provide an overview of consumer bankruptcy and the different types available. If you are considering filing for bankruptcy, it is important to consult with an experienced attorney who can help you navigate the process and determine which type of bankruptcy is best for you. DeMarco Mitchell, PLLC in Plano, Texas, specializes in consumer bankruptcies and would be happy to assist you. Give us a call today at (972) 578-1400 for a free consultation.
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