For those who have reached a point where paying off financial obligations including, but not limited to medical bills and credit card debt, and meeting other obligations seems impossible, it may be time to consider what bankruptcy can do to get you back on track. Filing for a Chapter 7 bankruptcy could be the best way for you to get the fresh start you need. Our New Milford, Connecticut bankruptcy attorney has the answers to your questions.
Why File Chapter 7 Bankruptcy?
Filing Chapter 7 bankruptcy will enable you to obtain discharge of debts which include hospital bills, credit card bills, payday loans, and lawsuit judgements. At Allingham, Readyoff & Henry, LLC, we are dedicated to helping our clients get the financial relief they need through the bankruptcy process. Our skilled Bankruptcy Attorney, Gregory S. Jones has 30 years of experience in bankruptcy law. Built on that experience, our firm proudly serves clients in Western Connecticut, helping them rebuild their financial lives. Contact us today for a free consultation, to determine if you qualify for Chapter 7 bankruptcy and to learn about the timeline involved in the process.
Who Can Qualify for Chapter 7 Bankruptcy?
Under current bankruptcy laws, you must pass a means test to file Chapter 7 bankruptcy. This means that if your present monthly income is below the State adjusted mean income, you are permitted to file Chapter 7 bankruptcy. If your income is over the adjusted median income, you may be able to file after expenses such as retirement plan contributions and care payments are deducted from your income. If you do not qualify for Chapter 7 bankruptcy, you may still be able to achieve the debt relief you are looking for by filing Chapter 13 bankruptcy.
Certain debts may not be discharged in Chapter 7 bankruptcy, including taxes and debts that are secured by property, including your home, car, and child support payment. You will be able to keep assets such as your home and car by making payments and/or filing a reaffirmation agreement with the court.
Will I Lose My Assets by Filing Chapter 7 Bankruptcy?
Clients often worry about the assets they will lose if they file bankruptcy. Chapter 7 bankruptcy is often called a "liquidation" bankruptcy because the bankruptcy trustee is able to seize assets to pay your debts. Certain property however is exempt from seizure under state or federal law. As your bankruptcy lawyer, we will work to use exemptions to help you retain important assets.
Are There Additinal Benefits of Chapter 7?
Yes. Filing Chapter 7 bankruptcy eliminates unsecured debt and immediately puts a stop to the following:
- Creditor harassment
- Wage garnishment
- Home foreclosure
Chapter 7 Bankruptcy vs. Chapter 13 Bankruptcy
At the Law Firm of Allingham, Readyoff & Henry, LLC we often receive calls from people asking about the difference between Chapter 7 and Chapter 13 bankruptcy. Both are designed to provide debt relief for people who are burdened by personal debt and are seeking a fresh start.
Chapter 7 Bankruptcy
This is a way to eliminate most or all of your unsecured and secured consumer debt. The reason we say "most" is because some type of debt are unable to be erased by Chapter 7. Student loans for example, and most other loans backed by the government are not permitted to be discharged. After specific conditions are met, state and federal tax debt qualify for discharge under Chapter 7.
In addition, a person filing can claim one personal residence as exempt from discharge. If you "reaffirm" that you are willing to repay the mortgage loan, you can likely keep your house. You may also be able to reaffirm your debt of a car loan.
Of course, your creditors will fight to prevent a total discharge of your debts. A bankruptcy court will decide which debts will be erased and which must be repaid under terms that are supervised by the courts.
Will You Qualify for Chapter 7 Bankruptcy?
Under the Bankruptcy Reform Act of 2005, all petitioners for Chapter 7 debt elimination are subject to a means test to determine whether their debt to assets ration qualifies them for Chapter 7. The means test is complex and an experienced bankruptcy lawyer is an important part of making sure your income and debt are accurately applied to give you the most advantage.
Chapter 13 Bankruptcy
Chapter 13 is a debt-restructure option. It is a good option for people who do not meet the government's Chapter 7 means test, or who do not wish to discharge all of their debts. The good news is that everyone qualifies for Chapter 13 bankruptcy, and all types of debt may be included. Under Chapter 13, you will submit a proposed debt restructuring plan that can save you thousands of dollars in interest payments. If the creditors accept the restructure plan, the courts will supervise the repayment schedule. Student loans, SBA loans and all other debt may be included in the debt restructure. As with Chapter 7, you may avoid foreclosure and repossession and may choose to exempt your mortgage and some other debts from the plan.
For answers to all of your questions about Chapter 7 and Chapter 13 bankruptcy, talk to an experienced debt relief attorney at the Law Firm of Allingham, Readyoff & Henry, LLC. We will explain the bankruptcy process and what your life will be like after bankruptcy.
Call today for a free bankruptcy consultation. We are a debt relief law firm representing individuals and small businesses throughout the State of Connecticut.