Bankruptcy
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If you are struggling with financial issues such as being behind on your house or car payment, garnishments, threat of repossession, etc., we want the opportunity to meet you, to give you the facts about your case, your rights and the law. You deserve an experienced attorney working on your case. It is our mission to help clients through difficult times by providing outstanding legal representation and compassionate service.
Our firm has been serving the Memphis, Tennessee community for over twenty years in the bankruptcy arena, helping families and individuals in need of a "fresh start" because of financial problems. We have the knowledge and the experience necessary to counsel individuals regarding debt consolidation under the United States bankruptcy laws.
Bankruptcy is a federal law designed to give people who have fallen into financial difficulty a chance to start over. People who have fallen behind in their debts due to medical emergencies, loss of a job, loss of a loved one, on the job injuries, or simply living above their means may be candidates for the fresh start afforded them by the federal bankruptcy laws.
Under the United States Bankruptcy Code, there are two types of bankruptcies for individual debtors. Chapter 7 involves a "fresh start" through getting rid of unsecured debt like credit card bills and medical bills. If qualified under Chapter 7 and state exemptions, you can get rid of all unsecured debt and keep your house, car and other property. Chapter 13 bankruptcy (also known as "wage earner") involves consolidating your debts and paying your unsecured creditors back over a period of three to five years without interest and at a payment you can afford.
Chapter 7 Bankruptcy
A Chapter 7 bankruptcy is a powerful tool, capable of wiping out unsecured debt entirely. Medical bills, credit cards, and civil judgments are a few items that may be entirely wiped out in a Chapter 7 bankruptcy. This means that the person filing the Chapter 7 bankruptcy will not be required to pay back those types of unsecured creditors.
Because of the Chapter 7 bankruptcy's power to wipe out debt entirely, it is reserved for persons who qualify. A person most likely to benefit from a Chapter 7 bankruptcy is one who has a lot of unsecured debt, such as medical bills following a long illness, or a lot of credit card debt. However, a debtor who has a lot of equity in real property or secured goods, such as automobiles, boats, furniture, appliances, and electronics should consider a Chapter 13 bankruptcy.
When considering whether or not you qualify for a Chapter 7 bankruptcy, your attorney will be interested in knowing information such as:
. The total amount of debt owed to creditors
. The total value of all personal belongings and real property
. An accurate estimate of monthly expenses
. An accurate estimate of monthly income, including your spouse if married
. The status of any mortgage
. All monthly payments made on secured debts
. All interests in any real property, time share property, etc. other than your residence
Chapter 13 Bankruptcy
The Chapter 13 bankruptcy (also known as "wage earner") is designed to assist a person in paying back his creditors through a monthly payment plan drafted by the debtor and his attorney. It can be thought of as a five-year plan to get out of debt.
Under a Chapter 13 bankruptcy, a person who has income left over at the end of the month (after having paid his living expenses) has a payment plan through which money from each paycheck is deducted from his wages and paid to the bankruptcy Trustee, who will then pay the debtor's creditors each month. A certain amount of money from the plan payment is designated for paying back each creditor listed in the debtor's bankruptcy petition over a period of three to five years at a payment he can afford.
Mortgages under Chapter 13 Bankruptcy
Perhaps the most powerful aspect of the Chapter 13 bankruptcy is the ability to stop a foreclosure of a house, or to help people catch up on their house note when they fall too far behind. If a debtor is behind on his mortgage, a Chapter 13 bankruptcy can prevent the mortgage company from foreclosing on (selling) the house by financing the payment of the mortgage arrearage over the course of the bankruptcy plan so that the debtor can stay in the house.
Automobiles under Chapter 13 Bankruptcy
An automobile that is behind on payments is subject to repossession and sale. In fact, once the automobile is sold, the debtor may still have to pay car payments on the vehicle, even though he no longer has the car in his possession. A Chapter 13 bankruptcy can help a debtor KEEP a vehicle even if he is behind in payments and in some circumstances can help the debtor get a vehicle back from a creditor who has already repossessed the vehicle.
In addition to preventing the repossession and sale of a vehicle, a Chapter 13 bankruptcy can help to lower the monthly payments of an automobile note. For example, the note on a car valued at $5,000 and a monthly note of $350 could possibly be restructured to give the debtor a much lower and affordable payment.
Credit Card Debt under Chapter 13 Bankruptcy
Unsecured creditors, such as credit card companies, medical providers, and utility companies under a Chapter 13 bankruptcy are not treated the same as they are in a Chapter 7 bankruptcy. This means that a debtor cannot wipe out unsecured debt entirely under the Chapter 13 bankruptcy. However, unsecured debt in a Chapter 13 bankruptcy can possibly be paid back at less than l00% of what the creditors are owed. Creditors under a Chapter 13 bankruptcy might be paid back 100% of their debt or as little as 10% or in some cases even less.
The most important thing to know is that unsecured creditors receive NO INTEREST on the debts they are owed, so that the amount you owe on your credit cards or medical bills on the date you file your bankruptcy is the largest amount that the unsecured creditor will be entitled to be paid back. Interest will not continue to accrue on those debts as long as you remain in your Chapter 13 bankruptcy plan. Without filing a Chapter 13 bankruptcy, the monthly payments you struggle to make each month to your credit card companies hardly make a dent in the amount you owe them. Most of your payment goes to pay the interest on the outstanding debt or late charges. Under Chapter 13 bankruptcy, you are assured that the completion of your bankruptcy plan, you will no longer owe these unsecured debts.
In short, the Chapter 13 bankruptcy is a tool that helps to consolidate debts and pay them back over a period of time at a payment plan you can afford and on your own terms...not the terms of your creditors.
We are a debt relief agency. This firm helps people file for bankruptcy relief under the bankruptcy code. |
