When deciding whether or not bankruptcy is right for you, understanding the bankruptcy process is important.
There are two different types of bankruptcy cases that are most commonly used to protect individuals that are in similar situations as yourself.
1. Chapter 7(getting to wipe away ALL your debts with no repayment back to creditors) .
2. Chapter 13 (getting to wipe away some portion of your debt but will also [pay a portion of what you owe to creditors)
When deciding which type of case to file and which type you actually are allowed to file based on your situation It begins with taking what is called ” the Means Test” to determine if you qualify for Chapter 7, or
If you are not eligible for Chapter 7, you will need to file a petition for Chapter 13,
How does the Chap 13 work? Its quite simple, ..You will have to see how much money you earn per month and look at your expenses,. the amount of money you have leftover after your expenses are all paid will be your monthly payment to the court for 3 to 5 years . the court will then distribute this amount to all all your creditors equally, and they can not pursue you any further for collection.
A bankruptcy lawyer at our office can administer the test, and guide you through the rest of the process at your initial consultation.
WHY WOULD I NOT QUALIFY FOR CHAPTER 7? Usually it is because you make more than $42,000 a year.
FIRST THINGS FIRST!
Before you can file your bankruptcy petition, you will need to complete a credit counseling class.
These classes are usually given over the phone or online.
Once the class is completed, your petition can be filed.
If you have filed for Chapter 7, you will need to appear in court for a meeting with your creditors (called a 341 meeting)
After the hearing, your non-exempt assets will be sold by a bankruptcy trustee, and any proceeds will be used to pay your creditors. Any remaining debts will be discharged (wiped away from your credit report and no further collection on the debts can ever be pursued against you)
AFTER YOUR CASE IS FILED IS THERE ANYTHING ELSE I NEED TO DO?
YES complete another class on financial management , AND turn over the following documents to the bankruptcy trustee assigned to handle your case.
1. Tax returns (Last 3 years)
2. Bank statements (last 3 months)
3. Your pay Stubs (Last 3 months)
Lawyers at JBI, INC. are highly skilled in bankruptcy law and have helped hundreds of clients through the bankruptcy process. We will prepare your petition, order your credit report, stop harassing creditors from contacting you and pursuing you. Stop lawsuits filed against you and garnishments that are coming out of your paycheck and being paid to creditors.
An attorney from our firm will also be present at your creditor meeting to aggressively defend your rights if you are filing for Chapter 7, or Chapter 13.