The Bankruptcy Code provides protection for individuals and businesses from creditors. You need a qualified attorney to determine whether you qualify for bankruptcy protection and which chapter under the Code could provide you with the most protection from your creditors: allowing you to discharge the most debt while keeping the most assets.
Once a bankruptcy petition is filed the Automatic Stay keeps creditors from proceeding with ANY collection activity including letters, calls and even foreclosure.
You can only file Chapter 7 once every 8 years. You must wait 6 years after filing Chapter 13.
Attorney fees for each case differ but usually run between $1500 to $3000, plus actual costs: Chapter 7 has a $335 filing fee plus you must pull a credit report and take 2 credit classes (approximately $100).
Once the Bankruptcy Petition is filed it usually takes between 4-6 months for the case to be closed and the debts to be discharged.
Generally tax debts, student loans and child support debts, among others, are not dischargeable.
A bankruptcy is reported on your credit report for up to 10 years.
You must be current on your income tax filings to file bankruptcy.
A Motion can be filed with the bankruptcy court to “avoid the lien” (sometimes called “Lien Stripping”).
A legal process whereby payments towards a debt owed by an individual can be paid by a third party – which holds money or property that is due to the individual – directly to the creditor. The third party in such a case is generally the individual’s employer and is known as the “garnishee”. Garnishments are typically used for debts such as unpaid taxes, monetary fines, judgments and child support payments.
The legal right of a creditor to sell the collateral property of a debtor who fails to meet the obligations of a loan contract. A lien exists, for example, when an individual takes out an automobile loan. The lien holder is the bank that grants the loan, and the lien is released when the loan is paid in full. Another type of lien is a mechanic’s lien, which can be attached to real property if the property owner fails to pay a contractor for services rendered. If the debtor never pays, the property can be auctioned off to pay the lien holder.