How A Bankruptcy Attorney Can Help
The right bankruptcy lawyer will know how to navigate the bankruptcy process efficiently, which prevents delays whenever possible. If complications do arise, your attorney should know how to address them to get your bankruptcy back on track.
Because bankruptcy cases do take time, you should not hesitate to discuss a possible case with an Arizona bankruptcy attorney. The sooner you start the process, the sooner you can take back control of your finances. At Yusufov Law Firm, we strive for the swiftest resolution to each case to best protect our clients interests.
The Benefits Of Filing Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows you to erase overwhelming debt and get a fresh start managing your finances. It can relieve you of the responsibility to repay your creditors and eliminate most or all your current debt. This option is designed to give debtors a clean financial slate.
A critical benefit of filing bankruptcy is that all debt collection efforts must stop as soon as you file. This benefit can provide relief from demanding letters and phone calls that only add stress to an already challenging financial situation.
Another advantage of Chapter 7 bankruptcy is that it does not require you to file a repayment plan. Instead, you are allowed to retain your assets, and the courts discharge all your qualifying debts.
The Extended Automatic Discharge
Individuals who have never filed for bankruptcy before will spend a total of twenty-one months in bankruptcy if they are required to pay surplus income to their bankruptcy trustee. If this is your second bankruptcy, your time in bankruptcy protection is automatically twenty-four months, and it will be extended to thirty-six months if you are required to pay a surplus income.
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Most Chapter 7 Cases Last Between Four And Five Months But There Are Exceptions
When compared to many other legal matters, a Chapter 7 bankruptcy is a relatively quick process. As a general rule, you should expect your case to last approximately four to five months. This timeline, however, varies depending on where you live and where you file your case. In addition, several things may occur during your case that will extend the length of your Chapter 7 bankruptcy.
Does The Debtor Have The Right To A Discharge Or Can Creditors Object To The Discharge
In chapter 7 cases, the debtor does not have an absolute right to a discharge. An objection to the debtor’s discharge may be filed by a creditor, by the trustee in the case, or by the U.S. trustee. Creditors receive a notice shortly after the case is filed that sets forth much important information, including the deadline for objecting to the discharge. To object to the debtor’s discharge, a creditor must file a complaint in the bankruptcy court before the deadline set out in the notice. Filing a complaint starts a lawsuit referred to in bankruptcy as an “adversary proceeding.”
The court may deny a chapter 7 discharge for any of the reasons described in section 727 of the Bankruptcy Code, including failure to provide requested tax documents failure to complete a course on personal financial management transfer or concealment of property with intent to hinder, delay, or defraud creditors destruction or concealment of books or records perjury and other fraudulent acts failure to account for the loss of assets violation of a court order or an earlier discharge in an earlier case commenced within certain time frames before the date the petition was filed. If the issue of the debtor’s right to a discharge goes to trial, the objecting party has the burden of proving all the facts essential to the objection.
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How Long Does It Take To File Bankruptcy: Chapter 13
Chapter 13 bankruptcy takes longer to complete than Chapter 7 bankruptcy. This is because the court needs to arrange a monthly repayment before issuing a discharge. The process may take up to five years to complete.
The best thing about Chapter 13 is that the court will set, a payment schedule and you will also have a finishing date. The court will create a payment schedule and that is also the time you will have a finishing date. Like Chapter 7 bankruptcy, Chapter 13 will leave a negative mark on your credit report for 7 years.
Regardless how long it takes to complete your filing, both file types leave a credit damage.
Proofs Of Claim From Unsecured Creditors: 90 Days After The Meeting Of Creditors
Within 90 days of the meeting of creditors, any unsecured creditors must file a Proof of Claim with the court if they wish to participate in distributions from the bankruptcy estate. These documents will include information on the amount owed and the basis for the claim.
For example, a collections agency may file a Proof of Claim for surgery that was not covered by your insurance. The agency will need to include the amount still owed and proof that you were the one who incurred the debt.
You and your attorney can object to a creditorâs claim by arguing that the paperwork was not submitted correctly, the amount of the claim is incorrect, or the claim was made with the purpose of harassing you.
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Can A Judge Turn Down A Bankruptcy Petition
A judge may decide that you have enough income or assets to repay your debts under Chapter 13 rather than eliminate your debts under Chapter 7. The judge may dismiss your Chapter 7 bankruptcy case in the following cases:
- If you are not eligible for Chapter 7 bankruptcy relief AND do not convert to Chapter 13, or
- If you do not qualify for bankruptcy relief due to a previous case being dismissed. 11 U.S.C. § 707
- You received a discharge under Chapter 7 within 8 years prior to the date of filing your new Chapter 7 case. 11 U.S.C. § 727
A trustee is assigned to each bankruptcy case and will determine if you can pay back some of the debt that you owe.
What Is Student Loan Bankruptcy
You may have heard that student loans cannot be discharged in bankruptcy. That statement oversimplifies the truth. You actually can get student loans discharged in some cases, but the bar is higher, and the process is more burdensome than it is for other types of debt.
Filing for bankruptcy to discharge student loans may get easier, though, if a recently introduced bipartisan bill is passed. The Fresh Start Through Bankruptcy Act of 2021, by Senators Dick Durbin and John Cornyn , would restore the ability for struggling borrowers with federal student loans to seek a bankruptcy discharge for their loans 10 years after the first loan payment comes due.
It would also make it possible to retain the existing undue hardship discharge option for private student loans and for federal student loans that have been due for fewer than 10 years.
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Speak With A Professional
The U.S. Bankruptcy Court strongly suggests that those filing get an attorney. Court officials, including judges, are barred by law from offering advice to people whove filed for bankruptcy. The court does have information and documents available for those doing it themselves, legally called pro se.
The Totality Of Circumstances Test
A few states use the totality of the circumstances test. It might seem that this is an easier standard to meet because it doesnt consider whether youve made a good-faith effort to repay your loans, such as consistent attempts to obtain employment, maximize income, and minimize expenses. However, the totality of the circumstances test also includes an any other relevant facts and circumstances component that could be broadly interpreted.
Under either standard, the bar to clear is high, especially for federal student loans, for which the government specifically states that the burden of proof is on the debtor to prove undue hardship.
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Wait For The Adjudicator’s Decision
After you submit your application, the adjudicator will decide either to make a bankruptcy order or reject your application. The adjudicator has 28 days to make their decision.
If they need more information about your case, they will contact you. If they do need to contact you, they will have 14 more days to make a decision.
If they decide to reject your application, you can ask them to review their decision. If they confirm their decision to reject your application after the review, you can appeal to the court against the decision.
To request an appeal, you need to submit form N161 to your local court that deals with bankruptcy. You can find form N161 on the GOV.UK website.
Find Out If You Qualify To File Bankruptcy
When debt becomes insurmountable or your ability to pay changes due to job loss, a change in the family dynamic, or any other reason, you might need the benefits of bankruptcy. The following people may qualify to file for Chapter 7:
- People who have made a valid effort to repay debt
- People who cannot realistically repay their debt
- Individuals, married couples, and certain businesses
While the bankruptcy process is demanding, filers dont need to take on this challenge alone. Our lawyer will determine if you qualify for Chapter 7 bankruptcy and explain how discharging your debt might allow you to start over financially.
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Make Sure Bankruptcy Is The Right Option For You
Bankruptcy can offer you a fresh start if you can’t see any other way out of your debt problems. However, going bankrupt may have a serious impact on your day-to-day life, so it isn’t for everyone. Make sure you’ve done your research, taken advice and are sure it’s the best option for you.
Repayment Plan Period: 3 Or 5 Years After Filing
Once the bankruptcy court approves the repayment plan, you and your creditors are bound to it. You are responsible for ensuring the trustee receives your payments on schedule. During your repayment period, you may not incur new debts, such as taking out a new mortgage or opening a new credit card, without approval from your trustee.
Periodically, your trustee will send you statements showing the amount paid to each creditor, and the remaining amount due. Each year while the plan is in effect, you will be responsible for sending the trustee income and expense statements.
Since your repayment plan covers several years, there are many potential life changes that may make the plan untenable. People lose their jobs and get sick, making them unable to work. In these situations, you can seek to have your repayment plan modified, even after it was confirmed.
Finally, before you make your final payment under your plan, you must file a certificate with the court showing you completed a course in personal finance management.
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Does The Spouse Of A Married Person Also Have To File Bankruptcy
No. In some cases where only one spouse has debts, it may make sense for only one spouse to file. Further, if the debts of the other spouse are not dischargeable it may not make sense for that spouse to file.
Both spouses are responsible for the debts acquired together while they are married. If you file for a bankruptcy on these joint debts, your creditors can pursue your spouse for payment. If you are living together, it may be wise for you to jointly file for bankruptcy.
If the debt belongs to you alone, the creditor cannot pursue your spouse for the debt after you file for bankruptcy. Before you make a decision on whether the debt is a joint debt or yours alone, you may want to ask an attorney.
If you co-signed for a debt with an unmarried partner or someone else, you cannot file jointly for bankruptcy. However, you can file separately.
You can protect a friend or relative who co-signed with you by filing for Chapter 13 bankruptcy. When you file under Chapter 13, creditors are not allowed to pursue your co-signers as long as you are keeping up the payments under the plan. As long as you pay the creditor as proposed by the plan, the creditors will not pursue the friend or relative who co-signed with you.
Read the Law: 11 U.S.C. § 1301
Is It True That After 7 Years Your Credit Is Clear
Having all debts that are present after seven years taken off your credit report can have a positive impact on your credit score as well. Seven years after a negative report is filed, you can no longer see it in your credit report. A positive account will stay on your credit report forever if you open it.
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Recovering From A Bankruptcy
Bankruptcies are designed to give you a second chance with your finances. Once you have a completed your bankruptcy, there are ways to speed the recovery of your credit score.
Chapter 7 Bankruptcy: What It Is And How To File
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Chapter 7 bankruptcy can wipe out many forms of overwhelming debt under the protection of a federal court. You may have to give up some assets, like an expensive car or jewelry, but the vast majority of filers do not. Chapter 7 bankruptcy is the fastest and most common form of bankruptcy.
Chapter 7 bankruptcy erases most unsecured debts, that is, debts without collateral, like medical bills, credit card debt and personal loans. However, some forms of debt, such as back taxes, court judgments, alimony and child support, and student loans generally arent eligible. Chapter 7 bankruptcy will leave a serious mark on your credit reports for 10 years. During this time youll likely find it harder to get credit. Even so, youll probably see your credit scores start to recover in the months after you file.
Read on to learn about how you can qualify for Chapter 7 bankruptcy, how to file, whether this debt relief option is right for you, and how to rebuild after bankruptcy.
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When Does The Discharge Occur
The timing of the discharge varies, depending on the chapter under which the case is filed. In a chapter 7 case, for example, the court usually grants the discharge promptly on expiration of the time fixed for filing a complaint objecting to discharge and the time fixed for filing a motion to dismiss the case for substantial abuse . Typically, this occurs about four months after the date the debtor files the petition with the clerk of the bankruptcy court. In individual chapter 11 cases, and in cases under chapter 12 and 13 , the court generally grants the discharge as soon as practicable after the debtor completes all payments under the plan. Since a chapter 12 or chapter 13 plan may provide for payments to be made over three to five years, the discharge typically occurs about four years after the date of filing. The court may deny an individual debtor’s discharge in a chapter 7 or 13 case if the debtor fails to complete “an instructional course concerning financial management.” The Bankruptcy Code provides limited exceptions to the “financial management” requirement if the U.S. trustee or bankruptcy administrator determines there are inadequate educational programs available, or if the debtor is disabled or incapacitated or on active military duty in a combat zone.
Contact Our Knowledge Team Of Bankruptcy Attorneys
Why do you need a bankruptcy lawyer? The process of filing for bankruptcy is highly involved and often time-sensitive. Even the smallest delay or oversight could affect how quickly your bankruptcy goes into effect.
When youre struggling to get out from under a mountain of debt, every second counts. The bankruptcy experts at JPP Law can help you get the debt relief you need sooner rather than later. Dont wait schedule an appointment with us today.
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Is Marital Property Safe In Bankruptcy
Under Florida family law, when a married couple jointly purchases a home or other personal property, it is presumed that the property will be held as tenancy by the entireties. In a tenancy by the entireties, the property is owned by the marital union, rather than by the individual spouses. This is an important fact to consider if you are contemplating filing bankruptcy when married.
Each party to the marriage has an undivided one-half interest in the marital union, which in turn owns the property. Thus, a creditor of one spouse may not place a lien on property held as a tenancy by the entirety without both spouses agreeing to do so. Therefore, if only one spouse agrees to give property held as tenancy by the entireties to a creditor as collateral for a loan, the creditor will not be able to force a liquidation of the property. Instead, the creditor will only have a lien on that spouseâs one-half interest in the tenancy by the entireties.
