What Is A Chapter 7 Bankruptcy
In a Chapter 7 bankruptcy, you must list all your debts, no matter the size or to whom you owe them. You also must list all your property. West Virginia law lets you keep a certain amount of property you own free and clear. Property protected from your creditors includes these items:
- $25,000 in property for an individual and $50,000 for a married couple in either equity, household goods, or a mix of equity and goods in West Virginia.This is often referred to as the wildcard exemption.
- There are a variety of other exemptions that may allow you to keep additional property above the wildcard exemption above.
It is very uncommon in West Virginia for any property to be sold, but if you have more property than your exemptions allow you may have to sell that property or make payments to Chapter 7 or Chapter 13 trustee. The money is used to pay your creditors. They may get only a few cents for a dollar of debt. The court discharges most of your debts and you get a fresh start.
Will Bankruptcy Help Me With My Taxes
It might. Income taxes that are over three years old may in some circumstances be able to be discharged in Chapter 7 bankruptcy. If they are not dischargeable in Chapter 7, they can probably be restructured in Chapter 13. There are very specific rules that address taxes in bankruptcy so if you have a tax issue, consult with a bankruptcy attorney from Schwartz Bankruptcy Law Center to find out what your rights are.
If you have older taxes that may be subject to discharge, it will be very useful to obtain an account transcript from the IRS for the years in question.
Dealing With Your Car
Filing Chapter 7 bankruptcy in Kentucky will not only help get your creditors off your back, it will help you deal with your car in a way that makes sense for you. If your car or truck is paid off, then you can keep it as long as it is worth less than the available exemption. If you are making payments on your vehicle, your Kentucky bankruptcy puts you in the driver’s seat on what to do about the loan. That doesn’t mean that you get to keep your car without paying for it, after all, how fair would that be? It does mean that if your car and your car loan make sense for your budget, you can keep things the same by entering into a reaffirmation agreement. It also means that if your car loan is bad, but you can come up with the money to pay for the vehicle’s actual current value, you can just buy it outright by doing something called a redemption. If none of that makes sense, you can simply give the car back without having to worry about paying the rest of the loan.
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How Does Bankruptcy Work
Bankruptcy is a method to eliminate or at least reduce your debt when bills pile up beyond your ability to repay them. It should be viewed as a last resort to be considered only when all other potential courses of action to get back on track have been exhausted.
Individuals filing for bankruptcy mostly use either Chapter 7 or Chapter 13. The biggest difference between the two is what happens to your property:
- Chapter 7, which is known as liquidation bankruptcy, involves selling some or all of your property to pay off your debts. This is often the choice if you don’t own a home and have a limited income.
- Chapter 13, also known as a reorganization bankruptcy, gives you the chance to keep your property if you successfully complete a court-mandated repayment plan that lasts between three and five years.
Depending on where you live and your marital status, some of your property may be exempt from being sold when you file Chapter 7 because of state-specific and federal exemptions. With exemptions, whether they be your home equity, retirement accounts or even personal possessions such as jewelry, you receive the allowed exemption amounts, and the rest of the proceeds will be used to pay off debts. You can read more about potential exemptions, and check out this chart for a quick rundown on the two types:
| Chapter 7 |
|---|
- Child support or alimony
- Student loans
How Does Filing Bankruptcy Impact Credit
Your credit may not be in tip-top shape by the time you consider filing for bankruptcy, since high balances and missed payments are the top factors affecting your credit score. Still, the presence of a bankruptcy on your credit report will severely impact your credit scores and creditworthiness the entire time it is on your report. That impact will lessen as time passes, however. Chapter 7 bankruptcy remains on your report for up to 10 years, and Chapter 13 stays there for up to seven years.
It’s not an ideal credit situation, of course, but you can use the time to manage your debts wisely and make consistent on-time payments. Like with any damage to your creditworthiness, it’s possible to rebuild your credit with some focus and patiencealong with using the debt relief provided by the bankruptcy to get back on track financially.
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Exceptions To The Rules
There are exceptions to the guidelines above, however. For example, time requirements may be reduced if you paid 100 percent of unsecured claims in your Chapter 12 or 13 bankruptcies. On the other hand, Chapter 11 and 12 guidelines might not be as easy and straightforward as stated above if you violated a court order or had a case dismissed during the 180 days preceding your bankruptcy filing. In either of these situations, you may not immediately qualify for another discharge.
Federal Bankruptcy Laws Require You To Go Through Debt Counseling
There are many steps you must go through to complete a Chapter 13 bankruptcy. It is more complicated and a much longer process than a Chapter 7 bankruptcy. However, for both types of bankruptcy, you must also complete debt counseling.
Within the six months before you file a Chapter 13, you must complete a federally approved credit counseling session. This must be done before you can file.
After you file for bankruptcy, but before you can be discharged, you must complete a personal financial management course. You may also see this called a pre-discharge debtor education or debt management course.
The purpose of these courses is to educate you regarding finances and debt, help you better manage your money, and help you avoid acquiring too much debt in the future. Call an Arkansas Chapter 13 bankruptcy lawyer located in Fayetteville to learn more about this required debt counseling.
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Collect Your Mississippi Bankruptcy Documents
Filing bankruptcy in Mississippi unfortunately means a lot of paperwork. Since you have to provide the court with a complete picture of your financial situation when you file your case, it’s important to be diligent and start by collecting certain documents. These documents will help you remember all the important details needed under Mississippi bankruptcy laws and procedures. The first thing you should collect is each paycheck stub you have received in the last 6 months. If you are getting paid via direct deposit, it’s possible these stubs are provided to you via e-mail. Aside from showing the court that, based on your income, you are eligible to be a debtor in a Chapter 7 bankruptcy in Mississippi, you have to provide a list of your debts and addresses for all of your creditors to the court. To help you make sure you don’t miss anyone, especially those debt collectors that may not have bothered you in a while, you should get a copy of your credit report. Other documents you will want to have handy when completing your forms are your recent bank statements, the last two years’ of tax returns, and a recent bill for your secured debts, such as your car loan.
How Do I Get The Bankruptcy Removed From My Credit Report
The bankruptcy court has no jurisdiction over credit reporting agencies. The Fair Credit Reporting Act, 6 U.S.C. Section 605, is the law that controls credit reporting agencies. The law states that credit reporting agencies may not report a bankruptcy case on a persons credit report after ten years from the date the bankruptcy case is filed.
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Will I Have To Go To Bankruptcy Court
Not usually, but there is always one meeting that you must attend. This meeting is known as the Creditors Meeting, and it is 100% mandatory. This meeting is held in a conference room and is run by the trustee in charge of your case. The meeting usually lasts 1020 minutes, depending upon the complexity of your case. Creditors may appear and ask questions, but they cannot harass you. In most instances, you will never see the judge assigned to your bankruptcy case.
Chapter 7 Bankruptcy Exemptions Permissible In Kentucky
Homestead Exemption First, of primary interest is the Homestead Exemption. Under federal law 11 U.S.C. 522 , you can exclude real property, including your home, co-op, or mobile home, or burial plot up to $25,150. You must live in the property or it is reduced by 1/2 and used as a wildcard. The unused portion of the homestead exemption, to $12,575, may be applied to any other property. This benefit allows you to keep your home if the equity is less than the allowed exemption . This benefit allows you to keep your home if the equity is less than the allowed exemption .
Other federal Chapter 7 bankruptcy exemptions include:
Transportation Exemption over $4,000 in equity
Jewelry Exemption Up to $1,600.
Other Personal Property A total of $13,425 in exemptions for general household items, including furniture, electronics, clothing, musical instruments, livestock, crops, and similar goods. There is a maximum exemption amount of $625 per item.
Tools of the Trade Tools, equipment, and livestock exemption is over $2,525 if used for gainful professional pursuits.
Financial Assets Up to $12,625 in accrued dividends, life insurance or loan cash values
Legal Recovery Awards This includes up to $25,150 for personal injury awards . You can keep all legal restitution received as a victim of wrongful death, a criminal act, or a case involving loss of future earnings.
In addition to the above, federal bankruptcy statutes protect:
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How Much Does It Cost To File Bankruptcy
In addition to the law firm bankruptcy attorney fee, which will be based on your personal circumstances, you will also need to pay the court filing fee and take 2 online courses . The court filing fee for Chapter 7 is currently $335.00 and the court filing fee for Chapter 13 is currently $310.00. The court may allow you to pay this filing fee in installments if you cannot pay all at once.
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How Many Years Do You Have To Wait To File Bankruptcy
Read on for more information about the different types of bankruptcy and whether any of these options may be right for your business. Following a Chapter 7 or 11 discharge, you must wait eight years before filing. If you previously filed a Chapter 12 of 13, however, you must only wait six years after discharge.
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How Long Will Bankruptcy Stay On My Credit Report
The Fair Credit Report Act, 6 U.S.C. Section 605, is the law that controls credit reporting agencies. The law states that credit reporting agencies may not report a bankruptcy case on a persons credit report after 10 years from the date the bankruptcy case is filed. Other bad credit information is removed after seven years.
The larger credit reporting agencies belong to an organization called the Associated Credit Bureaus. The policy of the Associated Credit Bureaus is to remove Chapter 13 cases from the credit report after seven years to encourage debtors to file under this chapter.
A Exceptions To The Means Test
The bankruptcy means test is only a presumption your filing is or isnt filed in bad faith. Some facts, such as a sudden disability, may allow you to file a Chapter 7 even if you fail the means test. Sudden changes in circumstances may make Chapter 13 not be feasible. You only need to explain a reason that allows you to file, such as a recent retirement or sudden disability, to overcome this presumption. Your income being seasonable may also be an excellent reason to prove the means test should not be a basis for you to be denied filing as a Chapter 7.
If over 50% of your debt is the business debt, you qualify under the second portion of the means test. Veterans who incurred most of their debt in service are also excluded from the means test. Income from Social Security, Veterans benefits, and disability are also excluded from the means test but are used in the budget income and expenses part of the petition.
I have met some attorneys who brag 95% of their clients file Chapter 13. About 70% of the cases filed nationally are Chapter 7 cases. Chapter 13 pays an attorney about three times the average Chapter 7 fee.
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Consider The Cons Of Double Filing
If you file too soon, you cannot legally have another debt discharge until the time limits have passed, so the process could waste your time and money.
Furthermore, if a judge finds that you have filed again “in bad faith,” they will stop your automatic stay , unless you can provide clear and convincing evidence that you filed in good faith. They might even throw your case out.
How To File Bankruptcy In Virginia For Free
If you are worried about how to make your monthly living expenses while creditors are knocking on your door, you may wonder how to file bankruptcy in Virginia for free. After all, if you had money, you wouldn’t be in this situation, right? If you are not filing for Chapter 13, chances are that you may be able to file Chapter 7 bankruptcy in Virginia without having to pay a lot of money out of pocket. You can file without an attorney to avoid having to pay attorneys’ fees. Additionally, depending on your income, you may qualify to have your court filing fee waived, saving you another $338 and making filing Chapter 7 bankruptcy in Virginia a path you can afford.
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Bankruptcy May Help If You Finding How To File Bankruptcy In Ky
Bankruptcy can be a daunting process, whether youre filing as an individual or for a business. Filing bankruptcy without the help of an attorney can be even more confusing and stressful, and mistakes can be costly. Local bankruptcy attorneys can provide you with legal advice about the different types of bankruptcy, whether its a Chapter 7, Chapter 11 or even a Chapter 13, and how they might apply to your situation. Bankruptcy attorneys can also help you with all of the required filings and represent you in court.
No two bankruptcies are the same. Your debt load, ownership of exempt and nonexempt assets and your income all affect how you will file your bankruptcy case and its outcome. In some cases, you may need to agree to a long-term repayment plan. In other cases, you may get a fresh start. In either case, bankruptcy may help you protect your property and assets.
If you are not sure if bankruptcy is right for you, discuss your situation with local bankruptcy attorneys and determine if bankruptcy can give you the relief you need. While bankruptcy may be a last-resort, having a bankruptcy attorney negotiate with creditors on your behalf may help creditors understand the seriousness of your situation and to ensure that any agreements reached are properly documented and enforceable. For legal advice specific to your situation, simply fill out the request form and local attorneys will contact you shortly.
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What Is The Creditors Meeting What Can I Expect To Happen At The Meeting
A meeting of creditors is the single hearing all debtors must attend in any Bankruptcy proceeding. It is held outside the presence of the judge and usually occurs between twenty-one and sixty days from the date the original petition is filed with the court. In Chapter 7 and Chapter 13 cases, the trustee assigned by the court on behalf of the United States Trustee conducts the meeting.
The meeting permits the trustee or a representative of the United States Trustees Office to review the debtors petition and schedules with the debtor face-to-face. The debtor is required to answer questions under penalty of perjury concerning the debtors acts, conduct, property, liabilities, financial condition and any matter that may affect administration of the estate or the debtors right to a discharge. This information enables the trustee or representative of the United States Trustees Office to understand the debtors circumstances and facilitates efficient administration of the case. Additionally, the trustee or a representative of the United States Trustees Office will ask questions to ensure that the debtor understands the positive and negative aspects of filing for bankruptcy.
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What Is A Joint Petition
A joint petition is the filing of a single petition by an individual and the individuals spouse. Only people who are married as of the date they file the petition may file a joint petition. Unmarried persons, corporations, and partnerships must each file separate cases. If you are an individual and have a business, you may not file a single petition for yourself and your business each must be a separate bankruptcy case. If you are married, you are not required to file a joint petition.