Dealing With Your Car Loan
If you own a car that you still owe on, youâll have to let the bank and the court know what you want to do with it one one of your bankruptcy forms.
If you want to surrender the car to the lender and discharge the debt, you donât have to do anything other than stop making your payments. The bank will either file request with the bankruptcy court to ask permission to retake the car, or wait until your discharge is granted before picking it up.
If you want to keep the car, you can either reaffirm the loan or redeem the car. If youâre reaffirming your loan, the bank will send you a reaffirmation agreement after your case is filed. You have to complete and sign the agreement and return it to the bank within 45 days from your 341 meeting. The bank files the signed agreement with the court for approval.
To redeem the vehicle you have to file a motion with the court and, once granted, buy the car from the bank for its current value. This gets you out of having to pay the amount left on the loan, but payment has to be made in one lump sum.
Filing for bankruptcy takes some preparation. Hiring a good bankruptcy attorney is one way to file. But if you can’t afford the attorney fees to hire one and you need a fresh start, Upsolve may be able to help. If you’re eligible, our free web app will walk you through the process and help you prepare your forms for filing with the court.
Check out the video below â¬ï¸ to see how it works!
How Will Bankruptcy Affect My Credit
Bankruptcy will actually improve most peoples credit score. Once you file for bankruptcy and discharge all your debts, your debt to income ratio will improve significantly. However, bankruptcy is just the first step to rebuilding your credit. We provide all our clients with credit repair tools to help them start improving their credit score immediately. And yes, youll still be able to use .
Filing Without An Attorney
Individuals can file bankruptcy without an attorney, which is called filing pro se. However, seeking the advice of a qualified attorney is strongly recommended because bankruptcy has long-term financial and legal outcomes.
Filing personal bankruptcy under Chapter 7 or Chapter 13 takes careful preparation and understanding of legal issues. Misunderstandings of the law or making mistakes in the process can affect your rights. Court employees and bankruptcy judges are prohibited by law from offering legal advice.
The following is a list of ways your lawyer can help you with your case.
- Advise you on whether to file a bankruptcy petition.
- Advise you under which chapter to file.
- Advise you on whether your debts can be discharged.
- Advise you on whether or not you will be able to keep your home, car, or other property after you file.
- Advise you of the tax consequences of filing.
- Advise you on whether you should continue to pay creditors.
- Explain bankruptcy law and procedures to you.
- Help you complete and file forms.
- Assist you with most aspects of your bankruptcy case.
Bankruptcy Forms are available to the public free of charge.
- Use the forms that are numbered in the 100 series to file bankruptcy for individuals or married couples.
- Use the forms that are numbered in the 200 series if you are preparing a bankruptcy on behalf of a nonindividual, such as a corporation, partnership, or limited liability company .
- Sole proprietors must use the forms that are numbered in the 100 series.
Is There An Income Limit For Chapter 7 Bankruptcy
To automatically qualify for Chapter 7, your disposable income must be below the median level for your state. That number varies from state-to-state. If your disposable income exceeds the median in your state, you still may be able to qualify through a means test that includes looking at your income and reasonable expenses to see if you can get that number under the median income for your state.
Filers In All Other States And Territories
Certificate of completion for both credit counseling and debtor education are required but before the filers debts can be discharged. Only credit counseling organizations and debtor education course providers that have been approved by the U.S. Trustee Program may issue these certificates for filers in all states and territories except for Alabama and North Carolina. Find an approved or debtor education provider.
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Can I File For Bankruptcy Online In 2021
3 minute read â¢ Upsolve is a nonprofit tool that helps you file bankruptcy for free. Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we’ll never ask you for a credit card. Explore our free tool
In a Nutshell
When you are hit by a sudden financial shock and need a fresh start, you naturally ask – can I file for Chapter 7 bankruptcy online? In this article, weâll explain the different options for filing for bankruptcy online and the pros and cons of each.
You live a lot of your life online. You do your taxes online with Turbotax and diagnose medical problems online with WebMD. If you’re facing a wage garnishment or repossession, youâre probably wondering if you can file Chapter 7 bankruptcy online. The answer is, âmostly, yes.â
The Chapter 7 and Chapter 13 bankruptcy process involves
filing them with the bankruptcy court, and
attending a â341 meetingâ with the official overseeing your case.
Legal Assistance For Low Income Debtors
Legal advice for those in low-income situations comes in many forms. Keep in mind there are many ways to address the cost of bankruptcy. A tax refund could be applied to attorney fees. One could stop paying unsecured debts and use that money for an attorney and ask the debt be addressed in bankruptcy. Property that isnt exempt from bankruptcy could be sold think jewelry, the antique furniture or painting passed down by your uncle, a car that isnt necessary.
In addition, legal help is available to those in need, though the availability varies by location. Some bankruptcy courts have free clinics to help people file on their own. Legal aid groups and pro bono attorneys will work for free. Call the local Legal Aid Society in your area, the state bar or check the web site for the local bankruptcy court to find information.
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Filers In Alabama And North Carolina
By law, the U.S. Trustee Program does not operate in Alabama and North Carolina in these states, Bankruptcy Administrators approve pre-bankruptcy credit counseling organizations and pre-discharge debtor education course providers. The following is a list of Bankruptcy Administrator approved providers in Alabama and North Carolina.
What Bankruptcy Typically Looks Like
If you do end up filing for bankruptcy, there are generally two types that individuals file: Chapter 7 and Chapter 13.
A Chapter 7 bankruptcy is all about selling anything valuable you own a second vehicle, a vacation home, collectibles, stocks, bonds to pay off your debts. Generally, this type of bankruptcy wipes out all of your outstanding debts once a judge approves your filing in court. The whole process typically takes about three to five months. Chapter 7 bankruptcies are best suited for those who cannot pay back all, or a significant portion, of their balances. Tadross says that he typically recommends clients file for Chapter 7 bankruptcy if they have an unmanageable amount of unsecured debt, such as medical or credit card.
A Chapter 13 bankruptcy, referred to as a reorganization bankruptcy, is designed for those with a regular income to create a plan to repay all, or part, of their debts in installments. It works well if you are so far behind on your home mortgage payments that you may be facing foreclosure or eviction. With this type of bankruptcy, you generally don’t have to sell off your property to pay your lenders, but instead work to pay off your debts through a court-approved consolidated repayment plan that runs for a set period of time, typically three to five years. At the end of that period, any remaining unpaid debts are discharged.
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Getting Ready To File
How Much Does It Cost
In Chicago and the rest of Illinois, you will have to pay a filing fee of $335 when you file your case. At DebtStoppers, well advance you the filing fee cost, so you can get the debt relief you need today with no up-front cost.
Because every case is different, our legal fees can vary, but are among the most reasonable anywhere. Affordable payment plans are always available.
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How To File Bankruptcy In 2021 For Free: A 10
Upsolve is a nonprofit tool that helps you file bankruptcy for free. Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we’ll never ask you for a credit card. Explore our free tool
In a Nutshell
Chapter 7 bankruptcy is an important debt relief tool for Americans in severe financial distress from losing a job, getting injured, or getting divorced. Upsolve walks you through the steps on how to file for Chapter 7 bankruptcy and get your fresh start in 10 steps.
Written by Attorney Andrea Wimmer.
First, you need to determine whether filing bankruptcy will help you. Bankruptcy is a powerful debt relief tool, but only if it makes sense for your financial situation. Filing any type of bankruptcy provides immediate debt relief through the automatic stay. Thatâs the law that prohibits creditors from contacting you as soon as your bankruptcy case has been filed. It also stops a wage garnishment right away.
Chapter 7 bankruptcy is a very effective tool for erasing credit card debt, medical debts, and most other unsecured debt. Although Chapter 7 is a liquidation bankruptcy, filers are able to keep all their property in more than 90% of all consumer bankruptcy cases in the United States. You can file bankruptcy under Chapter 7 once every 8 years.
The name of your bankruptcy trustee
The date, time, and location of your meeting with your trustee
Bankruptcy Is Not The End Of Your Financial Life
If you can no longer afford to pay your bills and you haven’t been able to negotiate better terms with your lender, then it may be time to consider bankruptcy. Don’t beat yourself up over it too much, Rao says.
Filing for bankruptcy is often seen as this admission that “I’m a failure,” but that’s not usually the case, he says. And while it’s a step most people don’t want to take, bankruptcy can provide a lot of relief if done right.
“It really does provide that fresh start,” Tadross says, adding that once your Chapter 7 bankruptcy is approved, or you receive a discharge in your Chapter 13 case, you’re completely debt-free.
Chapter 13 bankruptcies can stay on your credit report for three years, while Chapter 7 cases disappear after 10 years. But that won’t prevent you from getting approved for credit.
Quite the opposite, Tadross says, adding he usually advises clients that they will likely receive dozen pre-approved credit card offers within a week of completing their bankruptcy. Why? Because creditors know you’re debt-free and that you’re not going to be able to file for another bankruptcy for several years.
Debt can feel like an albatross around your neck, Tadross says, but you shouldn’t feel humiliated that you’re taking steps to rectify it through bankruptcy. “You’re just making arrangements to catch up on what you owe it’s not the end of the world,” he adds.
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How Chapter 7 Works
A chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets. In addition to the petition, the debtor must also file with the court: schedules of assets and liabilities a schedule of current income and expenditures a statement of financial affairs and a schedule of executory contracts and unexpired leases. Fed. R. Bankr. P. 1007. Debtors must also provide the assigned case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case . 11 U.S.C. § 521. Individual debtors with primarily consumer debts have additional document filing requirements. They must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling evidence of payment from employers, if any, received 60 days before filing a statement of monthly net income and any anticipated increase in income or expenses after filing and a record of any interest the debtor has in federal or state qualified education or tuition accounts. Id. A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302. Even if filing jointly, a husband and wife are subject to all the document filing requirements of individual debtors.
Here’s A List Of The Forms You Must File In Chapter 7 Bankruptcy And Where To Find Them
By Kathleen Michon, Attorney
When you file for Chapter 7 bankruptcy, you must complete and file a packet of forms. Here’s a list of the many forms you’ll need to file for Chapter 7, and where to find them.
COVID-19 Updates: Retirement Accounts Stimulus Funds Online Filings
If you’re worried that you make too much to qualify for bankruptcy, CARES Act provisions ensure that receiving stimulus funds won’t affect your ability to obtain a discharge.
Also, rest assured that you can file safely. Many bankruptcy lawyers will consult with you virtually, and bankruptcy filers now appear at the 341 creditor meeting by video or telephonically. Check the U.S. Trustee’s 341 meeting status webpage or go to your court’s website for details.
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Five: First Meeting Of Creditors
This meeting is held by the Trustee assigned to your case. You must go to the meeting. The court posts driving directions to the creditor meeting sites.
The Trustee will determine whether you have any unprotected assets that can be liquidated to pay creditors. He will also review your situation to determine whether he should object to your discharge.
Pay close attention to the Trustee’s instructions. He will making important decisions about your case.
Alternatives To Filing Chapter 7 Bankruptcy
If you are wondering if you should file for bankruptcy, there are many nonprofit consumer credit counseling organizations that have the ability to negotiate more favorable terms with creditors. Its particularly effective with credit-card companies. The repayment program will be managed expertly and fees could be avoided.
Here are some options:
Debt Management Plan Entering into a debt management program can provide relief from interest rates, late fees and penalties from creditors. Under a DMP, which is negotiated by credit counselors, you promise to pay back the full principal over time in an efficiently managed manner.
The debt management program provides an organized monthly payment plan. It provides an opportunity to handle the debt more efficiently than trying to sort it out yourself. By keeping the payments on track, it will be good for your credit score.
Some caveats: There is generally an enrollment and maintenance fee and the DMP is never a guaranteed option. Creditors have no obligation to participate.
Debt Consolidation This option reduces interest rates and combines all of your debts into one manageable monthly payment. Under debt consolidation, you take out a loan, which is used to consolidate and pay off all of your other debts.
Personal Loan for Bad Credit Yes, you can get a personal loan with bad credit, depending on your situation. You can expect high interest rates and should only consider this option if you can truly afford the monthly payment.
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