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Which Chapter Of Bankruptcy Is For Consumers

If A Bankrupt Business Owes Services To A Consumer

Chapter 7 Consumer Bankruptcy Basics

Some businesses offer services to consumers on monthly or other periodic plans. If a business enters bankruptcy during the term of a service contract with a consumer, the automatic stay prevents enforcement of the contract in court, and the obligation becomes subject to the bankruptcy proceeding. The same generally applies to warranty coverage offered by a business.

Chapter 7 Bankruptcy Vs Chapter 13 Bankruptcy

Chapter 7 bankruptcy has more stringent income qualification requirements and requires the debtor to have his non-exempt assets sold. A Chapter 13 bankruptcy, on the other hand, is easier to qualify for if you have a higher income as it lets you retain all of your possessions. However, Chapter 13 will not just forgive eligible debts like a Chapter 7 will instead, you will need to pay back some or all of those debts over a 3-5 year repayment program that your creditors must approve. Deciding to file Chapter 7, Chapter 13, or any type of bankruptcy as a consumer is an important one that you shouldn’t make until you are fully informed about your options.

What Is An Automatic Stay

One of the benefits of filing bankruptcy is that an “automatic stay immediately goes into effect. This means most collection activity against you or your property must stop. As long as the automatic stay is in effect, creditors usually cant begin or continue lawsuits, foreclosures, repossessions, wage garnishments, or even telephone calls demanding payment. Filing bankruptcy will not stop certain kinds of actions though, like criminal proceedings, paternity or child custody actions, or collection of alimony or child support. Creditors are sent notice of the bankruptcy by the court and if a creditor violates the automatic stay by continuing to try to collect the debt, you might be able to recover damages from them.

The automatic stay generally continues until your case is closed, dismissed, or your discharge is granted or denied. Creditors may seek to have the automatic stay lifted. For example, if youre surrendering a home or vehicle or arent keeping up with the payments, the lender may request that the court allow it to take possession of the property.

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Here’s How Bankruptcies Impact Your Credit Score

While bankruptcies on your credit report will always get factored into your credit score for as long as they are on there, the impact on your score lessens with each year that passes. So, you may see a dramatic drop in your score in the first month immediately following your bankruptcy filing, but by the end of the first year it could have less weight, and certainly less in later years compared to year one.

Your own credit profile will also play a part in how much your credit score is affected when you declare bankruptcy. Similar to how having a higher credit score can ding your more points if you miss a credit card payment, so, too, is the case if you file for bankruptcy. According to FICO, someone with good credit may experience a bigger drop in their score when a bankruptcy appears on their report than someone with an already poor credit score.

Estimates we found online from places like show how people with different credit scores would be impacted by a bankruptcy filing. Someone with a credit score of 780 or above would be dinged between 200 and 240 points, while someone with a 680 score would lose 130 to 150 points.

Whatever the case, no one really benefits from filing for bankruptcy. It’s an option of last resort that sometimes even those with good credit find themselves making.

Impact Of Business Bankruptcy On Consumer Rights

Bradleys Bankruptcy Basics: Chapter 13 Bankruptcy ...

Businesses fail on a daily basis, and our economy is set up, at least in principle, to enable new businesses to take their place. This is little comfort, however, to consumers who relied on a failed business for one reason or another. A business fails when it can no longer meet its obligations to its customers, creditors, and owners with its available income. This is also known as insolvency. The bankruptcy system gives insolvent businesses some options beyond outright failure. In a Chapter 7 bankruptcy, a business liquidates its assets in order to pay as much debt as possible. At the end of the bankruptcy case, the business usually ceases to exist. A Chapter 11 bankruptcy allows a business to reorganize in order to continue operations. The rights of the consumer in these processes depend on numerous circumstances.

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Considering Chapter : Who Can File Chapter 7 Bankruptcy

A Chapter 7 bankruptcy is a straight liquidation of your current assets to pay off unsecured debts owed to creditors. A Chapter 7 bankruptcy allows you to keep various personal property assets like a home, car and various other personal items. To find out exactly how a bankruptcy will effect you, retaining the services of an experienced bankruptcy attorney is your absolute best option.

Chapter 7 tends to be the simplest way for consumers to resolve their debts â many are able to resolve their cases in a matter of months and hold on to their property when itâs all over.

Some property is exempt from getting taken in a Chapter 7 proceeding â courts cannot debtors to sell their clothes, their automobiles or their household appliances and furniture, nor can they seize money paid out through public assistance programs.

But courts can force debtors in Chapter 7 proceedings to sell second cars or homes, valuable collections, money in a bank account over a certain amount and stocks and other investments.

The best candidates for a chapter 7 are known as no-asset cases where you have debt you can’t repay and no tangible net worth to be liquidated. This is not to suggest that assets can be hidden though, in fact doing so is a violation of Federal law and you’ll end up in jail for doing so. The most important first step you can make is to contact a bankruptcy lawyer immediately if you’re considering filing any type of bankruptcy.

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If A Bankrupt Business Has A Consumers Deposit

Consumers often put down deposits with businesses to reserve a popular product or a rental property. The ability of a consumer to retrieve a deposit from a bankrupt business depends on multiple factors, such as the type of property reserved by the deposit, whether any local or state law applies, and whether the business keeps deposits separate or commingles them with their general funds.

Payment of a deposit creates a contractual obligation on the part of the business, but once a bankruptcy case commences, the consumer may have to join the ranks of creditors. It may be possible for the business to follow through on its obligation, or to refund the deposit. It is also possible, however, that the deposit will become a discharged debt.

Tenants are often required to submit a refundable security deposit during the term of a residential lease. Most states have laws specifically regulating security deposits. Landlords might be required to keep security deposits separate from other funds, to account for any deductions, and to refund them to a tenant within a certain time frame. Security deposits are less likely to be affected by bankruptcy because they remain the property of the tenant at all times, although the automatic stay may affect a tenants ability to enforce state law.

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Harrisburg Bankruptcy Lessons For Consumer Chapter 13

Pennsylvanias capital city of Harrisburg is seeking bankruptcy protection. The city faces a debt that is five times its general-fund budget. The debt accumulated after the expansion of an incinerator, which has not generated enough revenue to repay loans. According to the bankruptcy petition, $65 million is overdue.

Most consumers are unlikely to ever face the debt load of Harrisburg. However, on a smaller scale, the remodeling of a home or significant car repairs may lead to a situation where the amount owed is much more than an assets actual value. Payments may become unmanageable and bankruptcy may become the only option.

Appointment Or Election Of A Case Trustee

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Although the appointment of a case trustee is a rarity in a chapter 11 case, a party in interest or the U.S. trustee can request the appointment of a case trustee or examiner at any time prior to confirmation in a chapter 11 case. The court, on motion by a party in interest or the U.S. trustee and after notice and hearing, shall order the appointment of a case trustee for cause, including fraud, dishonesty, incompetence, or gross mismanagement, or if such an appointment is in the interest of creditors, any equity security holders, and other interests of the estate. 11 U.S.C. § 1104. Moreover, the U.S. trustee is required to move for appointment of a trustee if there are reasonable grounds to believe that any of the parties in control of the debtor “participated in actual fraud, dishonesty or criminal conduct in the management of the debtor or the debtor’s financial reporting.” 11 U.S.C. § 1104. The trustee is appointed by the U.S. trustee, after consultation with parties in interest and subject to the court’s approval. Fed. R. Bankr. P. 2007.1. Alternatively, a trustee in a case may be elected if a party in interest requests the election of a trustee within 30 days after the court orders the appointment of a trustee. In that instance, the U.S. trustee convenes a meeting of creditors for the purpose of electing a person to serve as trustee in the case. 11 U.S.C. § 1104.

As discussed above, a trustee is appointed in each subchapter V case. 11 U.S.C. § 1183.

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Should I Contact A Lawyer If I Need Help With Consumer Bankruptcy Issues

As mentioned previously, bankruptcy is a very complicated process and can be confusing to those without expertise. It is important to have a consumer bankruptcy attorney helping you along the way. There is a chance that some of your debts may be discharged or forgiven and a financial attorney can help you obtain the best outcome for your case.

  • No fee to present your case
  • Choose from lawyers in your area
  • A 100% confidential service

What Is Chapter 13 Bankruptcy

Chapter 13 Bankruptcy, known as wage earners bankruptcy, is a way for a borrower to restructure their debt and be able to afford payments. This option is usually for those who have higher incomes and wish to keep their property.

Some debts may be eligible for discharge but others may require payment in full through a payment plan, usually set for between three and five years.

An individual is eligible for a Chapter 13 bankruptcy filing if they meet the following requirements:

  • They are an individual or married couple, including if they own an unincorporated business or are self-employed
  • Their total secured debts are equal to or less than $1,184,200.00
  • Their total secured debts are equal to or below $ 394,725
  • They have not had a bankruptcy petition dismissed within the last 180 days due to failure to appear or comply with the court and
  • They receive credit counseling through an approved counselor within 180 days of filing their petition.

These requirements may change, so it is always good to consult with an experienced bankruptcy attorney.

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Are You Considering Filing For Bankruptcy Getting Bankruptcy Help From A Legal Professional Is A Smart Move

If youre thinking of declaring bankruptcy, make sure you have all the bankruptcy information you need to make an informed decision. It may be cheaper to DIY your bankruptcy petition but there is a risk of having your bankruptcy filing dismissal if there is an oversight in the bankruptcy forms. Call Northwest Debt Relief Law Firm and schedule a free consultation with our experienced bankruptcy attorneys to discuss your debt relief options today.

A Look Inside The Chapter 13 Bankruptcy

Bankruptcy  Chapter 7 &  13

If a failure of consumers, as usual, the file is to use Chapter 7 bankruptcy, but in some cases, it makes more sense for consumers, under Chapter 13 of bankruptcy file. All failures, regardless of which chapter is filed, to do under the jurisdiction and supervision of the Federal Bankruptcy Court.

The consumer, who is protected under Chapter 13 bankruptcy protection and file protection of creditors who maycollect otherwise present a separate action against the consumer debt owed. If a consumer files Chapter 13 bankruptcy, the debts of all creditors on a consolidated debt, thereby significantly reducing and sometimes even eliminate interest payments, and in almost all cases, it reduces the total amount of money that the consumer must months in each layout.

One of the most beautiful is that after having notified the creditors thatThey have a bankruptcy, chapter 13 or any other chapter are stored, can no longer call or send threatening letters, which only serves to increase your stress level, however. Please keep a notebook next to your phone and the creditors, you talked about the bankruptcy, noting the date, time, creditors and the name of the person who talked to Mark. If they remain in the profession, having declared that he had filed bankruptcy, are in violation of federal law and mayOption at this point to bring a countersuit against them, that a violation. Believe me, and know that they do not want to risk it.

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How Often Can I File Bankruptcy In Oklahoma

If you have had debts discharged within the past eight years under a Chapter 7 bankruptcy, you may not file another Chapter 7 bankruptcy, though Chapter 13 bankruptcy may be available to you.

For more information, please click on one of the image links below.

Life goes on after bankruptcy. And we can help you get there. For a free, no-obligation review of your case, simply contact us. Our bankruptcy lawyers can help you get your finances — and your life — back on track.

Filing Bankruptcy In Oklahoma For Consumers

Filing bankruptcy in Oklahoma most often involves filing for either Chapter 7 bankruptcy or Chapter 13 bankruptcy. Consumers more commonly file chapter 7 bankruptcy though each of these methods has pros and cons. For either way, with few exceptions, you will be required to take an Oklahoma credit counseling program with an approved agency within 180 days before filing.

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The Advantages Of Chapter 13 Bankruptcy:

  • Keep the assets that matter most to you and your family
  • Most debts are eligible to be discharged
  • Have up to five years to pay off your debts
  • Unique ability to remove a second mortgage
  • Cramdown an older car or investment property loan to the present value of the asset
  • Stop accruing interest immediately

Why Is It Important To Hire An Experienced Attorney To Handle Your Bankruptcy Case

Chapter 13 Bankruptcy Explained | Step by Step

Bankruptcy is a highly specialized practice with many nuances. An individual who is unfamiliar with federal bankruptcy law is likely to face many challenges. It is always advised that consumers considering filing for bankruptcy not only consult with, but hire experienced bankruptcy counsel to assist with this technical process. A single misstep, error or omission in the filing and handling of a case may result in the loss of property, valuable assets, or loss of the bankruptcy discharge itself. Determinations made by the bankruptcy court may have a life-changing impact. When handled by an experienced and knowledgeable attorney, a bankruptcy can provide significant benefits and relief. Conversely, an individual who chooses to file on his or her own, or with an inexperienced attorney, may experience difficulties including significant fines or, in egregious cases, federal imprisonment.

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Role Of The Case Trustee

When a chapter 7 petition is filed, the U.S. trustee appoints an impartial case trustee to administer the case and liquidate the debtor’s nonexempt assets. 11 U.S.C. §§ 701, 704. If all the debtor’s assets are exempt or subject to valid liens, the trustee will normally file a “no asset” report with the court, and there will be no distribution to unsecured creditors. Most chapter 7 cases involving individual debtors are no asset cases. But if the case appears to be an “asset” case at the outset, unsecured creditors must file their claims with the court within 90 days after the first date set for the meeting of creditors. Fed. R. Bankr. P. 3002. A governmental unit, however, has 180 days from the date the case is filed to file a claim. 11 U.S.C. § 502. In the typical no asset chapter 7 case, there is no need for creditors to file proofs of claim because there will be no distribution. If the trustee later recovers assets for distribution to unsecured creditors, the Bankruptcy Court will provide notice to creditors and will allow additional time to file proofs of claim. Although a secured creditor does not need to file a proof of claim in a chapter 7 case to preserve its security interest or lien, there may be other reasons to file a claim. A creditor in a chapter 7 case who has a lien on the debtor’s property should consult an attorney for advice.

Chapter 13 Adjustments Of Debts Of An Individual With Regular Income

If a debtor’s income exceeds the state’s median income and he fails the means test, then he must file for a Chapter 13 bankruptcy. The basic difference from a Chapter 7 bankruptcy is that the debtor must repay at least some of his debts over a 3- or 5-year period, but, he will usually be able to keep all his property.

After formulating a repayment plan, the debtor must attend a creditors’ meeting, where creditors may object to the repayment plan. The trustee may also raise any issues at the confirmation hearing.

The debtor must make at least 1 appearance before the judge, called the confirmation hearing, to present his repayment plan, which must be approved by the judge. If it is approved, then the debtor will make the payments to the trustee, who then pays the creditors according to the plan. The trustee also takes a portion of the payment as compensation, usually about 10%. If the plan is not approved, then the debtor must amend the plan and attend another confirmation hearing. Plans are often rejected because the debtor doesn’t have enough disposable income after paying living expenses and required payments for nondischargeable debts, such as child support, to make the intended payments. After completing the repayment plan and only after completing the repayment plan the debtor receives a discharge.

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