How Bankruptcy Lawyers Help With Filing

The best way to get accurate information about filing a bankruptcy petition, and under what chapter is most convenient, is through a personal consultation with bankruptcy lawyers. For this consultation to be adequate, the attorney must have all their client’s essential information. For most people, the law allows for two bankruptcy options: A payment plan under Chapter 13 and the total settlement of debts under Chapter 7.

Chapter 13

In a Chapter 13 case, people have the opportunity to make a payment plan, according to their income, which among other things, allows them to protect their co-debtors. This may include alimony arrears and other arrears relating to your mortgage and any vehicles owned. Pretty much, it covers anything a person has purchased under a conditional sales contract.

A Chapter 13 payment plan can last from 36 to 60 months. The term of the plan will depend on the debtor’s income and the debts that need to be paid. There are debts that the person would have to pay in full, for example, if they want to protect co-debtors, or if they need to pay specific contributions.

It will also pertain to helping the debtor to keep their house, car, and other assets with insured debts. However, the rest of the unsecured debts are paid off at a significant discount, or directly, they are not paid.

Chapter 7

Under a Chapter 7, the filer’s unsecured debts are discharged or forgiven, such as personal loans, credit card debts, among others. Mortgages, auto loans, conditional sales on appliances – these are not overlooked. If these debts must be eliminated, the debtor can deliver them to the creditor who financed them, and they will get the discharge. Student loans, food allowances, and taxes for the last three years are not forgiven either.

In a case of liquidation under Chapter 7, the debtor will file the petition alone or with their spouse, or if they are not legally married, both persons can file separate petitions and request the consolidation of their cases. They will present various information sheets that list their assets and debts. The exemptions applicable under the present law will be asked to protect their essential goods. Filer’s must also submit evidence that proves the value of their home and car, and any others secured by a mortgage or lien.