What Is Bankruptcy?
Bankruptcy assists debtors who have financial hardships. The two common types of bankruptcies for individuals are:
- Chapter 7. Discharges the debts completely. The debtor may choose to keep his or her home or car and continue to make payments.
- Chapter 13. The debtor pays his debts through a repayment plan. That plan may reduce the amount of interest owed.
What happens when I file?
Once you have filed, an “automatic stay” is in effect. During this time your debtors may not be able to:
- Cannot repossess your car
- Foreclose on your home
- Garnish your wages
- Evict you from your home
Bankruptcy relief
Bankruptcy can discharge overwhelming credit card debt, help you reorganize your debts so that you can make your car payments and give you financial relief. But the bankruptcy court cannot discharge unpaid child support, alimony and tax debt. Student loans cannot be discharged unless a debtor proves that the payments are a burden.
The Bankruptcy Abuse Prevention and Consumer Prevention Act of 2005
Many debtors worried bankruptcy reform passed by Congress would make it too difficult to file for bankruptcy. What the law does is:
- Require credit counseling in some circumstances before a debtor can file for bankruptcy.
- Requires debtors who have the ability to pay back some of their debts to do so. Only those who fall behind their state's median income will not be required to pay back their debts.
- Establishes a “waiting period” between filings. If you have a Chapter 7 discharged or complete a Chapter 13 plan, you must wait eight years before you can file for bankruptcy again.
Stop worrying about your debt
Luftman, Heck and associates will be with you through every step of your bankruptcy. Financial debt is a stressful problem and can cause other problems such as marital tension, health problems and stress on the job. Call us today and let us help you!
The Law Firm of Luftman, Heck & Associates, LLP is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. The information provided on the web site is not, nor is it intended to be, legal advice or an offer to represent you.
