We know that debt problems can arise for a variety of reasons, many of which are beyond our control. Unemployment, divorce, loss of a spouse, and unexpected medical bills can contribute to financial difficulties and make a person feel helpless and hopeless. We will work with you to take control of your financial future. If you have no other way to pay your creditors, personal bankruptcy may be the best alternative.

The United States Congress provides a process whereby individuals, burdened by excessive debt, can obtain a fresh financial start and pursue newly productive lives unimpaired by past financial problems. It is an important alterative for persons who are deep in financial difficulty. The federal bankruptcy laws were enacted to provide debtors with a fresh start and to establish equity and ranking among all the creditors who are clamoring for the debtor's limited resources. Bankruptcy helps people avoid the kind of permanent discouragement that can prevent them from ever re-establishing themselves as productive and hard-working members of society.

Chapter 7 bankruptcy and Chapter 13 are legal proceedings to afford those in financial crisis with the opportunity to free themselves of debt and start anew.

Also known as “The Fresh Start Provision,” Chapter 7 Bankruptcy is the most common form of consumer bankruptcy. Congress created Chapter 7 bankruptcy as a viable alternative for persons in financial trouble. When not able to overcome financial problems that were self-created or due to circumstances beyond one's control, Chapter 7 allows persons to obtain a "Fresh Start" in their financial dealings.

A person who owes money and files a bankruptcy case is called the "debtor". The debtor files a 25- to 40-page bankruptcy petition or case that contains information about the debtor's income, debts, property owned, and recent payment history. A husband and a wife may file together in the same case. At the present time, people who reside together but are not married are not allowed to file bankruptcy together.

Once the petition is filed with the Bankruptcy Court, the debtor receives instant legal protection from their creditors. This protection is called the “automatic stay,” and it prevents creditors from taking additional actions against the debtor.

The debtor's property rights are reviewed by the U.S. Bankruptcy Trustee assigned to the case who views the property as an "estate". The debtor is allowed to "exempt" or keep most, if not all, of his property pursuant to law. Those assets that are not exempt are sold by the Trustee, and the proceeds are paid to the creditors.

There are many rules within the U.S. Bankruptcy Code that control the outcome of a bankruptcy case. If a Chapter 7 case is filed correctly, the debtors will receive a "discharge" of most, if not all of their unsecured debts. Not all debts are forgiven or discharged. Secured debts such as mortgages and car payments as well as many tax debts, student loans, criminal fines or penalties, DWI personal injury damages, alimony, and child support awards are not discharged. In addition, the debtor is usually able to “reaffirm” their car and home mortgage debt, thereby retaining those assets, along with the payments, if desired.

Chapter 7 bankruptcy is a tremendous tool for people who are struggling with debt issues and have limited resources to deal with the problem. The Fresh Start aspect of Chapter 7 Bankruptcy really can give a person a new beginning by stopping phone calls, letters, lawsuits, garnishments and payments to creditors.

Chapter 13 bankruptcy is called "wage-earner reorganization”. Chapter 13 is similar to a business or corporation going into bankruptcy that remains in business during the bankruptcy. A Chapter 13 is frequently filed if the debtor has unexempt assets or assets with equity. In addition, a Chapter 13 is filed when the debtor has become delinquent with his mortgage payments and needs the protection of the bankruptcy court to stop a foreclosure and catch up with the arrearage. You must have regular and stable income to qualify for Chapter 13. In a Chapter 13 case, the debtor is required to pay his excess income to the Trustee, who distributes the funds to the creditors.

During the administration of the Chapter 13 plan, the debtor is protected from the creditors and all of their actions such as phone calls, letters, lawsuits and garnishments. A Chapter 13 plan may only run between 36 and 60 months.

At the completion of the Chapter 13 plan, the debtors also receive a discharge similar to Chapter 7 in that most remaining debts not repaid in full are discharged or forgiven. Chapter 13 Bankruptcy is the only consumer bankruptcy to save your home or car if you are behind in your payments. Chapter 13 also allows you to reorganize tax payments with the taxing authorities such as the IRS.

Bankruptcy entails a complex set of laws that are influenced by particular situations, so we recommend involving an attorney early in the process so that you understand all of your options. Bankruptcy is an important decision that should be made after considering all available alternatives. Many of our clients have expressed their frustration in attempting to work with creditors to resolve their debt situation. Some clients who have made honest attempts to work out their debts have reported that they were often ignored or even threatened by their creditors. With a qualified attorney on their side, our clients take the first important step to financial health and well-being.

Our attorneys are committed to providing aggressive, high-quality legal services to help you with your difficult situation. Please call the Law Offices of David A. Looney at 330-785-3337, and get a fresh start today, or save time with our online Contact Form.