Are you receiving creditor calls or worried about mounting bills? A Brandon bankruptcy attorney can help you determine whether bankruptcy is a good option for you. Bankruptcy can be a scary prospect for many, but done with the help of an experienced attorney, the process can be quite simple. Put an end to collections, garnishment and nagging phone calls by learning more about the bankruptcy process below.
How Does Bankruptcy Work?
When you file for bankruptcy, you will file papers in court in a document called a petition. The filing of the petition asks the court to approve a legal discharge which eliminates your obligation to pay certain types of debts. These debts most often include:
- credit cards,
- unsecured loans,
- charged off debt, and
- medical debt.
The petition identifies specific information about you and your financial matters. Once your case is filed, the bankruptcy court and a court-appointed trustee will review your case. In the majority of cases the court grants a legal discharge. This officially eliminates your debt.
Do My Creditors Have Rights in Bankruptcy?
Although the majority of people who file bankruptcy receive their discharge, it is important to understand that the discharge is not automatic. Filing a bankruptcy petition is a legal process and involves the U.S. federal court system. Throughout this process, creditors are afforded some rights. However, in most cases creditor rights are minimal.
Of course, creditors do not want to give up the ability to collect money you owe them. But bankruptcy gives you immediate relief once your case is filed with something called the automatic stay. The automatic stay is a court order that prevents your creditors from acting on lawsuits or garnishments or even contacting you while your case is pending. In most cases the stay lasts for the duration of your bankruptcy.
Generally, the only rights unsecured creditors have is to challenge things they believe might be fraudulent. A good example is buying luxury items on your credit card within a few months of bankruptcy. In these situations, a creditor may file a motion with the court to try and stop the automatic stay. Before filing bankruptcy you want to make sure you understand the correct timing of when to file. Doing so will minimize the rights your creditors might have. The actual timing of your filing bankruptcy can be critical and a Brandon bankruptcy attorney can help. When your bankruptcy case is complete you will receive your discharge and your creditors can no longer contact you.
What Happens After I File Bankruptcy?
Once your case is filed a few things will happen pretty quickly. First, the automatic stay takes effect, banning creditors from contacting you. Next, you will receive a notice from the court for a scheduled hearing called the Meeting of Creditors. This hearing is really more like a meeting. In fact, it is often called the Meeting of Creditors. However, creditors rarely show up. Your Brandon bankruptcy attorney will help prepare you for this meeting and attend with you. At the meeting you will meet with your case trustee and answer questions about what is contained in your petition. In ordinary Chapter 7 cases you will receive your discharge approximately 61 days after the meeting.
What Are the Types of Bankruptcy?
A Brandon bankruptcy attorney can help you better understand which type of bankruptcy is best for you.
There are two types of consumer bankruptcy: Chapter 7 and Chapter 13. Both serve the same purpose, to eliminate debt. The process and length of time is different for each. Chapter 7 allows your consumer debt to be discharged in a manner of months. Obviously, this is preferred by most. But, Chapter 7 requires you to pass the means test. This is a test that compares your disposable income to your state’s median household income for the the same type of household.
Chapter 13 is a repayment plan of your debts and is the best for individuals that have too much disposable income to file Chapter 7. In other special situations, Chapter 13 makes the most sense; for example if you are facing foreclosure or have a lot of tax debt. In Chapter 13 you will repay a portion of your debt in a 3-5 year plan, which must be approved by the court.
Discuss Your Situation With a Brandon Bankruptcy Attorney
At The Golden Law Group, we pride ourselves in putting clients first. We can help you understand what bankruptcy option is best for you. We look forward providing a free consultation and being your chosen Brandon bankruptcy attorney.