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Chapter 7 Bankruptcy Explained

Choosing to file for bankruptcy can be a difficult decision, but living under the weight of debt can be debilitating. Further, bankruptcy can be a confusing area of law and there are many myths and misinformation floating around about bankruptcy.

Here at the Law Offices of Barbara B. Braziel we help hundreds of families, just like yours, file for bankruptcy protection every year.

Chapter 7 Bankruptcy Explained

Chapter 7 Bankruptcy eliminates credit card debts, medical debts, and other types of debt. In fact, Chapter 7 eliminates most unsecured debts. Unsecured debts are debts that are not backed by anything. Meaning they do not have property attached as collateral.

It is our mission to ensure that you understand the power and benefits of Chapter 7 bankruptcy. We’re here to answer all of your questions. Call us right now (912) 351-9000 to schedule a free consultation.

Benefits of Chapter 7 Bankruptcy

  • Erases most unsecured debts: including credit card debt and medical bills.
  • Stops all collection action.
  • Stops harassing phone calls from creditors.
  • Stop wage garnishments and bank levies.
  • Stops lawsuits filed by creditors.
  • Depending on your specific situation you will most likely be able to keep your car and your home. It is more likely that you can keep your car or home if your payments are current and there is not significant equity.

Chapter 7 bankruptcy might be the solution to your debt problems. However, depending on your specific case, you may still owe on some debts after bankruptcy, such as newer tax debts and student loans. Also, Chapter 7 cannot help you catch up on mortgage arrears or missed car payments (though Chapter 13 bankruptcy can).

Filing for bankruptcy will adversely affect your credit score in the short term; however, if you have already fallen behind on paying your debts, your score has likely already decreased.

Qualifying for Chapter 7 Bankruptcy

Qualifying for Chapter 7 bankruptcy was made more difficult in 2005 when congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). To qualify for Chapter 7 debtors must have an income below the state median for their household size, or if above the median, must pass the Means Test.

When you hire us to represent you, it is our job to determine if you are eligible for bankruptcy relief.

Costs of Filing Chapter 7 Bankruptcy

Those costs of filing for Chapter 7 include: court filing fees, mandatory credit counseling fees, and attorneys fees.

When we meet for a free consultation, we will go over all of the costs together. There will not be any surprise fees or costs down the road.

After Filing for Bankruptcy

At the conclusion of a Chapter 7 bankruptcy you will not be buried under the weight of debt. You will no longer receive harassing phone calls from creditors. You will have a fresh start. Contact us today to schedule a free consultation to learn how bankruptcy can help you and your family.

The Law Offices of Barbara B. Braziel proudly serves Savannah, Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Ludowici, Springfield, Pembroke, Brooklet, and Garden City, GA.

 

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

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Student Loans are Not Erased in Bankruptcy

In 2011 our nation’s student loan debt passed the $1 trillion mark. Student loan debt has exceeded credit card debt since 2010. A number of financial experts say that we’re in a student loan crisis. Many students leave school saddled with a debt load that isn’t affordable on their entry-level salaries.

As the law stands, student loans are nondischargeable in most cases and are not erased in bankruptcy. This means that students loans must be paid back even after successfully filing for bankruptcy.

Bankruptcy May Still Help You If You’re Struggling with Student Loan Payments

If you’re struggling to make your student loan payments on top of credit cards, medical debt, and other monthly living expenses, bankruptcy may help you be able to better afford your student loan payments.

Bankruptcy can erase your unsecured debts, including your credit card and medical debts. Although bankruptcy may not erase your student loans, it can free up funds. The money you were using to pay monthly credit card and medical bills can then be directed toward your student loan payments.

Students Loans Have Repayment Options

If you’re struggling with monthly student loan payments, we encourage you to reach out to your lender(s)! Many student loan lenders offer options to lower monthly payments or pause payments for a short amount of time.

We encourage anyone with student loans to explore income based forgiveness programs for government backed loans.

Also, federal student loans have the options of deferment or forbearance that allows you to temporarily postpone or reduce your monthly payments. Be mindful to understand how these options will impact your overall repayment plan and interest rate. Consider too that your total amount owed will increase, typically including compounded interest fees.

We Offer Free Consultations

To discuss your financial situation and whether or not bankruptcy is the right choice for you contact us for a free consultation!

Follow the Law Offices of Barbara B. Braziel on Facebook for money saving tips and information on getting out of debt!

 

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

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The Power of the Automatic Stay and How It Helps You

As soon as you file for bankruptcy, all collection action against you must stop.

The automatic stay puts an end to collection phone calls, a mailbox stuffed with overdue bills, law suits, wage garnishments, and any other debt collection action against you. The automatic stay is powerful.

The automatic stay is a provision in the U.S. Bankruptcy Code that makes it illegal for creditors to attempt to collect on debts from a person who has filed for bankruptcy protection. There are only a few exceptions to the automatic stay.

 

The Automatic Stay Begins As Soon As Your Bankruptcy Case Is Filed

As soon as you file for bankruptcy your creditors must stop calling you, billing you, or taking any measures to attempt to collect money from you. Any repossession or foreclosure action must stop immediately as well.

 

The Automatic Stay Is Effective For the Life Of Your Bankruptcy Case

With few exceptions, the benefits of the automatic stay remain in effect throughout your bankruptcy case. At the conclusion of a successful bankruptcy, you receive a bankruptcy discharge. The bankruptcy discharge is a court order that says your debts are discharged. This means you are no longer personally liable to pay back your debts. Once you have your discharge, your creditors cannot legally attempt to collect any discharged debts from you, and the automatic stay is no longer necessary.

In rare cases the bankruptcy judge will lift the automatic stay at the explicit request of a creditor. In such cases, the creditor must file the appropriate paperwork and you must be given the opportunity to fight it.

 

Creditors Must Cease and Desist from All Collection Action

The automatic stay is a powerful right granted to debtors. Once you file for bankruptcy protection, your creditors are not allowed to:

  • Call you or send you bills
  • Garnish wages
  • Levy bank accounts
  • Sue you for unpaid debts
  • Move forward with a pending law suit
  • Repossess your car (at least not right away)
  • Foreclose on your home (at least not right away)

 

Exceptions to the Automatic Stay

There are a few rare exceptions to the automatic stay. These exceptions are enumerated by Congress in the U.S. Bankruptcy Code. The automatic stay exceptions include family law proceedings relating to divorce or parenting, collection on ERISA-qualified pension loans, IRS tax audits, demands for tax returns, or assessment of tax liabilities. However, the IRS must cease and desist from collection action for tax debts while the automatic stay is in effect.

 

The Automatic Stay Does Apply to Co-Debtors In Some Instances

The automatic stay may apply to other people who may have co-signed a loan with you.

If you have a loan or line of credit with someone else, the creditor is not allowed to continue collection action against an individual co-signer without court approval in most instances.

Note that if you file a joint bankruptcy petition with your spouse, the automatic stay will stop tax collection action against both of you. However, if only one spouse files for bankruptcy, collection action by the federal or state government for tax debt may legally continue against the non-filing spouse.

 

What Happens If A Creditor Violated the Automatic Stay

Any continued collection action against you is a violation of federal law. If you’ve filed for bankruptcy and a creditor continues to attempt collection, or even contacts you to attempt settlement, contact your bankruptcy attorney immediately.

Make sure to keep excellent records of the dates, times, names of people with whom you spoke, and any other evidentiary support. You may be able to make a recovery against a creditor who willfully continues to violate the automatic stay.

Follow us on Facebook to learn more about how to stop creditor harassment!

We are here to stop creditor harassment, get you out of debt, and help you gain the financial freedom you deserve. Call us today at (912) 351-9000 or contact us via the web to schedule a free consultation.

The Law Offices of Barbara B. Braziel proudly serve people in Savannah, GA and the surrounding areas.

 

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

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The Differences Between Chapter 7 and Chapter 13 Bankruptcy

The two most common types of bankruptcy filed by individuals or married couples are Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 7 bankruptcy erases all or most of your debts, without a repayment plan, and in general allows you to keep most or all of your personal belongings. Chapter 13 bankruptcy is a reorganization of debts, creates a three to five year repayment plan, and also allows you to keep most or all of your personal belongings.

 

The “chapters” come from the United States Bankruptcy Code. There are benefits and drawbacks to both Chapter 7 and 13 bankruptcies. And in fact, both chapters offer many of the same benefits.

 

Chapter 7 Bankruptcy

Chapter 7 eliminates credit card debt, medical debt, and most unsecured debts. Unsecured debts are debts that are not backed by anything. Meaning they do not have property attached as collateral. Generally, it is the simplest and quickest form of bankruptcy. And takes roughly four to six months to complete.

 

The benefits of Chapter 7 bankruptcy include:

  • Erases most unsecured debts: including credit card debt and medical bills.
  • Stops harassing phone calls from creditors.
  • Stops wage garnishments.
  • Stops lawsuits filed by creditors.
  • Depending on your specific situation you will most likely be able to keep your car and your home. It is more likely that you can keep your car or home if your payments are current and there is not significant equity.

 

The drawbacks of Chapter 7 bankruptcy include:

  • Chapter 7 Bankruptcy cannot help you catch up on mortgage arrears or missed car payments (though Chapter 13 Bankruptcy can, see below).
  • Filing for bankruptcy will affect your credit score – however, if you have already fallen behind on your debts, your score has likely already decreased.
  • Student loan debts are not generally discharged.
  • Depending on your specific case, you may still owe on some debts after bankruptcy, such as tax debts.

 

 Chapter 13 Bankruptcy

Chapter 13 bankruptcy creates a three to five year repayment plan. The repayment plan gives you a chance to catch up on mortgage arrears, missed car payments, back taxes, and other debts. To qualify, you must have a steady source of income, such as from a job, self-employment, a business, retirement income, or social security.

 

Chapter 13 has many of the same powers as Chapter 7, plus additional powers.

 

The benefits of Chapter 13 bankruptcy include:

  • Stops wage garnishments, stops lawsuits filed by creditors, stops harassing creditor phone calls, and stops automobile repossession.
  • Can stop foreclosure and allow a homeowner to catch up on mortgage arrears.
  • In some cases, allows a homeowner to “lien strip” or eliminate a second mortgage.
  • Creates an opportunity to catch up on missed car payments.
  • Creates an opportunity to catch up on other missed payments, such as back taxes or child support payments.
  • At the conclusion of the Bankruptcy, any remaining credit card debt, medical bills, or other unsecured debts, and some tax debts, are discharged.

 

The drawbacks of Chapter 13 bankruptcy include:

  • Requires monthly payments to the Bankruptcy Trustee. We all understand that unforeseeable things happen. If a plan payment cannot be made, there are processes to address it.
  • You cannot take out a loan while in Chapter 13 Bankruptcy without prior permission from the Bankruptcy Court.
  • Student loan debts are generally not discharged.
  • Depending on your specific case, you may still owe some debts after bankruptcy, such as tax debts.

 

Bankruptcy is a Powerful Tool

Both Chapter 7 and Chapter 13 are powerful tools to stop harassing phone calls, stop collection actions against you, and help you get out of debt.

At the Law Offices of Barbara B. Braziel we file hundreds of Chapter 7 and 13 bankruptcy cases every year. But our clients are never just a number. You will not be left in the hands of a paralegal. You will have access to your attorney throughout your bankruptcy case.

We are here to give you the fresh start you deserve. Call us today at (912) 351-9000 or contact us via the web to schedule a free consultation.

 

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

READ MORE