At the Law Office Raphael Darrington, our attorneys help individuals who are experiencing financial hardships caused by personal financial decisions or unforeseen circumstances. Many individuals lose their jobs or incur medical expenses that become too expensive to repay. We only promote bankruptcy as a final effort when dealing with debt repayment. Our firm is knowledgeable with contacting creditors and negotiating repayment plans if this will be more advantageous for our clients. In many cases, bankruptcy is a viable option for individuals to take the necessary step towards financial recovery by eliminating all unsecure debt. Some individuals are delinquent with secured debt and will have to enter a repayment agreement. No matter what your reasons are for filing for bankruptcy, we can help. Our clients are our top priority and we strive to assist our clients throughout the Bankruptcy Process.
Types of Bankruptcies we handle:
Is a form of bankruptcy that eliminates all unsecure debts such as: hospital bills, personal loans, pay day loans, medical bills, utility bills and other debts not backed by assets. Typically it is the default bankruptcy people envision when thinking of bankruptcy. Individuals with secure debt can still apply for Chapter 7 Bankruptcy, however they must catch up payments on secure debt and leave the asset out of bankruptcy. Additionally, there are exemptions given to individuals who own assets outright such as homes and vehicles. These exemptions allow individuals to keep the equity in their assets, while simultaneously allowing them to file for Chapter 7 bankruptcy protections. Some debts are not dischargeable under any circumstances such as: alimony, child support and most student loans. It’s important to note this if you are contemplating bankruptcy based upon one the listed items.
Chapter 7 Bankruptcy is primarily suited for individuals with lots of unsecure debt where an individual’s personal finances do not allow the individual to systematically repay his or her obligations. An important function of bankruptcy is the automatic stay. The automatic stay forces creditors to stop collection practices and violations are punishable under the FDCPA. Bankruptcy courts do this in response to an individual filing a petition with the courts and creditors are given an opportunity to contest this at the meeting of creditors. Bankruptcy should not be taken lightly and the court imposes mandatory Credit Counseling to ensure you are taking the requisite steps towards financial stability. Lastly, the Bankruptcy Trustee often asks questions to probe your eligibility for bankruptcy and to make sure you are acting under your own volition.
Chapter 13 Bankruptcy
Unlike Chapter 7 bankruptcy, a Chapter 13 bankruptcy involves the repayment of an individual’s debt over a three to five year period. Chapter 13 is also known as a wage earner’s plan. The payments are based on what the individual can afford. Often times the creditors end up receiving a small portion of what they are owed. Once the repayment period is up, individuals are free from their debts.
To qualify for a Chapter 13 you must pass two tests. The first test is the Best Interest Test, which requires that unsecured creditors receive at least as much payment as they would get if you filed a Chapter 7 rather than a Chapter 13. The second test is the Best Efforts Test. This test requires that you pay all your disposable income (the amount left over after paying reasonable living expenses) to the trustee for at least the first 36 months of your plan.
There are several benefits to filing Chapter 13 Bankruptcy. Like Chapter 7, you are awarded the automatic stay when you initially submit your bankruptcy petition. With Chapter 13 Bankruptcy, you can pay taxes over time, potentially with no interest and penalties. Past due alimony and child support can be spread out and paid over during the repayment period. You can make your house and car payments up to date over the life of the plan. Your payments on some secured loans can be reduced to the value of the collateral. You can retain ownership of nonexempt property. You can protect a cosigner from creditor harassment by proposing to pay the cosigned debt over the length of the plan.
Call today for your FREE Consultation!!!