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 we strive to assist our clients throughout the Bankruptcy Process.
Types of Bankruptcies we handle:
Chapter 7
Is a form of bankruptcy that eliminates all unsecure debts such as: hospital bills, personal loans, pay day loans, medical bills, utility bills 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 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 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.
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(973)558-5469
