There’s no question that the choice of declaring bankruptcy is a difficult one. Our bankruptcy attorneys at Davis & Williams are here to help. This legal process also has parameters in place to keep you from losing your home, car and other large assets that are valuable to you. Bankruptcy stops garnishments, repossession, and foreclosures.
Filing for bankruptcy can affect your credit score, your business relationships, and your self-confidence. More importantly, filing for bankruptcy can improve your short-term quality of life and well-being. While there are short-term alternatives, personal bankruptcy is generally considered the debt management tool of last resort because the results are long-lasting and far-reaching. Individuals looking for a long-term solution to the stress of unpaid debt should seriously consider this legal option.
What is Bankruptcy?
Bankruptcy is a legal process available for individuals and/or businesses who are unable to pay outstanding debt. Generally, liquidations occur under Chapter 7 Bankruptcy, while reorganization falls under Chapter 13 Bankruptcy. Chapter 7 liquidation, sometimes referred to as debt elimination, is the quickest course of action and is generally preferred for individuals who do not have qualifying income for a Chapter 13 repayment plan. Individuals who maintain a regular source of income are allowed to pursue the reorganization route, where your debt is relieved through a three to five year repayment plan that allows you to pay off your debts under supervision of the Court. Our bankruptcy attorneys at Davis & Williams will consult with you on which options are best when considering your current household income, outstanding debt, property, and any pledged collateral. Learn more on Chapter 7 and Chapter 13 filings here.
What Should I Expect?
If you decide bankruptcy is the way to go, it is important to do it right and understand the steps. Initially, an automatic stay is entered as soon as your petition is filed. This legal action stops most collection actions, including lawsuits and wage garnishments. Automobile repossessions, mobile home repossessions and home foreclosure actions are halted. These protections remain in place so long as your case is open with the court in order to allow you and your legal team to focus on what matters most. A creditor will soon receive notification from the court of the automatic stay and while it may take a couple of days for the creditor to cease on collections, the debtor may clarify their standing of an automatic stay with the creditor. Any creditor or collections service that ignore this court order is breaking the law.
Next, depending on the chapter of Bankruptcy you choose, a bankruptcy trustee will review your finances and determine whether there are any assets that may be used to apply to any debts to creditors. State law allows the exemption of certain real and personal property. In the event all owned property is exempt under state law, the case will be a non-asset case and the unsecured creditors would not receive any payment in a Chapter 7. Often times, equity in your car, home, and personal property will be spared. At Davis & Williams, our goal is ensure proper completion with the courts in anticipation that discharge will be granted. Bankruptcy discharge alleviates the requirement of paying unsecured debts. It is important to note that retaining quality counsel can ensure that a simple mistake or error in the petition submitted to the court does not result in dismissal altogether. This may range from failure to file without a certificate of credit counseling completion to simply failing to provide additional documentation to the court.
Post-Bankruptcy, your case will be rendered a success after receiving discharge or completing a Chapter 13 plan. The next steps taken financially however, will be of utmost importance. Bankruptcy can be put entirely behind you, as long as you proceed through this process with a well-thought-out financial plan for the future. Our attorneys will assist you in developing responsible financial habits and explaining your options post-bankruptcy.
Is There Any Alternative?
Before filing for bankruptcy, check with outstanding creditors to see if they are willing to negotiate and accept reduced payments. A credit report will provide access to your creditor’s and collector’s contact information. If there are any unpaid debts that have not been sent to collections, it is vital to speak with and work on an agreement with your creditor to avoid a negative spike on your credit. Often times, a credit counseling service will assist in managing any outstanding creditors and can also help you negotiate.
Some Credit counseling also offer assistance in the form of debt management. This alternative works similarly to a Chapter 13 repayment plan with one enticing caveat; you will not have to claim bankruptcy. Think “third party” assistance. The downside to these types of repayment services is no guarantee on assisting with all outstanding debts and additional fee collection which could dig you deeper in the financial hole.
Our Attorneys at Davis & Williams have an extensive track record of satisfying clients who inquire about their options for Bankruptcy filing. While most firms take all matters into their own hands, our Bankruptcy attorneys serving Jackson and the State of Mississippi have provided important information below to ensure you understand the duties of a competent, quality Bankruptcy Attorney. Contact Us today for a Free Consultation.
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