Keeping Your Property
Your lawyer will advise you about the protection available for your property with a bankruptcy proceeding. For example, in a liquidation proceeding, the bankruptcy laws allow you to keep your exempt property.
Prior to beginning bankruptcy proceedings, your lawyer may advise that you sell some of your nonexempt property and use the cash to purchase exempt property. Although you may convert your nonexempt property into exempt property, you will be subject to severe penalties if you try to hide your property.
In a liquidation proceeding, you may be able to keep mortgaged property like a home or car if you "reaffirm" your loan with your lender. Reaffirming the loan means that you agree to pay it in full. The "reaffirmed" loan will not be affected by the discharge that you receive at the completion of the bankruptcy proceedings. Any property that you receive after 180 days from the start of the bankruptcy proceedings is yours to keep, including inheritances, gifts and life insurance. Your lawyer may recommend that you speed up your bankruptcy filing if you expect to receive a substantial amount of property in the near future.
Effects of the Bankruptcy
The end of your bankruptcy proceedings can provide you with a "fresh start." The court order will end your responsibility for dischargeable debts. The order will not affect nondischargeable debts such as alimony, child support, educational loans, taxes or debts that you incurred by deliberately injuring someone. After the bankruptcy, your creditors may no longer try to collect the discharged debts.
Your bankruptcy proceedings will be noted on credit records for up to 10 years after your bankruptcy filing. During that time, lenders, stores and finance companies may consider your bankruptcy among the many factors they review when you apply for a loan or credit card. Surprisingly, since you cannot file again for Chapter 7 for 6 years, it may be easier for you to obtain a mortgage loan or installment credit for an auto or home appliance. An application for such credit is easier if you wait at least a year before applying for credit and show a history of paying bills on time after the bankruptcy.
Fees and Expenses
The bankruptcy courts currently charge a small filing fee to cover court costs. The fee is paid to the clerk when you file your bankruptcy forms at the courthouse. Additionally, the trustee will receive a fee of about 10% of the amounts paid to your creditors if you choose a repayment plan.
The fee charged by your lawyer will depend on the complexity of your case. In bankruptcy matters, a lawyer's expertise usually results in savings that far outweigh the amount of legal fees.
Conclusion
You may need the protection of the bankruptcy laws if you are unable to pay your bills on time. Bankruptcy proceedings can help protect you against aggressive bill collectors and preserve as much of your property for you as possible.
A lawyer can advise you about your bankruptcy options and help you make the best of your situation. If you cannot manage your bills, call your lawyer immediately to learn about your rights and avoid missing advantages that can be lost with the passage of time.
We have been designated a Debt Relief Agency by Congress under the United States Code, we proudly help people file for bankruptcy relief under the Bankruptcy Code.
