Answers from a St. Petersburg Bankruptcy Lawyer
Bankruptcy can be an overwhelming and stressful time for an individual
and/or family. The most important thing when going through a
bankruptcy is to be aware of all options and how the process works. You may feel
uncertain about bankruptcy because of myths or existing prejudices that
you have been taught.
LeavenLaw, we have learned that the main reason for hesitation in regards to bankruptcy
arises from a lack of knowledge or understanding. We have personally seen
the ways that bankruptcy can provide hope and relief for clients from
all walks of life, and we are here to provide you with the information
you need to make an educated decision. Don't hesitate to speak to
a member of our experienced
legal team about your ideas about bankruptcy, and please review the questions and
answers included on this page.
Take a look at some of the most commonly asked questions below:
If you are going through a bankruptcy it is important to have a skilled
bankruptcy lawyer on your side. If you have any other questions do not
contact LeavenLaw today! We offer a free case evaluation.
Bankruptcy is a way for individuals to have some sort of relief from their
debts. A person going through a bankruptcy is termed the debtor and bankruptcy
is a way for a debtor to work out a new plan to repay or wipe out debts.
There are other types of debt relief that can be sought after but there
is a different type of protection when going through a bankruptcy. After
filing all creditors must stop any collection efforts and if they don't
they can be penalized for creditor harassment.
Bankruptcy does not mean you have to give up your home or car. There are
several types of bankruptcy available today that make it possible for
consumers to have some choice regarding their assets. In a
Chapter 13 bankruptcy, you will be able to keep your assets while you pay a small percentage
of your debts, interest free, for a period of three to five years.
Bankruptcy will not ruin your credit for the rest of your life. Once you
have filed for bankruptcy, your credit score will undoubtedly take a dip.
However, by practicing better spending habits and using credit cautiously
and paying on time, you will slowly regain your standing in the credit world.
Creditors tend to consistently try to contact people who owe them money
as an effort to collect. When going through a bankruptcy you have the
ability to make them stop. The court orders an automatic stay when a debtor
files for bankruptcy and this makes it illegal for the creditors to continue
any type of collection effort. If they continue to attempt collection
from you, the
Fair Debt Collection Practices Act (FDCPA) protects you and you may be able to receive statutory damages
of up to $1,000.
Automatic stay is an order that stops collection efforts from all creditors
and collectors when a debtor is going through a bankruptcy. This is done
so that the debtor has time and privacy to regroup and make a new financial
plan. Automatic stay is temporary and only protects the debtor from collection
actions, this does not include third parties. If a creditor violates the
automatic stay order there are monetary penalties that can be rewarded
to the debtor.
Chapter 7 bankruptcy is meant for people who are unable to repay any part of their debts. This
is known as a "liquidation" of debts and most or all of a person's
unsecured debts are eliminated. Any assets that the person has that are
not exempt can be liquidated to pay off creditors. Oftentimes a person's
assets are all exempt so the selling of their assets does not occur. A
person has to qualify for this type of bankruptcy by showing that their
income is not substantial enough to repay debts. This is done by using
a Chapter 7 means test.
means test is the way to determine if a debtor qualifies for a Chapter 7 bankruptcy.
The formula uses a person's income and then their "disposable
income." The means test considers a debtor's current monthly
income which is found by averaging their income over the past six months.
Then the person's monthly expenses are deducted from the monthly income
which will give their disposable income. If their disposable income is
low enough then they may qualify for a Chapter 7 bankruptcy and if not
they may be able to file for a Chapter 13 bankruptcy.
Chapter 13 bankruptcy involves a partial or full repayment of debts. If a debtor chooses to
file for this type of bankruptcy they can create a plan to repay debts.
This bankruptcy generally involves a three to five year repayment plan
that is reasonable for the debtor to complete. When the repayment plan
comes to an end, if the debtor successfully completed all payments, some
dischargeable debts can be wiped out. With a Chapter 13, the debtor will
most likely be able to keep their property and assets because liquidation
will not have to take place. That is if they continue to make their payments,
if they do not then problems can arise.