We understand that there are many reasons for financial difficulties, such as the loss of a job, the death of a breadwinner, or too many credit card purchases. Money problems can be emotionally wrenching and may seriously damage family relations. However disturbing the idea of bankruptcy might initially seem, the fact is bankruptcy laws are there to help those who are unable to pay their bills. The following information discusses and reviews your alternatives under the bankruptcy laws. The attorneys at the Humble Law Offices can advise you about your options so that you can get the maximum advantage available to you by law.   Choosing a bankruptcy option: 7 vs. 13 Starting bankruptcy proceedings Dealing with creditors Working with your trustee Keeping your property Effects of bankruptcy Fees and expenses A legal solution Choosing a Bankruptcy Option: 7 vs. 13 There are two basic options available to consumers under the bankruptcy laws: chapter 7 and chapter 13. The major benefit of a chapter 7 is to "discharge" or get rid of unsecured debt such as credit cards and medical bills. You will be allowed to keep certain kinds of property under the exemptions allowed by federal and/or state laws. The definition of "exempt property" differs in each state and usually includes your home, car, clothing, furniture, household appliances, and tools of your trade -- each to a certain dollar amount. While a chapter 7 bankruptcy is appropriate under the right circumstances, its use is limited in comparison to a chapter 13. A chapter 13 can be used to protect "unexempt property." In a chapter 13, you pay a portion of your monthly income to a trustee for distribution to your creditors. A repayment plan is useful when you are behind on your home mortgage payments, taxes, or a car loan. A chapter 13 may be in effect from three to five years. It normally allows you to pay less than you owe. The extended payment period allows you to make smaller payments. You will be allowed to keep part of your monthly income to pay for living expenses like food, clothing, rent/mortgage, and medicine. To qualify for a chapter 13 repayment plan, you must have regular income, and your unsecured debts must not exceed $250,000. If your unsecured debts exceed $250,000, you may be able to qualify for a repayment plan under chapter 11. Proceedings under chapter 11 are much more complicated and expensive (but not more powerful) than those available under chapter 13. Many law firms do not offer a chapter 13 bankruptcy option because of the extensive law office administration required. However, the attorneys at the Humble Law Offices are happy to always offer this option. A "chapter 20 bankruptcy" is an attorney-created combination of a chapter 7 and a chapter 13. However, it is extremely rare for the savings of a chapter 20 to more than offset the additional attorneys' fees. In other words, we will only recommend a chapter 20 if it is in your best interest, not ours. After completing a chapter 7, you may not start another chapter 7 for six years. There is a minimal waiting period after a chapter 13. The attorneys at Humble Law Offices can review your situation and advise whether to seek a chapter 7 or chapter 13. The best bankruptcy alternative for you depends on a number of variables, including the source of your income, the amount and types of your bills, your desire to protect your cosigners and guarantors, the equity you have in your property, and what property you wish to keep. We will be happy to give your financial situation careful consideration and explain your rights fully, but the decision to file is left to you. Starting Bankruptcy Proceedings Bankruptcy proceedings begin with the filing of bankruptcy forms (a bankruptcy petition) at the federal courthouse. We must disclose all of your property regardless of whether you wish to keep it. The forms are comprehensive and include thorough lists of your income sources, property, debts, and living expenses. About one to two months after filing, a meeting of your creditors will take place. You will be required to appear at this meeting with your records. Although most creditors do not attend, those who do can question you about your income, property, and debts. The main purpose of this questioning is to confirm that the information in your bankruptcy forms is correct and complete. The attorneys at the Humble Law Offices will prepare the bankruptcy forms, attend the meeting with creditors, and serve as your advocate with the judge, trustee, and creditors. In addition, unlike many other law firms, we will not require you to fill out numerous client forms. Dealing with Creditors The attorneys at the Humble Law offices can help you deal with your creditors before, during, and after bankruptcy proceedings. Before starting bankruptcy proceedings, the law protects you from creditor harassment. Bill collectors may not contact you at unreasonable times at home, and they may not embarrass you by telling your friends, relatives, or employers about your debt. Bill collectors may not contact you at work if they know that your employer disapproves. If you have a lawyer, bill collectors may only contact your attorney. During bankruptcy proceedings, you will receive additional protection from bill collectors. At the beginning of the proceedings, the court will order your creditors to stop their collection activities, including lawsuits (i.e. forclosure), wage garnishments, repossessions, and all telephone calls demanding payment. This is known as an "automatic stay" pursuant to section 362 of the Bankruptcy Code. It also is unlawful for your employer to fire you for seeking bankruptcy protection. After the bankruptcy proceedings have been completed, you must take care when dealing with creditors. Some creditors may try to collect debts that were discharged by the bankruptcy proceedings. These creditors may ask you to renew the debt by signing an agreement to pay it. Consult the attorneys at the Humble Law Offices when you are contacted by creditors so that you do not inadvertently obligate yourself to pay an old bill that was discharged by your bankruptcy proceedings. Working with Your Trustee The bankruptcy court will appoint a trustee for your case shortly after bankruptcy forms are filed. In a chapter 7, the role of the trustee is to sell your unexempt (or unprotected) property and distribute the proceeds to your creditors. The trustee also can set aside preferential transfers and/or fraudulent transfers made to creditors or others within 90 days to seven years prior to the bankruptcy proceedings. The trustee also will determine which items of your property are exempt from sale to pay your debts. In a chapter 13, the trustee coordinates the arrangements between you and your creditors. The trustee collects payments from you to distribute to your creditors. The trustee also is responsible for approving any new credit obligations on purchases over $250 that you may wish to undertake before the completion of your chapter 13. Keeping Your Property This is where the attorneys at the Humble Law Offices truly shine. We pride ourselves in devising the program best suited to you, so that you may keep the property you wish at the lowest overall cost. Effects of Bankruptcy The end of your bankruptcy proceedings can provide you with a "fresh start." The court order will end your responsibility for dischargeable debts. A chapter 7 normally will not affect debts such as alimony, child support, educational loans, taxes, or a debt that you incurred by deliberately injuring someone. However, a chapter 13 may address some of these issues. After the bankruptcy is completed, your creditors may no longer try to collect the discharged debts. Your bankruptcy proceedings can be noted on records for up to 10 years after your filing. However, you should consider that even late payments are noted on your credit report for seven years. 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 a credit card. Surprisingly, since you cannot file a chapter 7 again for six years, it may be easier for you to obtain a mortgage or installment credit (for an auto or home appliance), and you no longer have your old debt weighing you down. However, some financial institutions like debtors to file chapter 13 because they believe it shows an attempt to repay former creditors. An application for such credit sometimes is easier if you wait at least a few months from discharge before applying and show a history of paying bills on time after the bankruptcy. However, do not be afraid of attempting to re-establish credit, because it is becoming easier every day. Fees and Expenses The bankruptcy courts currently charge an administrative fee of $175 to file a chapter 7 and $160 to file a chapter 13. The fee is paid to the clerk when your bankruptcy forms are filed at the courthouse. The fee charged by your attorney will depend on his or her expertise and 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. The attorneys at the Humble Law Offices handle the most bankruptcies in southwestern New York - bar none. Yet our fees can be as low as half of those "big city" attorneys' fees. A Legal Solution 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 the attorneys at the Humble Law Offices will help you preserve most, if not all, of your property. The attorneys at the Humble Law Offices can advise you about your bankruptcy options and help you make the best of your situation. If you cannot manage your bills, call the Humble Law Offices immediately to learn about your rights and avoid missing advantages that can be lost with the passage of time.    || Bankruptcy || Personal Injury || || Consumer Credit Counseling || || Attorney Profile || Contact Info || Home ||   Humble Law Offices * Phone 716-664-2889 E-mail shumble@humblelaw.com