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Bankruptcy

CLIENT FOCUSED BANKRUPTCY PROTECTION

Hemming P.C. offers bankruptcy services from a highly experienced bankruptcy attorney. The office can assist you with filing for bankruptcy protection, or better yet, help you decide if there is a more advantageous option for you. While bankruptcy can be a very powerful financial tool, it certainly is not an action that anyone should lightly undertake. One should carefully analyze their individual financial condition with a skilled bankruptcy lawyer to ensure that this is your best alternative. At Hemming, P.C., you will have an opportunity to review your specific situation with such an attorney and receive the assistance that you need to help you make the best decision possible.

Bankruptcy can often stop foreclosure proceedings and wage garnishments. It can remove liens on a property. Medical bills, utility bills, credit card debt and deficiency judgments on a repossessed automobile can often be discharged if one qualifies for bankruptcy. A consultation with our firm can help you decide whether your urgent financial situation can be helped by initiating a bankruptcy action.

CHAPTER 7 vs. CHAPTER 13

Most individuals file either chapter 7 or a chapter 13 bankruptcy. Chapter 7 is commonly referred to as a “liquidation”, where the petitioner has a legal obligation to list all assets and all liabilities. In a chapter 7 case, all assets that are not protected with either a state or federal exemption are turned over to the bankruptcy trustee for sale or liquidation. On the other hand, if all of your assets are able to be protected pursuant to the pertinent statutory exemptions, then a chapter 7 bankruptcy case will discharge all of the qualifying debts that you owe without requiring you to pay anything to the creditors.

One of the determining factors in deciding which bankruptcy chapter is appropriate is which assets, if any, are left without the protection of an exemption. If any assets are left without the protection of an exemption, then one may consider the option of filing a chapter 13 bankruptcy case. Additionally, one has to pass the Means Test in order to qualify to file for chapter 7. The Means Test is designed to eliminate the chapter 7 option for debtors who have too much disposable income. To accomplish this goal, the petitioner’s monthly income is compared to the income of others with the same family size living in your geographic location. If your income exceeds the mean income for your locality, and you have too much disposable income, you may consider chapter 13 bankruptcy.

Chapter 13 is often referred to as a “reorganization” of debt. The goal of a chapter 13 proceeding is to prevent a debtor from losing any property through liquidation. This goal is often possible to achieve even if the debtor’s assets are not protected with a statutory exemption. However, unlike a chapter 7 case, the debtor in a chapter 13 can be obligated to pay back a portion of the obligations owing to certain creditors over a court approved repayment period. The amount of the recurring payment by the debtor is determined by calculating one’s disposable income. Further, the amount that one has to repay can also be dependent upon the type of creditor. That is, debts owed to secured creditors (e.g. a mortgage), priority creditors (e.g. taxes owed to a governmental entity), and unsecured creditors (e.g. credit cards and personal loans) are treated differently in the eyes of the court.

While chapter 13 is more complicated, it can be a very important financial tool. If you are behind in your mortgage payments and want to save your home from foreclosure, a chapter 13 case might be an appropriate consideration. If one wants to retain their home, generally one would have to pay off all arrears owed to the mortgage company within the chapter 13 plan period. However, if your mortgage balance exceeds the value of your residence, and you want to discharge any junior liens (e.g. a second mortgage), a chapter 13 case may be able to help you do so. Under certain circumstances, one may even be able to reduce the amount of a car loan to the current value of the vehicle in chapter 13. For these reasons and many others, it is very important to first determine one’s particular needs before deciding which bankruptcy is appropriate. A qualified bankruptcy attorney at Hemming, P.C. can help you choose the best option and assist you throughout the entire bankruptcy process.