There are many reasons people and businesses file for bankruptcy. One is to fairly distribute your assets to your creditors. Another is to protect yourself from your creditors, especially if your creditors are harassing you.
If you are an individual or have a small business and are wondering if filing for bankruptcy is right for you, we can help. A Columbus bankruptcy lawyer from Farmer & Morris Law, PLLC may be able to help you understand what bankruptcy options are right for you and guide you through the filing process.
For a free consultation on your case with a member of our team, call Farmer & Morris Law, PLLC today at (828) 286-3866.
Understanding the Different Types of Bankruptcy Filings
There are many different types of bankruptcy you can file for. Chapter 7 and Chapter 13 bankruptcy are often used by individuals and businesses. Chapter 11 bankruptcy is called reorganization bankruptcy, and Chapter 12 bankruptcy for family farmers. Farmer & Morris Law, PLLC assists clients with each of these types of bankruptcy.
The type of bankruptcy you should file for depends on your unique circumstances. Many people who file for Chapter 7 bankruptcy do not have any non-exempt assets. All of their qualifying debts may be discharged, and they may be able to retain all of their assets. However, this is not always the case, so here we provide details on Chapter 7 and Chapter 13 bankruptcy and how to choose which is best for you.
For a free legal consultation with a bankruptcy lawyer serving Columbus, call 828.286.3866
Chapter 7 Bankruptcy
Chapter 7 bankruptcy filing provides one path of recourse to people who have high levels of personal debt and struggle to make payments.
How It Works
When you file for Chapter 7 bankruptcy, eligible debts are fully discharged — which means the debts are forgiven and do not have to be repaid. Most people filing Chapter 7 bankruptcy are able to exempt and keep all of their assets. Non-exempt assets may include extra vehicles, a second home or a vacation home, stocks, bank accounts, certain investments, and possibly other high-value items.
The “Means Test”
You may file for Chapter 7 bankruptcy if your annual earnings are lower than the median income for households of your size. Earning that much means you may pass the means test. Even if you do not pass the means test, you may be able to file for Chapter 7 bankruptcy if you can show that you do not have or will not have enough money at the end of the month for basic living after making your monthly payments.
The Filing Process
When you file for Chapter 7 bankruptcy, a court order called an automatic stay is implemented that prevents your creditors from attempting to collect their money from you. Then, a trustee who is assigned to you will meet with everyone you owe money. This is called a 341 meeting or a creditors meeting. In this meeting, you may be required to provide details on your financial holdings, assets, and income, as well as on your financial obligations.
After the 341 meeting, you may be eligible for what is called a Chapter 7 discharge. Your case will be formally closed a short time later.
A Columbus bankruptcy lawyer from Farmer & Morris Law, PLLC can guide you through the Chapter 7 bankruptcy process and determine if it is right for you. For more information and a free consultation on your case with a member of our team, call Farmer & Morris Law, PLLC today at (828) 286-3866.
Columbus Bankruptcy Lawyer Near Me 828.286.3866
Chapter 13 Bankruptcy
You may be able to apply for Chapter 13 bankruptcy if you do not pass the means test for Chapter 7 bankruptcy.
How It Works
Instead of liquidating your nonexempt assets as is done with Chapter 7, in Chapter 13 bankruptcy, you create a financial plan that is overseen by a trustee to repay some of all of your debt over a number of predetermined years. Although it is a repayment plan, some of your debt is typically forgiven in the Chapter 13 process. You may be required to follow and abide by financial limitations as deemed fit by the trustee and Bankruptcy Court throughout your repayment period. Filing for Chapter 13 bankruptcy may give its filers more freedom and leeway in retaining important life assets than filing for Chapter 7 bankruptcy, per the U.S. Court System.
The Filing Process
You are required to complete a brief financial counseling course before you are allowed to file for Chapter 13 bankruptcy. You may also need to provide information on or proof of the following to file for Chapter 13 bankruptcy:
- Financials on the debts you owe
- Details of your income
- Proof of tax filings for the previous four years, as per the Internal Revenue Service (IRS)
- Proof of ID and Social Security
- An itemized list of your assets and expenses
- Proof of completion of the financial counseling course
If you are approved, you must make your regular payments to your trustee.
Contact Farmer & Morris Law, PLLC Today
There are pros and cons with filing for bankruptcy, and the path that is best for you may depend on the specifics of your case. It can provide you with relief from harassment, but bankruptcy can also affect your interpersonal relationships, so filing decisions should be made carefully.
A Columbus bankruptcy lawyer from Farmer & Morris Law, PLLC may be able to:
- Help you understand your options and the implications of each type of bankruptcy
- Carefully review the details or your finances and future needs
- Provide you with legal advice and recommendations
- Manage all paperwork and deadlines on your behalf
- Communicate with other parties on your behalf
For a free consultation on your case and our services with a member of our team, call Farmer & Morris Law, PLLC today at (828) 286-3866.