Bankruptcy Overview
The Means Test
Whether you’re eligible to file a Chapter 7 bankruptcy petition is generally determined by your income, household size, and expenses. Most debtors are eligible to file for Chapter 7 bankruptcy, although not all bankruptcy attorneys are familiar with some of the more complicated aspects of the Means Test, which is used to determine eligibility. I can determine whether you’ll qualify to have most or all of your debts discharged through a Chapter 7 bankruptcy.
Chapter 7
If your Chapter 7 bankruptcy petition is granted, your credit card debt, medical bills, unpaid utility bills, and most other types of debt are eliminated. This can give you a fresh start, and in most cases, you will be allowed to keep all of your property. You’ll also have the opportunity to get out of an unaffordable car loan or lease, and depending on the amount of equity you have in your house or apartment, you will not have to sell it. If you have a large amount of equity in your home, then Chapter 13 bankruptcy is generally a better choice.
Chapter 13
If you don’t qualify for Chapter 7 bankruptcy, or if it’s not the right choice for you given the value of your assets, Chapter 13 bankruptcy might be the right option for you. Under this chapter, you can create a 3 to 5 year repayment plan that is based on your disposable income. If you successfully complete your payment plan, the remaining debts are generally eliminated.
Chapter 7 Bankruptcy Benefits
Eliminate Consumer Debt
If your Chapter 7 bankruptcy petition is granted, most types of debt are completely discharged (eliminated). This includes your credit card debt, unpaid medical bills, back-owed rent, utility bills, and many other types of debt. You can also choose to get out of a bad car loan, if you’re willing to give up the car.
Protection from Collectors
& Wage Garnishment
When your bankruptcy petition is filed, the Banrkuptcy Court will issue your creditors an automatic stay. The automatic stay is a powerful tool that puts a stop to all of your creditors’ collection efforts, including phone calls, emails, in-person visits, lawsuits, and other attempts to collect the debt. It also ends wage garnishments for most types of debt, which means that creditors generally can’t take part of your paychecks.
Rebuild Your Credit
Once your debts have been discharged, you’ll be able to rebuild your credit score right away. By using services like Experian Boost, you can start rebuilding your credit score without going back into debt. It is also important for you to understand that home ownership is still possible after bankruptcy, although you will need to rebuild your credit score first.
About My Services
Free Consultation
If you’re considering filing for bankruptcy, and you live in New York or New Jersey, I’ll be happy to provide you with a free consultation to help you figure out whether Chapter 7 bankruptcy is right for you.
I’m available to talk with you on the telephone, by video conference, or in person at my office in New York.
Paperwork
As you might expect, there is a considerable amount of paperwork involved with the filing of a Chapter 7 bankruptcy petition. In order to file your petition, I’ll need to obtain your credit reports, bank statements, other financial documents such as your 401(k) balances (which are protected), your last 6 months of pay stubs, and information about your other debts that might not show up on your credit report. I’ll also ask you questions about your monthly living expenses and your assets, such as any businesses, cryptocurrencies, automobiles, or real estate that you may own.
Flat Fees
Rather than charging an hourly rate, or requiring you to pay the court filing costs separately, I charge one flat fee for your Chapter 7 bankruptcy case. This fee includes providing you with legal advice, preparing your bankruptcy petition, the $335 court filing fee, representation at the Chapter 7 bankruptcy hearing, and answering your questions.
If you are married, you and your spouse may file a joint bankruptcy petition for a modest additional fee. If only one spouse declares bankruptcy, the other spouse would still be liable for the couple’s joint debts, so it is often best for married couples to file joint petitions.
I also offer payment plans for clients who can’t afford to pay my entire fee upfront.
Chapter 7 Filing
Once your Chapter 7 bankruptcy petition has been filed, the Bankruptcy Court will immediately issue an automatic stay. The automatic stay stops creditors from attempting to collect any dischargable debts, ends most types of wage garnishments, and can also end debt collection lawsuits and pause evictions.
If your creditors continue to contact you, I can send them cease and decist letters, at no additional cost, and if creditors violate your rights in actionable ways, I can refer you to attorneys who are experienced in suing creditors who break the rules by illegally harassing bankruptcy petitioners.
While I’m gathering the necessary information from you, obtaining your credit reports, and preparing your petition, you will have to complete a short credit counseling course. Next, I’ll file your Chapter 7 bankruptcy petition with the bankruptcy court that covers the area where you live. I practice bankruptcy law in New York and New Jersey.
After your petition has been filed, the Bankruptcy Trustee will schedule a 341 hearing, which I will prepare you for in advance. This meeting is usually scheduled for about 30 days after I file your petition. In the meantime, I’ll make sure that you’re well-prepared for the meeting, so that there won’t be any surprises. In most instances, your creditors will not attempt to fight against your bankruptcy, due to the costs that would be involved.
Then, we’ll attend your 341 hearing together. Generally, this meeting lasts about ten to fifteen minutes. After the meeting, you’ll have to take a second brief course on financial management. Your debts will be discharged about 60 days after the 341 hearing, if it goes well (as it does in the vast majority of cases.) At that point, you’ll have a clean slate, without your credit card debt, or most other types of debt.
Questions
It’s normal to have questions when you’re thinking about filing a bankruptcy petition, and you may also have questions that arise during the process. You can rest assured that I’ll be there for you, ready to answer your questions throughout the process. You won’t have to wait weeks to hear from me, or play phone tag with paralegals.
Representation
Before the Bankruptcy Trustee can approve you Chapter 7 bankruptcy petition, you’ll have to attend a 341 hearing, which is also known as “the meeting of the creditors.” During this meeting, the Bankruptcy Trustee will ask you various questions about your finances.
Tol make sure that you’re well-prepared for this meeting, we will have a meeting, either in person, via teleconference, or telephone, where I will go over the questions that the Bankruptcy Trustee is likely to ask you. Although not all bankruptcy lawyers hold such meetings, I feel that it is very important in getting the best results for bankruptcy clients.
I will also be there with you during the 341 hearing; my clients never have to face the Bankruptcy Trustee without their attorney.
