Bankruptcy Facts – Should you file for bankruptcy?

What to Expect

Before you come into the office for your initial consultation, we ask that you complete the provided intake sheet. This form will provide our legal team with an overview of your assets and liabilities, whether or not foreclosure proceedings have been initiated against you, your household income, and other details related to your financial affairs.

During case evaluations, Lead Attorney Lezman will thoroughly review your information and discuss your available options. If our firm agrees that Chapter 7 or a Chapter 13 bankruptcy is the most appropriate method to meet your unique needs, then you can retain our firm to assist you during your bankruptcy process. We will then provide you with paperwork to complete and a list of documents needed to file your petition. Once you have provided all the necessary information, we will schedule another meeting to review all of the documents and sign the bankruptcy petition. We will then file your case and notify all of your creditors.

About one month after filing your case with the bankruptcy court, a 341 meeting, which is meeting of creditors, will be scheduled. In a Chapter 7 proceeding, debt discharge should occur between 75 and 90 days after the 341 meeting. In a Chapter 13 proceeding, there is a similar meeting with the Chapter 13 plan trustee to confirm your plan; debt discharge will occur after you have completed your plan and made all payments, usually over a period of 36 to 60 months.

Should you file for bankruptcy?

If you are deeply in debt and wondering whether you should consider filing for bankruptcy, ask yourself the following questions:

  • Are any of your credit card accounts more than 30 days late?
  • Do you only pay the minimum payment due on your credit cards?
  • Have you reached the credit limit on one or more of your credit cards?
  • Do bill collectors call you at home or work?
  • Do you have multiple mortgages on your house?
  • Do you live from paycheck to paycheck?
  • Are you behind on your house or car payments?
  • Is your house in jeopardy of foreclosure?
  • Has your car been repossessed?

If you have answered “yes” to any of these questions, then filing bankruptcy may be a viable option that you can use to obtain debt relief and a financial fresh start. Our firm can further evaluate your current financial situation to determine if we can be of assistance.

Differences Between Chapter 7 and Chapter 13

When filing Chapter 7 bankruptcy, all of the petitioner’s dischargeable debts are eliminated. Secured creditors, such as the banks holding mortgage and car loans, must continue to be paid if the petitioner is going to keep the property. To file under Chapter 7, your current monthly income must be less than the median income in your state, or a means test calculation must show that your monthly income minus expenses over a five-year period is $6,000 or less and includes 25 percent or less of unsecured debt.

If you do not qualify to file under Chapter 7, a Chapter 13 proceeding might be appropriate. In a Chapter 13 proceeding, also called a “wage earner’s plan,” a 5-year plan is created in order to allow you to pay back creditors at least part of what they are owed. Secured creditors will continue to be paid and unsecured creditors will be paid back without interest based on what you can afford to pay. Chapter 13 also allows you to catch up on past due mortgage and vehicle payments over the life of the plan.

Why You Need an Attorney

Bankruptcy law is confusing and complex, especially in light of the recent changes enacted in the fall of 2005 in the form of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). An experienced Charlotte bankruptcy attorney from the Law Office of Jack G. Lezman, PLLC will protect your interests and make sure there are no errors or missteps in your filing. Our firm also focuses on fighting for your rights in the bankruptcy court and make sure your interests are not trampled on by creditors, debt collectors, and others.

Bankruptcy Abuse Prevention and Consumer Protection Act

The BAPCPA of 2005 is an enormous piece of legislation designed to reform bankruptcy law and require more people to pay a larger portion of their debts. Although eligibility requirements were changed, reports show that 85% of the people that would have qualified under Chapter 7 per the old law will still qualify under the new law. Some of the major changes include:

A Means Test for Chapter 7 Eligibility
Before the new law, the court had discretion to determine whether your case qualified for Chapter 7 bankruptcy. Under BAPCPA, applicants are not subjected to a two-part means test. First, after taking out certain necessary expenses like rent and food, it will be determined whether you can afford to pay 25 percent of “non-priority unsecured debt,” like credit cards. Then your income is compared with the state’s median income. If your income is more than the state’s median income and you can afford to pay more than 25 percent of the unsecured debt, you will not be allowed to file Chapter 7 bankruptcy. If your income is lower than the state median you may file Chapter 7.

Mandatory Credit Counseling and Debtor Education
The new law requires you to meet with a credit counselor sometime during the six-months prior to applying for bankruptcy. In order to have some of your debts discharged, you must also attend money management classes. These may both be done online for a small fee.

Additional Filings
Under the new law, a debtor will be unable to obtain a discharge in a Chapter 13 proceeding if he or she obtained a discharge in Chapter 7, 11, or 12 proceedings within 4 years of the filing of the new case, or in Chapter 13 within 2 years of the new case.

Establishing What You Can Afford to Pay
Under the new law, courts are required to apply living standards determined by the Internal Revenue Service to determine how much you can afford to pay on your debts after reasonable deductions for living expenses such as rent, food and other necessary costs.

Contact a Charlotte Bankruptcy Lawyer to Learn More

With nearly 20 years of experience, the Law Office of Jack G. Lezman, PLLC has helped thousands of clients discharge their debts successfully while allowing them to keep and preserve their assets. If you want to work with a knowledgeable and committed legal team that delivers the personal attention you deserve, you need the Law Office of Jack G. Lezman, PLLC.

Contact a Charlotte bankruptcy lawyer our firm to schedule a consultation and learn more about how we can help.

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