Chapter 7 is the most common type of Bankruptcy. It wipes out (discharges) the person’s responsibility to pay debts (not all, but most). If the creditor holds security (mortgage, car loan), you may keep the item if you pay the debt, otherwise the lender will take it back. A chapter 7 is usually over in 4-6 months.

Although every person’s finances are different, there are several common “symptoms” of acute financial distress. These include:

• Credit card balance which gets larger each month
• Difficulty in making minimum payments on credit cards
• “maxing out” on credit cards
• Being behind on rent/mortgage and unable to catch up
• Creditors making calls and letters because of overdue bills
• Being unable to get out of debt in the foreseeable future.

Experience has shown that most persons whose finances reach the levels above are unable to repay their debts in a reasonable time. Imagine what a relief it would be to have all the credit card and other debt “wiped out”.

One of the saddest experiences encountered in this office is meeting people who have borrowed from their friends or family, paid some of their debt, and several months down the road still have considerable debt that now includes the friends/family. In some cases, you may be just transferring your debt from several businesses to several friends or family members. A consultation with a lawyer will help determine if filing for Bankruptcy would benefit you by discharging your debts rather than continuing their oppressive burden.

It means getting relief for your financial problems under the federal bankruptcy code. Filing for Bankruptcy wipes out (discharges) most of your debts. It also stops your creditors (the people you own money to), from taking away your assets to collect their money, garnishing your wages, suing you, or otherwise harassing you. It generally takes about 6 months from start to finish. You then go on with life as usual, but with a fresh, new start.

It means getting relief for your financial problems under the United States Bankruptcy Code. Most personal bankruptcy claims are filed under chapter 7. (If you are interested in our Chapter 13 Brochure, please ask for it.) First, your lawyer prepares an extensive financial questionnaire consisting of the Petition, Statement of Affairs and Schedules. These are then filed with the Bankruptcy Court immediately starting an automatic stay which is a federal court injunction stopping creditors from taking any action outside of the Bankruptcy Court to enforce their claim. Your creditors, their lawyers and collection agencies must stop lawsuits, making written and telephone demands for payment, taking away your assets to collect their money, garnishing your wages, or otherwise harassing you. Also, upon filing, the Trustee is appointed. The Trustee will review your petition, meet with you, and make recommendations to the Judge. Your meeting with the Trustee is generally considered to not be intimidating and usually lasts less than ten minutes. Of course, we are at your side during this meeting.

The first step is to consult with a bankruptcy lawyer who will review your specific financial situation, make recommendations, and ensure that all goes smoothly with your claim. Our staff here at the firm of Ronald I. LeVine has many years of experience in bankruptcy law, and will take you through the process from start to finish. At your first consultation, one of our lawyers will personally sit down with you on a one-to-one basis and analyze your situation. We will determine if bankruptcy is right for you – for it does not benefit everyone. My goal is to help you keep all of your assets. If it appears that filing for bankruptcy protection would be of benefit to you, we will then review, research and compile in detail the necessary facts and figures to prepare your bankruptcy petition and related documents for the courts. One of our lawyers will also attend and assist you the one time you meet with the Trustee. In general, we are with you, on your side, throughout the whole entire bankruptcy proceedings. We are responsible for making sure that all goes well and that all of your questions are answered.

Almost all of your debts are discharged. Credit card bills, medical bills, individual store bills, business and personal loans, older taxes, and car loans (if you do not keep the car) are discharged. The general rule is that all debts are discharged, with limited exceptions for taxes, family obligations, debts obtained through fraud, certain court-imposed fines and penalties, and student loans. We will analyze your personal situation to advise which debts may not be covered.

There are special rules that apply to your car. If your car is paid off, you will most likely be able to keep it (it is considered one of your assets). If it is not paid off, you can decide whether or not to keep it. Should you keep the car, you must continue making the payments. Of course, if you do not want to keep the car, you do not have to pay your car loan.

This area is of special interest. Unless you have great equity in you home, generally you can file chapter 7, wipe out your debts and keep your home. If you have fallen behind in your mortgage payments, a chapter 13 bankruptcy petition may be more appropriate, as it allows you to spread out the back payments over a 3-5 year period. You may do this even in the event of a foreclosure.

If you are working, your wages will not be affected or taken away. Your employer will not even be notified of your Bankruptcy petition. Also, on a similar note, though your bankruptcy filing is a matter of public record, it is not printed in any general publications.

While the immediate effect is to worsen your credit rating, most likely was in poor shape before you filed for bankruptcy. Credit reporting agencies will list your bankruptcy for ten years. Generally, if you maintain prudent financial practices after bankruptcy, your credit score will improve to the point where it will better than it was before the bankruptcy. Immediately after your case, you should be able to get a secured Visa or MasterCard, store cards and credit from the car company from whom you previously bought if you completed the payments. Our office can supply you with a list of banks which offer secured credit cards.

Most times, our flat fee is less than one month’s debt payments. For our expertise and personal service you will be charged a moderate flat fee that covers everything in most cases. The rare exceptions are where a significant additional expenditure of time is necessary (a motion, a non-dischargeability proceeding, or other cause). Please feel free to ask us to further explain these terms and the possibility of them based on your individual case. It should also be noted that we understand the needs of the bankruptcy client, and have payment plans available which may suit you.