Bankruptcy Attorney
A trusted bankruptcy attorney Middletown, CT residents can count on from The Law Offices of Ronald I. Chorches knows that filing for bankruptcy might be the right thing for you to do during hard times. A common misunderstanding about bankruptcy is that it means you have no options or a bleak future. This is far from the truth. Filing for bankruptcy can allow you and your family to have a significant amount of freedom. This may be the one way that you can begin taking back your financial freedom and wiping your slate clean.
How do I know which kind of bankruptcy to file for?
When you decide to file for bankruptcy, you may be wondering if you are able to choose the type of bankruptcy you file for. For the most part, you will file for either Chapter 7 or Chapter 13.
Chapter 7 Bankruptcy. Chapter 7 bankruptcy can allow you to truly get a fresh start because it will allow you to pay off your creditors. With this method of bankruptcy, you will need to give up many of your assets to pay off creditors and may not be able to keep your house or your car. If you are hoping to pay off your debts and do so quickly, this may be the right bankruptcy to file for.
Chapter 13 Bankruptcy. With Chapter 13 bankruptcy, you can work with your bankruptcy attorney to create a repayment plan so that you can start paying back your debts. This will usually be in the three- to five-year range and you will be able to keep your property. It is also possible to keep your home if you are worried about foreclosure.
Don’t worry about choosing. When you work with an attorney, they will examine your finances closely, look at your debts, and look at your assets. They can help determine which bankruptcy you are qualified for and help you create a plan.
Bankruptcy Lawyer
If you find yourself facing this bankruptcy, consulting with a bankruptcy attorney is typically your best course of action. It’s worth noting that bankruptcy filings are more common than many realize. In the past year, for instance, 884,956 American households resorted to bankruptcy. Similar to numerous daunting and unpleasant procedures, bankruptcy’s reputation is often built upon a blend of partial truths and prevalent misconceptions. This can render the filing process quite intimidating, prompting many individuals to go to great lengths to avoid it. The reality, however, is that bankruptcy becomes far less intimidating once you gain a comprehensive understanding of it.
Common Bankruptcy Myths
Married Couples Have to File Together
It’s not uncommon for one spouse to bear a substantial amount of debt solely in their name. In such situations, it is often advisable for that spouse to pursue bankruptcy individually. However, when the debt is jointly held, both spouses should consider filing together. When both individuals share liability for the debt, and only one of them files for bankruptcy, creditors retain the right to demand full repayment from the non-filing spouse.
Bankruptcy Permanently Kills Your Credit
Anticipate a period of restricted access to credit, as bankruptcy typically remains on your credit report for the next 7 to 10 years. However, you can look forward to a notable improvement in your credit score within approximately 6 to 8 months, provided you maintain consistent payments and use any credit cards responsibly, avoiding overuse or misuse.
You Can Spend Recklessly Right Before Filing
Given that credit card debt is typically discharged in a Chapter 7 bankruptcy, some may erroneously believe they can engage in a pre-bankruptcy spending spree and have all the debt erased during the court proceedings. Regrettably, this is a common misconception that can lead people astray. Courts have ruled that accumulating charges shortly before a bankruptcy filing constitutes fraud. Debt stemming from fraudulent activity is not eligible for discharge.
Bankruptcy Filers Are Financially Irresponsible
It can be tempting to waive all bankruptcy filers as reckless spenders who don’t know how to manage their own finances. The truth is this is often not the case. The three major causes the bankruptcy or divorce, severe illness, and job loss. Many avoid filing for bankruptcy as they fear is the admission of failure or character flaws. It simply isn’t the case and just because you need to file doesn’t mean you failed.
Business Bankruptcy (Chapter 11)
If you are a small business owner who is facing financial difficulties, you may be thinking about filing for bankruptcy. In this situation, a bankruptcy attorney Middletown, CT clients trust may recommend filing for Chapter 11 bankruptcy. Chapter 11 bankruptcy is a specific chapter of the United States Bankruptcy Code that primarily deals with reorganizing businesses, including corporations, partnerships, and sole proprietorships. It is often referred to as “business bankruptcy” or “reorganization bankruptcy.” Chapter 11 allows financially troubled businesses to sustain their operations while formulating a strategy to settle debts and confront financial challenges.
The central feature of Chapter 11 is the composing of a restructuring or reorganization plan. This plan outlines how the business will restructure its operations and finances to become profitable again. It often involves renegotiating contracts, reducing debt, and potentially selling assets. Of course, this is one of the most critical, and most challenging, steps of the Chapter 11 bankruptcy process. The restructuring plan must clearly articulate how creditors will be treated and how rights will be altered. Further, it must fully conform to all aspects of Connecticut bankruptcy law.
For the Chapter 11 restructuring plan to become effective, it must receive approval from the bankruptcy court, usually through voluntary consent from every class of creditors. Creditors of the company are granted the opportunity to cast their votes on the plan. If the plan is rejected by the creditors, it often necessitates modifications. However, there are specific instances, as elucidated by a knowledgeable Middletown bankruptcy attorney, where a bankruptcy court might sanction a plan despite creditor objections. Hence, the presence of a proficient and seasoned bankruptcy attorney representing you and your company becomes paramount.
Failure to Adhere to Chapter 11 Reorganization Plan
An approved reorganization plan becomes a binding contract. Companies exiting Chapter 11 will be legally held to the terms of their reorganization plan. If a company fails to follow through with the plan, further legal action can be taken against it. Such action can include:
Dismissal of the Case
The court has the authority to terminate the Chapter 11 case. Consequently, the debtor forfeits the safeguards provided by bankruptcy and once more becomes susceptible to creditor legal actions.
Conversion to Chapter 7
The court may convert the Chapter 11 case into a Chapter 7 liquidation bankruptcy if it becomes evident that the debtor is not complying with the plan.
Appointment of a Trustee
If the court believes that the debtor’s management is not acting in the best interests of creditors or is not complying with the plan, it may appoint a trustee to oversee the case and ensure compliance with the plan.
Creditor Actions
Creditors may seek to have the bankruptcy case dismissed or converted to Chapter 7. Additionally, they can ask the court to enforce the plan’s terms or challenge the plan’s confirmation if they believe it was not properly approved.
Sanctions
The court holds the power to levy sanctions or penalties on the debtor or its leadership, which may include fines, limitations, or even charges of contempt of court.
Loss of Discharge
In some cases, failure to adhere to the reorganization plan can result in the debtor being denied a discharge of debts, meaning they will remain personally responsible for the debts even after bankruptcy.
Do You Have Bankruptcy Questions?
If you are still confused about whether or not you qualify for bankruptcy or which type of bankruptcy you qualify for, you can contact our bankruptcy lawyers today! Be sure to make a list of your debts, major financial assets, and bring a copy of your pay stub and we will be able to give you guidance on the next steps.
Before you file for bankruptcy, hiring a lawyer specializing in bankruptcy is crucial. We have the expertise and knowledge to guide you through this complicated process. Unfortunately, paperwork inaccuracies will delay your case and sometimes may even put your case at risk. For this reason, we ensure that all documentation is precisely completed. With a bankruptcy lawyer on your side, you will have peace of mind knowing that your documentation is completed correctly and submitted on time for the best chance of success.
To learn more about what we can do for you, please contact The Law Offices of Ronald I. Chorches today to schedule a free review of your case.
Our service area also includes Meriden, Glastonbury, and East Hartford.