A trusted bankruptcy attorney West Hartford, 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.
Chapter 12 Bankruptcy
If you are a farmer or a fisherman, you may be eligible for Chapter 12 bankruptcy. This bankruptcy addresses the unique financial challenges faced by workers in these fields. Farmers and fishermen may have necessary land and equipment for work, which would be detrimental to their livelihood if liquidated in a Chapter 7 bankruptcy. The debtor must have a current farming or fishing operation generating a steady income. Their debts have to fall within certain limits. Then, a payment plan must be arranged and approved by the court.
Not sure which one is right for you?
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.
Are there debts you can’t fix with bankruptcy?
There are certain debts, called nondischargeable debts, that you will not be able to be erased with bankruptcy. Some of these debts are alimony, child support, tax debt, and student loans (though the latter can be erased in certain circumstances).
If you are considering filing for bankruptcy and would like the help of a bankruptcy attorney from The Law Offices of Ronald I. Churches, give us a call now.
Secured Debts & Unsecured Debts
Secured debts are those secured by collateral, an item pledged as security for loan repayment. An example of this is a home or car. If a debtor cannot pay the monthly mortgage or car payment, the creditor may foreclose on the house or repossess the vehicle. Some credit cards are also secured because the borrower may put down an initial deposit when they open the credit account. This initial deposit acts as collateral. On the other hand, unsecured debts are not backed by collateral. Medical bills, personal loans, student loans, and utility bills are examples of unsecured debt.
In bankruptcy cases, these two kinds of debts are treated differently. In Chapter 7 bankruptcy, secured creditors have the right to take the collateral. However, in Chapter 13 bankruptcy, the debtor can propose a repayment plan and keep the collateral. While some unsecured debts are eliminated during the bankruptcy process, certain unsecured debts are not. Student loans and taxes are considered not dischargeable. A bankruptcy lawyer will help you understand your debts and the best option for your case.
No one wants to file for bankruptcy but if you have found yourself in the situation where you need to then talk to a bankruptcy lawyer is often in your best interest. Many people are unaware that filing for bankruptcy is fairly common. In the last year 884, 956 American households filed for bankruptcy.
Like many unpleasant and scary procedures bankruptcy’s reputation is based on the few tidbits of truth combined with plenty of falsehoods. This can make filing a very terrifying process and many people will go out of their way to avoid it. The truth is, bankruptcy is not nearly as frightening once you understand it.
Common Bankruptcy Myths
Here are some of the most common bankruptcy myths out there:
Married Couples Have to File Together
Many people assume that both you and your spouse need to file for bankruptcy. The truth is, it is not unusual for one spouse to have a significant amount of debt solely in their name. In cases like that is best for that spouse to file for bankruptcy alone. However, if the debt is shared between both of you then you both need to file. If both of you are liable for the debt and only one of you files the creditors can demand payment in full from the spouse who didn’t file.
Bankruptcy Permanently Kills Your Credit
This is a fairly common myth that scares a lot of people into not filing for bankruptcy. Under no circumstances will filing completely terminate your credit. Yes, you can expect to not have access to credit and for the next 7 to 10 years bankruptcy will remain on your credit report. In about 6 to 8 months you can expect your credit score to greatly improve as long as you are consistently making payments and not abusing any card you may have.
You Can Spend Recklessly Right Before Filing
Considering credit card debt is usually dissolved in a chapter 7 bankruptcy the theory is you should be able to embark on a spending spree I had of time and have all the debt removed in court. This simply isn’t the case but it is a common myth that many people fall for. Courts have determined that racking up charges before a bankruptcy filing is considered fraud. Debt that is incurred as a result of fraud is not discharged and you will have to pay all of it.
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.
If you have more questions about what a bankruptcy lawyer can do for you then don’t hesitate to reach out to The Law Offices of Ronald I. Chorches today.
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 West Hartford, CT clients trust may recommend filing for Chapter 11 bankruptcy. The following are some common questions that the legal team at The Law Offices of Ronald I. Chorches frequently hears from clients.
What Is the First Step in Filing for Chapter 11?
Chapter 11 starts with filing a bankruptcy petition. This is a very important step in the process, as any mistakes within the petition could seriously undermine a company’s ability to reorganize. Within the petition, a filing company will need to include comprehensive financial information. Specifically, there will need to be a fair assessment of all assets and liabilities. Upon completion of the filing, companies are generally granted an automatic stay. In other words, all debt collection efforts will be temporarily paused.
What Type of Information Do I Have to Disclose?
After filing, companies must disclose all required financial documents and records. Each creditor should be given access to these disclosures. This is necessary because it gives creditors an opportunity to make their own assessments of the filing company’s financial condition.
Do I Have to Submit a Restructuring Plan?
Companies will then be given the opportunity to submit a restructuring plan. 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.
Do My Creditors Have to Approve the Plan?
In order to go into effect, the Chapter 11 restructuring plan must be approved by the bankruptcy court. This is typically done by getting voluntary approval from each class of creditors. A company’s creditors will be allowed to vote on the plan. A plan that is rejected by the creditors will generally need to be altered. As a West Hartford bankruptcy attorney can explain, there are some limited situations where a bankruptcy court may approve a plan over the objections of creditors. This is why having a skilled and experienced bankruptcy attorney representing you and your company is so important.
What If I Break the 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.
Ten Things You Should Know Before Filing for Bankruptcy
Getting yourself a bankruptcy attorney in West Hartford, CT is the best way to educate yourself on the bankruptcy process, but doing your own research is also important. To help you learn more, here are ten things you should know before you file for bankruptcy.
Bankruptcy is a last resort
In order to file for bankruptcy, you need to prove that you have exhausted the other options available to you. If you are considering filing bankruptcy, but are spending extravagantly on cars, vacations, or other unnecessary expenses, you may not be ready. If you have cut your spending to just the bare necessities and are still having trouble making ends meet, some people are able to negotiate with creditors to pay a smaller sum than the full amount owed. If you are still having trouble, bankruptcy could be an option for you. The best way to find out is to contact a West Hartford bankruptcy lawyer.
You are required to complete credit counseling prior to filing
As a prerequisite to starting the bankruptcy process for most types, you are required to complete credit counseling. If you do not know how to find an Internal Revenue Service-approved credit counseling agency, you can discuss it with your West Hartford bankruptcy lawyer for recommendations.
Some assets are exempt from bankruptcy
While many people assume you lose everything in bankruptcy, that is not always the case. Most retirement funds and pensions are not touched in the bankruptcy process.
Joint accounts are not exempt from bankruptcy
If you have a joint account, for instance with a spouse, parent, or child, that account can be used to meet the financial obligations during bankruptcy proceedings.
Some loans do not disappear after bankruptcy
Most loans are covered under bankruptcy law, but some loans, like most student loans, are not covered. Chances are even if you successfully complete the bankruptcy process, you will still have to pay back any student loans you have incurred.
Once proceedings begin, you will have “automatic stay” protection
An automatic stay means that while the bankruptcy proceedings are underway, creditors will not be able to take legal actions against you. Although not guaranteed, going through the bankruptcy process can limit the legal actions creditors can bring against you even after the proceedings have ended.
Filing for bankruptcy is not free
Although it may be counterintuitive, filing for bankruptcy does cost money, however, if this is the right decision for you, do not let the financial cost be a barrier. There is legal aid available if you qualify that can help you cover the fees.
Bankruptcy is public
These proceedings are made public, so if there are people in your life you want to tell, you may consider discussing it with them before the proceedings are finalized.
Bankruptcy decisions are final
In most cases, during bankruptcy proceedings, creditors settle for less money than was actually owed. After the process has been completed, creditors cannot request more money.
The Law Offices of Ronald I. Chorches offer a FREE consultation
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.
Do You Have Business Bankruptcy Questions?
If your company is financially distressed, a West Hartford bankruptcy attorney can help you determine the best available solution. To learn more about what we can do for you, please do not hesitate to contact The Law Offices of Ronald I. Chorches today to schedule a free review of your case.