Debtors can consider bankruptcy when they have fallen behind on essential payments to their creditors, Internal Revenue Service (IRS), and loan providers. When debtors fall behind on payments, it can be difficult to catch up on payments. More often than not, the IRS or your creditors will work with you to establish a payment program to help you catch up on late payments. However, when you fail to stick to a new payment program or you know that you do not have the capacity to pay back debt, your only option may be to file bankruptcy. Bankruptcy is not for everyone so before you start your bankruptcy petition, you are encouraged to speak with a local bankruptcy attorney.

If after an analysis of your financial situation you determine that you would like to pursue debt relief through a bankruptcy, it is crucial to contact the right attorney. The right attorney is a law professional that can guide your specific case through the bankruptcy laws and provide expert advice regarding your situation. The right attorney is different for everyone given that everyone will file a bankruptcy that suits their specific needs. Debtors will want to conduct as much research about their attorney and will want to work with a local attorney. Bankruptcy laws differ from state to state so it is crucial to work with a local expert. In states like California, debtors will be unable to file a bankruptcy using the federal bankruptcy code. Instead, debtors will be required to work through the local California bankruptcy laws. 

Taking your location into account is as important as choosing an attorney that is capable of applying the correct bankruptcy chapter to your case. For instance, if you want to file a Chapter 7 bankruptcy (liquidation) you will want to work with an attorney that has extensive experience with Chapter 7. There are a variety of bankruptcy chapters and each describes their own requirements and procedures. Debtors will need to choose an attorney that has experience and the legal knowledge to guide their case through a bankruptcy. Individuals that choose to work with an attorney that is not experienced in their specific chapter may risk missing a specific deadline or specific documentation. The right attorney will make sure that all of your documents are filed correctly the first time ensuring that your case is processed the first time around. Furthermore, you will need to consider the type of bankruptcy that works for you.

Filing a bankruptcy is a serious legal procedure that may require the attention of a law professional. Individuals that own property and who have different forms of incomes will want to work with an attorney to discuss the best possible option. In most cases, you are encouraged to speak with an attorney before you file any paperwork. Debtors that do not work with the right attorney or who choose to file a bankruptcy on their own may find that they lost more than they should have or may find that a bankruptcy was not a necessity. To make sure that your bankruptcy is handled correctly you are highly encouraged to do some research and contact a local state attorney.

Bankruptcy law provides different outlets for different types of debtors so you want to be sure that the person that is guiding your case is capable of applying the laws that apply to you. To speak with an attorney about your bankruptcy, you may contact the Bankruptcy Attorney at 424-285-5525. There are a variety of options for debtors that are in economic stress. Not everyone should file for bankruptcy and not everyone can enjoy the same type of bankruptcy outcome. To have a clear understanding of your case, you are encouraged to speak with us today.

Understanding Yourself First

Before you decide what bankruptcy chapter will work for you, you will need to have a clear understanding of yourself. An attorney may ask, “Are you a single person? Are you married? Are you a business owner?”. Single, married, or business owners have the capacity to work with an attorney that is capable of filing a Chapter 7 or a Chapter 13 bankruptcy. In many cases, if you are filing as a single or married entity, you will be able to work with an attorney that is experienced in debt settlement and liquidations. Your attorney should be capable of helping a family determine whether they qualify for a Chapter 7 or whether they would be better off through a Chapter 13. Non-business individuals will need to consider whether they will file as a single or married entity. Married couples have the ability to keep more of their property when filing for a Chapter 7 than when filing as single individuals. If filing as a married, the attorney will need to make sure that they can apply for the correct exemptions.

However, if you are a business owner, you will have a different type of debt than those filing as non-business. Small business owners should consider working with an attorney that is capable of helping small businesses through a bankruptcy. For instance, a small business owner will want to work with an attorney that can help them decide whether they should file a Chapter 7 or a Chapter 13 bankruptcy. The right type of attorney will help the business owner decide whether their company is turning enough of a profit to pay back their debt through a debt settlement program under Chapter 13. On the contrary, your attorney should have the ability to analyze your business and determine if a Chapter 7 liquidation would be most appropriate. Individuals that file for bankruptcy will be unable to file for bankruptcy again after a certain period of time to make sure that you file the right bankruptcy the first time.

The Different Bankruptcy Chapters

If you have been doing your research, you should know by now that a bankruptcy has a variety of chapters that apply to different circumstances. In other words, not every bankruptcy is handled or processed in the same manner. In bankruptcy law, there are six chapters that can be used to file a bankruptcy petition and that apply to different entities.

  • Chapter 7: through this chapter debtors may have their non-exempt property sold off to pay off their debts. Individuals that file through this chapter will work with a bankruptcy attorney who will be in charge of selling their belongings and distribute the earnings to pay off their creditors. If at the end of the liquidation there is money left over, the trustee will cut you a check for the difference. A Chapter 7 requires that your attorney understand the local exemption laws especially if you are in a state like California. California exemption laws allow individuals to exempt more property than what is described in the federal bankruptcy exemptions. In addition, individuals that apply for a Chapter 7 will be required to pass a means test before having their debt discharged. An attorney should also be capable of determining if you qualify for this type of bankruptcy.
  • Chapter 9: through this chapter, a municipality such as a school district, cities, towns, and other public agencies have the ability to file for a debt reorganization. The debt reorganization of a city or other public agency requires that the attorney is capable of working with the laws that apply to municipalities.
  • Chapter 11: all types of individuals that did not qualify for a Chapter 7 or a Chapter 13 may work through a Chapter 11 to have their debt reorganized. In other words, if you are a big business or a high earning individual you will be required to work through a Chapter 11 if you choose to file a bankruptcy. The reason most individuals and attorneys choose to work through chapter 13 as opposed to Chapter 11 is that the process is more time and money efficient. Chapter 11 is usually a longer process as it involves more complex entities like businesses and limited liability companies (LLC).
  • Chapter 12: this is another reorganization chapter that allows individuals to reorganize their debt much in the same way as Chapter 13. The difference in this chapter is that it provides additional benefits for fisherman and farmers.
  • Chapter 13: of the reorganization bankruptcy chapters, this chapter is the most common. Individuals that work through this chapter will be capable of keeping all of their property and establishing a debt settlement program that works around their earning potentials. A Chapter 13 will require the attention of an attorney that is capable of helping you create a debt settlement program that can be agreed upon by all creditors. When creditors disagree with the debt settlement program you have to be ready to negotiate with the creditors in order to achieve a debt settlement program that works for all.
  • Chapter 15: applies to foreign debtors and foreign bankruptcy courts

A Local Exemptions

The reason you want to work with a local attorney is to ensure that your attorney is capable of applying the right exemptions to your case. For instance, in some states, you have the ability to work with the federal or local exemptions. Exemptions play a big role in both Chapter 7 and Chapter 13 so you want to make sure that you are using the correct set of exemptions. In Chapter 7, your bankruptcy exemptions will allow you to keep a certain amount of property. When you file your exemptions you are capable of keeping items that are under a certain value.

For instance, the federal exemptions explain that you may keep a vehicle that is under the value of $2,400 and up to $1,500 in professional tools and books. Let's say you’re in the state of California and your attorney gives you these exemption guidelines, you will lose out on a lot. A bankruptcy attorney should be able to apply the local exemption laws to your Chapter 7. In California, debtors may exempt a vehicle that is under the value of 4,800 and may keep up to $7,175 in professional tools and books.

As mentioned earlier, exemptions will also affect the outcome of your Chapter 13 bankruptcy. In Chapter 13 your exemptions will help the court determine how much you must pay to your creditors. Chapter 13 is a debt settlement program where certain debt is paid back in full, partially, or discharged. The debtor will have the ability to customize the debt settlement program so that it is agreed upon by all parties.

When a debtor files a Chapter 13, all of their exempt property will be used to calculate how much should be paid back to the debtors. In Chapter 13 the debtor is allowed to keep all of their property, however, items that would not be exempt in Chapter 7 will be calculated to determine how much is to be paid back to unsecured debtors. The same as with Chapter 7 exemptions may allow you to save more of your property and money if you apply for the local exemptions. Make sure that your attorney is capable of applying the local exemption laws.

Before anything else, you want to make sure that you like your attorney. You attorney should be a person that is trustworthy and genuinely cares and pays attention to your case. An attorney will work with you throughout the life of your bankruptcy so make sure that it is someone that you can talk to with ease. In a Chapter 7 bankruptcy, you attorney will help guide your case for at least 3 to 4 months. In a Chapter 13 bankruptcy, an attorney may work with your case till the end of the repayment program. A repayment program has a very long life that can range from three to five years. When you have an attorney that fully understands your situation, you will be better equipped to handle any motions or objections to your claims later in the future.

To speak with the Bankruptcy Attorney about your case, you may contact our office at 424-285-5525.