What Is Bankruptcy and what can it do for you?
Bankruptcy Quick Links:
For a quick overview of Bankruptcy, take a look at the Bankruptcy FAQ
For information on Chapter 7 Bankruptcy, click HERE.
For Information on Chapter 13 Bankruptcy, click HERE.
To understand the difference between Chapter 7 and Chapter 13, click HERE.
If you have Student Loans, click HERE.
To understand the 3 basic types of debts, click HERE.
Do you owe taxes, if so, click HERE.
What Is Bankruptcy?
Bankruptcy is a process under the supervision of the federal bankruptcy court geared to help individuals as well as business entities eliminate or repay debts. The most common types of consumer bankruptcy filed is Chapter 7 “liquidation” or Chapter 13 “reorganization”.
In a Chapter 7, the debtor wipes out all dischargeable debts in a relatively short amount of time. Any assets that are not protected (exempt) are liquidated for the benefit of the creditors. A Chapter 13, on the other hand, is more complex and involves a repayment Plan in which some, or all debts are paid back in a 3 – 5 year time period.
Automatic Stay – A Powerful Tool:
When a bankruptcy is filed, the Automatic Stay goes into effect immediately and “stays”, or prohibits your creditors from any form of debt collection activity. This includes phone calls, collection letters, bills, garnishments, foreclosures or lawsuits.
Will Bankruptcy Eliminate All Debt?
Bankruptcy is incredibly powerful, but it does have it’s limitations. The most common types of debts that are eliminated in bankruptcy are credit cards, medical bills, repossession deficiencies, payday loans, old utilities, most civil judgments and even some tax debts. The most common types of debts that are NOT eliminated in bankruptcy are student loans, court fines/fees, overpayment on unemployment benefits, most tax debts and domestic support obligations.
Is Bankruptcy Right For Me?
Do you have large credit cards that seem to never go away? Is your car payment getting paid later and later in the month? Have you missed a mortgage payment? Are you starting to get collection letters for medical bills you cant pay? If you answer yes to any of these, chances are you need to speak to someone about your options. This does NOT mean that you absolutely should file for bankruptcy, but it may mean that you are financially in trouble.
To speak to a competent, non-profit organization about credit counseling and your potential options, contact HCCI.
To Learn More About Bankruptcy And If It Is Right For You, Call Chris W. Steffens, a Kansas Licensed Bankruptcy Lawyer at 785-727-7700 or email us today.
