Bankruptcy

    If you are having trouble paying your debts, you may need to file for bankruptcy.  This is a legal process where debts can be discharged so that they will not have to be paid.  When this happens, creditors cannot try to collect debts or sue you to obtain a judgment for the debts.  While filing for bankruptcy will not necessarily prevent a bank from foreclosing against your home if you are behind on mortgage payments or repossession of your car if you have missed too many car payments, it will delay the process so that you can try to recoup your losses or make other arrangements.

    Filing for bankruptcy won't let you out of paying back student loans, child support or alimony payments but it will defeintely reduce the amount of stress associated with overwhelming credit card debt and will make the creditors stop calling you incessantly at all hours of the day and night!  

    Our office files two types of bankruptcies: Chapter 7 and Chapter 13: 

1. Chapter 7 Bankruptcy is a liquidating bankruptcy and is the most commonly used.  Under a Chapter 7 bankruptcy, the debtor can discharge all of his or her debts.  You can even keep your house and your car if the payments are current and you reaffirm the debt (i.e. agree to continue making payments on these items).  Other debts, can simply be discharged altogether.  In a Chapter 7 bankruptcy, the debtor is also allowed exemptions for personal assets.  Any assets exceeding the exemptions are ususally sold in hopes of using the proceeds to pay creditors.  However, often, there is not enough money from the proceeds of the sale to actually pay creditors because of administrative fees.  Eligibility for filing a Chapter 7 bankruptcy include your annual income, the means test, and whether you have previously filed a Chapter 7 bankrutpcy in the last eight years.  The advantage of a Chapter 7 bankruptcy is that you, the debtor, would have no future obligations on any debts that are discharged as a result of this type of bankruptcy.  My office will review your information with you and tell you if you qualify for a Chapter 7 bankruptcy and will prepare all the necessary documents for you and will guide you through the process, including meeting with you and the Trustee at the Creidtor's Meeting that follows filing the bankruptcy petition.

    2.   Chapter 13 Bankruptcy can only be used by individuals and not corporations.  Debts that are not discharged by filing a Chapter 7 bankruptcy can be partially discharged by filing a Chapter 13 bankruptcy.  Also, non-dischargeable federal taxes can be paid without interest under this form of bankruptcy.  Additionally, business owners engaged in business as a sole proprietor or partnership may be able to use a Chapter 13 bankruptcy to pay or settle debts while remaining in business.

    Bankruptcies begin by filing a petition with the Bankruptcy Court in the federal judicial district where you, the debtor, resides.  Once you begin the bankruptcy, you may be required to attend credit counseling, meetings and court hearings in order to complete the process.  While you have the right to represent yourself in these matters, you may feel more comfortable with an attorney to help guide you through the process and to speak to the court and creditors on your behalf.  You may also choose to use a non-lawyer service to file your bankruptcy petition but these services cannot provide you with legal advice and may not be as effective when negotiating with creditors. 
    
    The Law Office of Donna M. Goerner, P.A. is available to help you determine which bankruptcy is appropriate for your specific situation.  There is no fee for the initial consultation.  Call for an appointment.