Bankruptcy is a scary word for a lot of people. It can mean the end of financial security or the loss of possessions. It can feel like a lack of control or a failure. But bankruptcy is a way to save your financials and get on the right path to restarting with a blank canvas and a much less stressful financial situation. Knowing that doesn’t make it completely un-scary, but it can help you understand that bankruptcy is there to help you.
Many people have the same questions when they first talk to a bankruptcy attorney.
What does bankruptcy actually mean? Which Chapter can you file for? What process can you expect to go through? What information is required of you? A personal bankruptcy attorney can answer all these questions but you can also go in with an expectation.
Below are some common questions about bankruptcy, answered for you in general terms ahead of your meetings to start the process.
What is Bankruptcy?
Bankruptcy may, in your mind, be synonymous with “broke” but that’s not what it means at all. It is a federally mandated process to help you pay off debts and creditors when your assets are running lower than the money you owe. You need to be certain financial straits to qualify, but it doesn’t mean you have no money, but it means you quickly will have no assets as you owe more than you have available.
What Chapters Can I File For?
Different bankruptcy chapters are designed for different entities and situations. Chapter 7 bankruptcy is the Chapter designated for individuals (as well as some corporations) to file for. This process wipes out debt through a designated repayment plan through liquidation, overseen by a bankruptcy lawyer. You will entrust your property and assets to the court as a form of liquidation towards paying off your debt.
Chapter 13 bankruptcy is when your debt is reorganized making it possible to keep your assets while paying back the debt you owe on a repayment plan. This works well for people with a consistent income.
What Documents/Information Do I Need to Provide?
There’s a number of things you need to have ready to share when you first meet with your lawyer. Have an exhaustive list of creditors to whom you owe funds, a copy of your most up-to-date pay stub as well as information on your yearly gross earnings for the past two years, any financing information you have on your cars, information on wages being garnished, information on student loans and tax obligations, and your marriage status and potential spouse’s financial information.
Related Questions
Does filing for bankruptcy stop creditor calls?
When you file for bankruptcy, you’re awarded an automatic stay. This prevents creditors from contacting you for funds unless the court instructs them otherwise. And, once you have an attorney any creditor calls will go to them rather than you. This goes into effect almost immediately.
Will this affect my job?
Legally your employer cannot fire you for filing for bankruptcy. While bankruptcy petitions are public documents, your employer will not be informed unless they are one of your creditors. You also will not be punished with any jail time for not paying back your debts unless they are owed to the IRS depending on the nature of the debt.
If debt is making it difficult to pay your bills, talk to a bankruptcy lawyer to learn more and prepare to file for bankruptcy.
Hines Law Offices is full-service bankruptcy firm that handles all types of debt relief matters to the residents of Massachusetts. With over 20 years’ experience and knowledge in personal bankruptcy cases, we are committed to safeguard your interests and help gain financial control of your future.
Our bankruptcy attorneys specialize in Chapter 7 and Chapter 13 cases and will provide the right solution to your case. Call today for a Free Consultation!
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