Many people are under the impression that filing for bankruptcy should be avoided at all costs, because “it will ruin your life.” A misconception about bankruptcy is that you lose all of your possessions and you will be haunted forever. A professional lawyer can teach you the truth about bankruptcy and can help you through all of the intricacies and complex verbiage regarding both Chapter 7 and Chapter 13 bankruptcy. David Johnson, a Salem bankruptcy lawyer, has over 10 years experience in the financial sector. David can help you through the convoluted process of filing for bankruptcy. Although you can file for bankruptcy on your own you may find it to be very difficult. You might find having an attorney there to explain the unique nuances very helpful. A qualified professional can help you analyze the advantages and disadvantages of filing for bankruptcy and will give you all of the information that you need to know throughout the process.The Process
Every person who is interested in filing for Chapter 7 or chapter 13 bankruptcy must participate in Credit Counseling within six months before filing and must complete a financial management instructional course after filing bankruptcy.
After you go through Credit Counseling you must then apply for the Means Test. The Means Test is when the debtor’s income and expenses are analyzed to determine if they qualify to file a Chapter 7, or if they will have to file Chapter 13. In order to apply for the Means Test the court will look at your average income from the six previous months and they will then compare that data to the median income for Oregon.
Once you have been analyzed by the courts using the Means Test then it is time for you to gather all of the necessary paperwork required to apply for bankruptcy. In order to begin the process, you (the debtor) must itemize your current income sources, major financial transactions for the past two years, your monthly living expenses, debts (both secured and insecured), and your property. The debtor must also collect all of their tax returns from the last year’s deeds to any real estate they own, their car(s) tiles and the documents for any loans they may currently have.
Once all of the information has been gathered the debtor should then figure out which property they believe is exempt from being seized by the courts. This part of the process is best done with the assistance of an attorney. A professional bankruptcy lawyer can help you file the necessary two-page petition and many other required forms. An attorney can help you through the process and give you the best advice. Call David Johnson, a bankruptcy lawyer in Salem, to help you understand everything that you need to know about bankruptcy. It is important to be entirely truthful during this process, because if at any time the judge or the creditors feel as if you have not been truthful then it could jeopardize your petition and ultimately ruin your chances of being able to qualify to file for bankruptcy.Chapter 7 Bankruptcy
When somebody files for Chapter 7 bankruptcy they wipe away all of their debts. Wiping away all of your debts will allow for a “fresh start.” Your assets are liquified and are collected by a trustee. The trustee will then sell all of your assets and will pay the debtor (which is you), any amount that is exempt. The net proceeds are then liquified and distributed to your creditors. Your trustee will take a commission from the proceeds.
Many types of debts cannot be discharged in a Chapter 7 bankruptcy. For example, spousal support, fraudulent debts, certain types of taxes and student loans. Most all debtors who choose to file for Chapter 7 have substantial amount of credit card debt and a significant amount of unsecured bills while only having very few assets. Although a debtor might have a lot of debt, Chapter 7 bankruptcy should be able eliminate all of these debts.
If you file for Chapter 7 Bankruptcy you may be allowed to keep many of your secured debts. These secured debts can be items such as a car, or a home. In order to keep these debts you have to sign a document called “Reaffirmation Agreement.” Signing this paper will allow you to keep these debts and to keep them in your name. However, if you reaffirm the debt then you are responsible for it and cannot file for bankruptcy for these items for another 8 years. If you choose to sign the “Reaffirmation Agreement” then you are still responsible to pay these debts and send in payments as they are due. In most all bankruptcy situations individuals file for Chapter 7 bankruptcy, because it allows for the debtor to simply eliminate their significant amount of debt without paying it back.Chapter 13 Bankruptcy
When an individual chooses (or is force to based on qualifications) to file for Chapter 13 bankruptcy, the debtor has to create a proposal for a repayment plan to the creditors who are willing to pay off all or part of their debt from the debtor’s future income. People use Chapter 13 bankruptcy to avoid having to foreclose on their home, to make up missed payments on cars or mortgage, to pay back taxes, to stop interest from accruing on their tax debt and to keep valuable non-exempt property. As long as the debtor stays true to their repayment plan, all of their dischargeable debt will be released back to their possession; which is usually around 3 to 5 years.
Generally, Chapter 13 bankruptcy is when debtors would like to keep their assets such as their home or car, and they have more equity in their secured assets that they would to like to protect under the Oregon bankruptcy exemptions. While Chapter 7 bankruptcy is all about liquidation, Chapter 13 bankruptcy is about reorganization. When an individual would like to file for Chapter 13 bankruptcy they are given the opportunity to make up their overdue payments through a payment plan which is over time. If you have valuable nonexempt property and you would like to remain in possession, then a Chapter 13 bankruptcy might be a better option for your particular circumstance.
To qualify for Chapter 13 bankruptcy one must have a consistent and regular source of income. The debtor must also have disposable income that they can apply towards their Chapter 13 financial payment plan.
Every individual who files Chapter 13 bankruptcy must submit a repayment plan. The repayment plan must pass three tests.
- It must be delivered in good faith.
- Unsecured creditors must be paid at least as much as if a Chapter 7 bankruptcy had been filed.
- All of your the disposable income must be paid into the plan for at least three years.
All of the details and information about Bankruptcy can be quite confusing if you are not familiar with the verbiage. If you are interested in learning more about filing for bankruptcy and you have further questions then you should call David Johnson who is an experience bankruptcy lawyer in Salem, oregon. A qualified lawyer can help make this stressful time a little bit easier and can assistant you by working you though all of complex legal terminology.
David Johnson, a Salem bankruptcy lawyer, is constantly trying to provide his clients with the best service. When David chose to become an attorney he wanted to be honest, dedicated and always put the clients needs before his own. He truly wants to help people and he wants the best for his clients. He will work hard to help you achieve the outcome that you may be looking for in your bankruptcy issue. Before David became a lawyer he worked in the finance sector for about 10 years, so not only is he very well versed as a lawyer he is very experiences in the financial scene.
If you are debating whether or not a bankruptcy would be right for you then you should call David Johnson Legal today to receive a consultation.