Why Consider a Bankruptcy Attorney

Why Consider a Bankruptcy Attorney

What is Bankruptcy?

Bankruptcy is a federal court process designed to help consumers and businesses eliminate their debts or repay them under the protection of the bankruptcy court. Bankruptcies are generally described as liquidation (Chapter 7) or reorganization (Chapter 13).

Under a liquidation bankruptcy (Chapter 7), you ask the bankruptcy court to wipe out (discharge) the debts you owe. Under a reorganization bankruptcy (Chapter 13), you file a plan with the bankruptcy court proposing how you will repay your creditors. You must repay some debts in full; others may be repaid only partially or not at all. It all depends on what you can afford.

If you are behind on mortgage payments and the mortgage company has started foreclosure proceedings, a Chapter 13 bankruptcy may allow you to save your home. Once a bankruptcy is filed, your creditors must stop all collection activity against you, including foreclosure proceedings. The past due amounts you owe the mortgage company will be paid through the Bankruptcy Trustee (the person assigned by the court to administer your bankruptcy).

While you are in a Chapter 13 bankruptcy, you must still make your regular monthly mortgage payments and keep current with your payments to the Trustee to prevent the mortgage company from being allowed to go forward with foreclosure.

Why consider a bankruptcy attorney?

Bankruptcy will erase most, but not all debts. When your bankruptcy is completed, many of your debts are “discharged,” meaning you are no longer legally obligated to pay them. However, certain types of debts are not dischargeable in bankruptcy. They include child support, student loans, most back taxes and debts incurred as the result of fraud.

Call Hands Law today at (704) 248-7976 for a free bankruptcy consultation.