Sudden job losses, medical emergencies, dissolution of marriage, and a broad range of other situations can make it impossible to pay your bills, despite your best attempts to be financially responsible. Fortunately, bankruptcy can provide the debt relief you need, through two chapters aimed at consumers in different situations. Blackwell & Associates, P.C., a law firm in O’Fallon, Missouri with substantial experience handling bankruptcy, explains how chapter 7 and chapter 13 bankruptcies can help you begin rebuilding your life.
Chapter 7 Bankruptcy
Chapter 7 Bankruptcy is what you probably thought of when you thought of bankruptcy. It can be over with quickly, usually in approximately 120 days, and can eliminate most types of unsecured debt such as credit cards and medical payments. There are two types of parties you must be wary of in a chapter 7 bankruptcy. The first party is the secured creditor. If you are late on house or car payments going into a chapter 7 bankruptcy, you are in danger of losing the house or car. The second party is the chapter 7 trustee. A duty of the chapter 7 trustee is to take, sell, and use property of the bankruptcy estate to pay unsecured creditors who would normally not receive anything in a chapter 7 bankruptcy. The Missouri legislature has passed exemption laws to protect your equity in property. You need to be honest about the value of your property so your attorney may determine if your property is protected. In addition, you must pass a means test to qualify for chapter 7 bankruptcy protection. To determine whether you pass the means test, the attorneys at Blackwell & Associates, P.C. will require that at the initial consultation, you bring: a) a list of debts with the name of each creditor and the total owed to each creditor; b) a list of monthly expenses such as food, utilities, and insurance; and c) the last six months of paystubs or proof of income. Depending on your circumstances, we may need to see business documents such as profit and loss statements and balance sheets, divorce papers, or information on pending lawsuits.
Chapter 13 Bankruptcy
If you are behind on house or car payments that you want to keep from being foreclosed upon or repossessed; you have too much equity in property that is not protected fully by Missouri law; or you do not pass the chapter 7 bankruptcy means test, then a chapter 13 bankruptcy may be the best option. In addition to discharging unsecured debts, chapter 13 bankruptcy allows you to bring your mortgage and auto loan accounts current through a payment plan. As long as you are making your payment, no one can take your property from you. The amount of your payment, however, is determined by a number of factors including, but not limited to: a) the amount of equity you have that is not protected by Missouri law; b) the amount of your secured debt; c) the amount you are behind on your secured debt; d) the amount you owe on either taxes or child support; and e) the amount of your income. There is a chapter 13 bankruptcy means test as well, and the same items should be brought to an initial consultation on chapter 13 that should be brought to one on a chapter 7 bankruptcy. You must prove that you have sufficient income to make the payment.
There are pro’s and con’s to the filing of either a chapter 7 bankruptcy or a chapter 13 bankruptcy. If we believe that a bankruptcy would put you in a worse position than you are in right now, we will let you know that as well. We will give you the information that you will need to decide which chapter is best for you.
If you are struggling with debts you cannot pay, turn to the legal team at Blackwell & Associates, P.C. They have the knowledge and experience to help you reclaim your life. The bankruptcy attorneys serve borrowers throughout Saint Charles and nearby communities, providing prompt attention and personal service to every client. To schedule a consultation with the law firm today, please call (636) 240-3632.