Our Missouri Chapter 13 Bankruptcy Process
We have 4 Steps to Freedom:
- Free consultation.
- Stop creditor calls.
- Sign and file.
- Rebuild your life.
Bankruptcy sounds bad, but the reality is that it can be your lifeline. You will not need to recover from bankruptcy. Instead, you will recover through bankruptcy. If you struggle with finances and have yet to find an immediate and reliable solution, you will continue to struggle for the coming years, maybe even the coming decades. As you fight to stay afloat, your stress will intensify as your financial situation erodes.
Your financial stress will take over your life as your credit score shrinks, and your debt grows.
When you declare bankruptcy, you can start focusing on things that matter, like your family, your friends, your career, or your hobbies. Instead of spending all your time worrying about money, you will be able to save money! You will feel peaceful, clear-headed, and worry-free for the first time in a long while. That’s why we make the process fast.
Bankruptcy has tremendous power to reverse a client’s situation after an unexpected loss of income or unforeseen expenses has thrown their household finances into chaos. Bankruptcy can alleviate a hopeless debt spiral, eliminate interest, stop creditor harassment, halt garnishment, end collections, and even terminate civil suits in progress. We provide clients a fresh start to rebuild their finances and protect some or all of their assets.
When paired with a careful and consistent household budget following the bankruptcy, a client’s credit rating can often build faster than if the client continued to struggle with out-of-control monthly payments and rapidly growing interest. Bankruptcy can allow them with the leverage they need to turn financial devastation into a secure future.
Bankruptcy is not always the best answer. Bankruptcy is invasive and intensive and requires a significant amount of work and attention from the client. It can have substantial up-front costs. Many clients prefer, when possible, to repay their debt obligations and even restore good relations with their creditors.
If you have any leeway in your budget beyond your necessities, it may be possible to address your debts, first restoring them to manageable levels and them paying them off entirely over the course of a couple of years. Sometimes creditors will settle debts for much less than was originally owed. This route is usually not as easy or fast as a bankruptcy, but for many clients, it can be more rewarding. It’s definitely a route to consider before you commit to a bankruptcy. If you are in a situation where your monthly obligations exceed your income, feel free to contact us. We will be happy to examine your case with you and help you plan your next steps. If you decide to pursue bankruptcy, we will be glad to assist you.
We will help you:
- Gather information,
- Prepare your documents,
- File your petition and schedules,
- Notify your creditors,
- Attend your hearings.
We’ll guide you through the myriad choices that each client faces when preparing their bankruptcy to help you get the most out of the process. Bankruptcy isn’t for everyone, but for many, it is a great way to end their slavery to debt and a doorway to rediscovering their independence. Chapter 13 Bankruptcy is also known as Personal Reorganization Bankruptcy. It is the type of Bankruptcy where you pay back your creditors the amount that your budget will allow, usually interest-free. The process starts with you providing us certain records such as,
- The past 2 years of filed federal and state tax returns;
- All of the paychecks records that you received during the most recent 6 calendar months from the month of filing. These records must contain the gross amount of your checks and the itemized deductions for health insurance, taxes, etc. (for example, if you are filing in July, I would need all records from January through June);
- All bank statements of any accounts that are in your name or your name are affiliated with for the past 6 months;
- All car titles in which your name is associated with;
- A current credit report (these can be obtained from various websites for free or a nominal charge. I can access all 3 bureaus for you for a charge of $35.00);
- A list of all property you own. This includes furniture, jewelry, guns, vehicles, etc.;
- A bankruptcy education certificate. This can be obtained from numerous websites for a small fee. The classes usually take less than an hour and cost around $25.00. I recommend www.debtorwise.org.
Chapter 13 Bankruptcy in Missouri
That seems like a lot of stuff and it is. The good news is that once you provide these to us the hard part is over. I use these documents to prepare your bankruptcy forms and once I’m finished you sign and voila! No more creditor harassment. That’s because once you sign and I file your case forms the “automatic stay” kicks in. The automatic stay is just a legalize word for protection. You and your assets are now protected. You will need to complete one more online class and this can be taken after your case is filed from the same website you obtained your 1st class certificate from. This class usually takes less than an hour too and costs around $15.00.
The only other thing that you will have to do is attend a brief hearing called a 341 hearing or a “meeting of creditors” hearing. This is an informal meeting giving your creditors the opportunity to question you about their debts. So, usually what happens at this meeting is the Trustee will ask you a few simple questions concerning the accuracy of your paperwork and you are done with the questioning in less than 5 minutes. Easy huh? So what kinds of debts are dischargeable? Click here. So do I get to keep all my property? Click here for a list of all Missouri Exemptions.
What’s the difference between Chapter 7 and Chapter 13?
There are a number of key differences between Chapter 7 and Chapter 13 Bankruptcy. The biggest difference is the time involved. Chapter 7 is over usually within 4 months of filing. Chapter 7 is also known as a “liquidation” bankruptcy. That is, the Trustee examines all of your property listed on the bankruptcy petition. For a list of the exempt properties click here. Since, most likely, everything you own is exempt, you will keep everything and the creditors will end up getting $0.00. In other words, all of your property is liquidated; if you did happen to have a property that is not exempt, that property goes to your estate and is distributed to your creditors by the Trustee. This situation does come into play on occasion.
Let’s say that you are due a tax refund. If you were to file bankruptcy before you received that refund, you would have to turn over the portion of those funds to the Trustee that was not exempt, namely, Earned Income Credit and/or the percentage of the refund that was accrued by the income you received after the filing of your case. Be sure to ask your attorney about this if you regularly receive a refund or you are expecting one for the year you are filing. Make sure you discuss with us if you file your taxes between January 1st and the time you file taxes as you stand to lose all of your refunds if you receive that refund before the filing of your case.
A Chapter 13 Bankruptcy is sort of like a debt consolidation but with some key differences. In regular debt consolidation, your creditors usually are under no obligation to play ball with you or your debt consolidation company. Even though you are making regular payments, the payments aren’t usually going to anyone particular creditor at any given time. Therefore, they can and often do still pursue collection efforts up to and including filing a lawsuit against you.
Being in a debt consolidation plan is no defense to such a lawsuit. However, under Chapter 13, the creditors have no option but to accept whatever the Bankruptcy Court determines your ability to pay back is. To determine this amount, the Court looks at your income and qualified expenses and out comes a number. That number is what you pay back each month for a period of 36 to 60 months (length determined, among other things, by your income and expenses). You might be paying back 0% or 100%. I can give you a quick and free estimate on your payment plan.
So, you might ask, why would I ever want to file a Chapter 13 instead of Chapter 7?
The answer to that might be—you have no choice. If you make too much money as determined by the means test or have filed a previous Chapter 7 in the past 8 years this is your only option. Also, in some circumstances, Chapter 13 is your best option. If you are behind on mortgage payments, car payments, taxes, among others, this option will enable you to pay back the amount that you are behind, often interest-free. All the while being under total protection from things like harassing phone calls, lawsuits, foreclosures, repossessions, etc. We can assist you with this difficult decision. Please call our office today for a free bankruptcy consultation, either in our office or by telephone. You may also email us anytime here: contact us.