Our Chapter 7 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 it can be your lifeline. You will not require recovery from bankruptcy. But, you will recover through bankruptcy. If you struggle with your finances, you need an immediate and reliable solution. If you don’t, a financial battle will continue for the coming years, maybe even 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, though, 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, and end collections. It will terminate civil suits in progress to give clients a fresh start on which to rebuild their finances while protecting some or all of their assets. When paired with a careful and consistent household budget after bankruptcy, a client’s credit rating can often be rebuilt. The credit score builds faster when the client opts for bankruptcy over out-of-control monthly payments and rapid interest growth.
Bankruptcy allows leverage they need to turn financial devastation into a secure future. Be aware bankruptcy is not always the best answer.
Bankruptcy is invasive, 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 there is leeway in your budget beyond your necessities, it may be possible to address your debts, restore them to manageable levels and pay them off over the course of a couple of years.
Sometimes creditors will settle debts for much less than was initially owed. This route is usually not as straightforward or fast as a bankruptcy, but for many clients, it can be more rewarding. It’s 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, and attend your hearings. We’ll guide you through the myriad choices 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 7 Bankruptcy is the most common type of personal bankruptcy. It is the type of Bankruptcy most people are familiar with. Basically, the process starts with you providing the attorney certain records such as:
- The past 2 years of filed federal and state tax returns;
- All of the paycheck records 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, we would need all records from January through June);
- All bank statements of any accounts 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. A recommended website is www.debtorwise.org.
That seems like a lot of stuff and it is. The good news is once you provide these to me the hard part is over. We use these documents to prepare your bankruptcy forms and once we’re finished you sign and voila! no more creditor harassment. That’s because once you sign and we 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. But guess what—they hardly ever show up. So, usually what happens at this meeting is we 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 Bankruptcy 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. The Trustee examines all of your property listed on the bankruptcy petition. In Missouri, most everything the average household owns is exempt. 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 not exempt, the 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 you are due a tax refund. If you were to file bankruptcy before you received the refund, you would have to turn over the portion of those funds to the Trustee not exempt, namely, Earned Income Credit and/or the percentage of the refund 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 me 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 the 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. The 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.
Why would I ever want to file a Chapter 13 instead of Chapter 7?
The answer 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 you are behind, often interest-free. All the while being under total protection from things like harassing phone calls, lawsuits, foreclosures, repossessions, etc. My firm handles cases throughout Missouri. We can assist you with this difficult decision. Please call my office today for a free bankruptcy consultation, either in my office or by telephone: (816) 256-8647. You may also email us anytime: Contact Us.