Chapter 7 Bankruptcy is often called the "Fresh Start" bankruptcy. Individuals can file for bankruptcy in a federal court under Chapter 7 (also referred to as "straight bankruptcy" or "liquidation") and are generally discharged of many types of unsecured debts such as credit cards, personal loans, medical bills, and some judgments. Filing a Chapter 7 bankruptcy puts into effect something called an "automatic stay," which immediately stops your creditors from trying to collect. As a result, creditors cannot garnish your wages, empty your bank account, or go after your car, your house, and your personal belongings. In a Chapter 7 bankruptcy, the individual is allowed to keep certain exempt property. Each state has its own set of exemptions and a qualified bankruptcy attorney will be able to outline the type of property that is exempt from liquidation in a Chapter 7. In some cases, all property is exempt and there is nothing for the bankruptcy trustee to liquidate. If you have any questions you should contact Christian for a Free No Obligation Legal Evaluation.
Chapter 13 Bankruptcy is significantly different from a Chapter 7 Bankruptcy. A Chapter 13 is a reorganization of debt, allowing Debtors to repay all or a portion of their debts through a Chapter 13 plan while protecting property and personal assets. The concept is similar to debt consolidation, but unlike most debt consolidation programs, it permits Debtors to pay unsecured debt (i.e. a debt that is not secured by property) down without accruing interest (student loans are an exception) and without having to deal with those annoying calls from debt collectors. Under a typical plan, you make monthly payments to a court appointed bankruptcy trustee for generally three to five years. The amount of your monthly payment is determined by several factors such as the amount of debt you have, your ability to repay and the extent that you have assets. The bankruptcy trustee distributes the money to your creditors.
Don't be fooled by these common misconceptions about filing bankruptcy
I'll never be able to get credit again.
This is perhaps one of the biggest misconceptions about bankruptcy; in fact in many instances it may help you rebuild your credit. Once you file for bankruptcy most of your debts will be dischargeable, and with the discharge your income to debt ratio will improve drastically which will actually help you in the long run. Also once you file you will soon be getting credit card offers again. These credit cards will most likely have low limits and high interest rates, but the use of these cards will help you to start rebuilding your credit score and you will soon be on your way to having good credit again.
I will lose all my possessions if I file for Bankruptcy.
This is absolutely false. In fact, you may be able to keep everything you own. Each state has its own set of exemptions (laws that outline what you are allowed to keep when you file for bankruptcy). You should ask an experienced attorney for more information on what assets you may retain.
I can only file for bankruptcy once.
This is not true, you can file for a Chapter 7 every 8 years and there are different rules for Chapter 13's. You should contact an experienced attorney for more clarification.
At the Law Office of Christian A. DiCicco, Mr. DiCicco will personally lead you through the complete process from beginning to end. He will be by your side every step of the way. Don't be fooled by other firms where you meet with the attorney once and then your case is passed off to a legal assist to complete. Mr. DiCicco will handle your case from your free initial consultation to the discharge of your case.