Are you spinning your wheels in debt? Are you unable to pay off what you owe? Do you have an upside down mortgage or an out-of-control credit card with high interest rates? Do you have medical bills haunting you from a recent sickness or accident?
If these questions sound all too familiar to you, The Mabrito Law Firm may be the answer to your prayers. Among the lawyers in Charlotte NC, our law firm is dedicated to helping clients in financial turmoil regain their footing.
For a free consultation with a conscientious and compassionate Chapter 13 or Chapter 7 bankruptcy attorney in Charlotte NC, call us at 704.808.0557 today.
Consumer Bankruptcy Options Getting out of debt can be easier and cheaper than you think. If you have significant debts, and you cannot foresee a time when you will be able to repay them, either Chapter 7 or Chapter 13 bankruptcy may be right for you.
Chapter 7 Bankruptcy
Also known as “straight” bankruptcy or debt-liquidation bankruptcy, Chapter 7 Bankruptcy is an extremely effective method of wiping out debt, eliminating most types of debt within just a few months. Often, Chapter 7 filers are allowed to keep all of their property, but there are rules about how much property a bankruptcy filer may keep. If filers have more property than they are allowed to keep under the bankruptcy “exemption” rules, they are required to give up the nonexempt assets to be divided among creditors as payment. As compared to Chapter 13, unless there is a special reason for filing a Chapter 13, for most people, Chapter 7 is the quicker, simpler and better choice.
Chapter 13 Bankruptcy
Often called “reorganization” bankruptcy, Chapter 13 Bankruptcy involves creating a financial reorganization plan to make payments on their debts in monthly increments over a three- to-five-year period. At the end of the repayment plan, remaining unpaid balances get erased. In general, Chapter 13 takes longer to complete and entails more requirements than Chapter 7. However, Chapter 13 has some advantages over Chapter 7. If you have fallen behind on your home or vehicle payments, for example, you can use Chapter 13 to save your home or vehicle from foreclosure or repossession. Also, if you are an individual who has nonexempt property that you would lose in a Chapter 7, you may be able to propose a Chapter 13 plan that will allow you to erase your debts and keep all of your property.
Is Declaring Bankruptsy Wrong?
NOT ACCORDING TO THE U.S. CONSTITUTION, FAMOUS ENTREPRENEURS AND THE BIBLE
Did you know that Walt Disney, Henry Ford, Thomas Jefferson, Abraham Lincoln, Willie Nelson and Mark Twain are just a few of the famous entrepreneurs and individuals who have taken advantage of their right to a fresh start in bankruptcy?
People often resist filing bankruptcy out of a sense of obligation. They may tell themselves: “I got myself into this mess, and it’s my responsibility to pull myself out.”
But leaving you with your wheels spinning in debt for the foreseeable future does not help you, your family or society as a whole.
Did you know that the United States Constitution recognizes the necessity of bankruptcy? Article 1, Section 8 authorizes Congress to enact “uniform Laws on the subject of Bankruptcies throughout the United States.”
No lesser authority than the Bible contains several passages instructing money lenders to refrain from charging interest*, and to forgive debts after a period of seven years**.
It’s Called Debt ‘Forgiveness’ for a Reason Bankruptcy laws have been on the books since our country’s founding, in part due to our founding fathers’ disgust with European usury laws, and an understanding that extreme, unworkable debt serves no purpose but to enslave the debtor to his or her creditors.
Decades ago, the Bankruptcy Reform Act of 1978 took further steps to enshrine bankruptcy protection for private citizens and businesses. We have bankruptcy courts that were created to shepherd debtors and creditors through this common circumstance.
Given the exalted place debt forgiveness has in our society, is it right to consider bankruptcy wrong? When used properly, bankruptcy serves an important role in our society. It is a financial tool that can accomplish both financial and social good.
The forgiveness of debts can give honest, hardworking people opportunities to start over, leave behind past hardships, and support themselves and their families.
In my years of working in the financial sector, I learned firsthand that people don’t always end up in debt because of poor decisions, or because they were the losers in a fair contest.
More often than not, the indebted people I see are victims trapped in financial snares set by predatory lending, shady mortgages or high-interest credit card companies. Almost as often, I see people damaged by unforeseen medical conditions, or economic changes resulting from lost jobs and plummeting property values.
How Long Will My Bankruptcy take?
Chapter 7 — Quick and Easy Chapter 7 bankruptcy is sometimes called “quick and easy” when compared to Chapter 13, and for good reason.
In the typical Chapter 7 case – where the bankruptcy filer is entitled to keep all of his or her assets – the entire bankruptcy process only takes between three and four months from the filing of the case to the granting of a bankruptcy discharge.
In those cases where the filer has some nonexempt assets that must be sold to pay creditors, a filer would still typically receive a discharge within three to four months, but the case would remain “open” administratively for some time while the nonexempt assets are liquidated and divided among the creditors. In cases like this, remaining debts that are not paid off from the nonexempt assets are simply “wiped out” by the bankruptcy discharge, and the filer is given a fresh, financial start.
Chapter 13 — More Complicated and Time Consuming Chapter 13 bankruptcy takes between three to five years to complete, with times varying, depending on the length of the repayment plan.
Bankruptcy Timeline While bankruptcies follow no set timetable, there are a few things that must happen for any bankruptcy to proceed:
- Identify your income, debts and assets. Prior to filing either Chapter 7 or Chapter 13 bankruptcy, you should meet with an attorney to thoroughly review your finances, identifying and listing all income, debts and assets.
- Determine bankruptcy type. Prior to filing, you should decide whether to file for Chapter 7 or Chapter 13 bankruptcy. If you wish to pursue Chapter 7, most filers are required to pass a means test to determine their ability to repay debts and their eligibility to file a Chapter 7.
- File for bankruptcy. To file for Chapter 7 bankruptcy, you must file paperwork listing your assets and debts, including exempt properties, and prior to filing, you must take a credit counseling class. Filing a Chapter 13 bankruptcy is much like filing a Chapter 7 bankruptcy, but, in addition, you must file a debt reorganization plan.
- Creditors Meeting. Within about a month of filing, you will attend a mandatory “meeting of creditors,” at which your bankruptcy trustee and creditors can ask you questions about the information in your bankruptcy petition, although, in many cases, creditors opt not to attend this meeting.
- Receive a decision. Chapter 7 bankruptcy discharges are usually granted within two to three months after the creditors meeting. For Chapter 13, a bankruptcy judge must approve your reorganization plan and then you must continue making your plan payments for three to five years depending on the length of the Chapter 13 plan.
- Move on. Depending on the bankruptcy option you choose, you could wrap up your bankruptcy filing within just a few months. Then it’s time for you to start enjoying your fresh start!
Why You Need a Loan Modification Lawyer
Although the bankruptcy process is straightforward, it is riddled with pitfalls that a skilled personal bankruptcy attorney can identify.
Mistakes in paperwork can lead to objections from the trustee or your creditors while your bankruptcy is pending and can come back to haunt you years after your case is closed. Misstatements in the petition can lead to criminal prosecution and significant fines.
Armed with a skilled attorney, however, you may be able to erase your debts, change the terms of your loans or resolve your mortgage problems.