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Bankruptcy specifics
Bankruptcy is a legal way to help people solve their bill problems. It's designed for people and businesses that can't pay their debts and need help.
Bankruptcy laws have been around since Biblical times; for a more detailed discussion, see the article "Bankruptcy and the Bible." And though the rules have changed over the past few thousand years (for example, we don't put people in jail when they can't pay their bills) the goal is the same - to level the playing field between people who owe money and the people to whom that money is owed.
When a person is discharged in bankruptcy, they no longer can be held personally responsible for most pre-bankruptcy debts.
There are two main types of consumer bankruptcy: Chapter 7 and Chapter 13. (The other two chapters, Chapter 11 and Chapter 12, apply to corporations and people who don't qualify for a Chapter 13, and to family farmers.
For more information about Chapter 13, please take a few minutes to read through the rest of this site.
Chapter 13
Chapter 13 provides a way for you to pay back your creditors, in whole or in part, usually over five years. You must have less than a certain level of debt in order to qualify for Chapter 13.
Chapter 13 gives you the chance to stop a foreclosure and catch up on the arrears. It can stop wage garnishments, bank attachments, liens and levies (even IRS tax levies). It also has a special provision that protects co-signers or people who have guaranteed your debts from collections during your case. You can think of Chapter 13 as consolidation loan under which you make payments to a trustee who then distributes payments to creditors.
A Chapter 13 starts when your petition is filed with the Court. Documents relating to income and expenses, debts, property (real estate as well as personal property-your "stuff"), and other financial disclosures must be prepared and filed.
Filing a petition under Chapter 13 stops most collection actions, but not everything. In addition, under some circumstances the automatic stay may exist for only a short period of time.
The automatic stay stops the foreclosure, a garnishment or attachment as soon as you file the petition. You may then use the Chapter 13 Plan to bring past-due payments current over time, usually five years.
About six weeks after you file the petition, the Chapter 13 trustee will hold a meeting of creditors. About a month after the meeting of creditors, is the Confirmation Hearing (although often we usually work matters out with the trustee to avoid your having to appear in Court). At the Confirmation Hearing, we ask the Court to approve your Chapter 13 Plan. If the Trustee agrees, your Chapter 13 Plan is approved, and so long as you make your monthly trustee payments, you're fine. If it isn't approved the first time, we submit an Amended Plan, and have a new Confirmation Hearing.
A successful Chapter 13 bankruptcy involves filing a Plan and sticking to the Plan. Simple, right? Not necessarily-because the majority of Chapter 13 bankruptcy cases are filed without a lawyer or with a lawyer who believes that his or her involvement ends when the Plan is confirmed.
If you want a lawyer who doesn't want to be bothered with you once the Plan is confirmed, don't hire me. I have better things to do than to file Chapter 13 bankruptcy cases that won't work.
When we work together you can be sure that your Chapter 13 Plan will be as effective as possible. If the Plan needs to be changed to make your case go through smoothly then I'll personally make sure the issues are handled quickly and efficiently. After all, there are few things worse than filing a Chapter 13 bankruptcy and losing the attention of your lawyer!
It's up to you to make your Plan a successful one, and it's up to me to help. You are required to begin making your plan payments within 30 days of the date the case is filed, even before the Meeting of Creditors or Confirmation Hearing. If there is a problem that prevents you from making Plan payments you need to let me know so that we can consider your options. Remember, a Chapter 13 Plan is a living entity - if you lose your job, suffer a change in circumstances or just misjudge your ability to make payments, there are often things that we can do to make it work for you.
I'm sure you have many questions. For a FREE CONSULTATION,Call Russack Associates, LLC. at (443) 569-3931 and I will be more than glad to offer you my advice.