Types of Consumer Bankruptcy
There are several different types of bankruptcy proceedings, known by their chapter numbers. Consumer debtors will generally be looking to Chapter 7 or 13 for relief. As soon as a bankruptcy is filed, an automatic stay goes into effect that stops creditors from taking action against you, protects your property from seizure and stops wage garnishments. The Law Office of Andrea G. Green represents consumers, not businesses in bankruptcy.
- Chapter 7: This is the most common type of bankruptcy filed by individuals. For most individuals, the purpose of a Chapter 7 filing will be to relieve them of the burden of debt they cannot afford to pay. The Law Office of Andrea G. Green can review your finances in detail to determine whether you are eligible for Chapter 7 relief.
- Chapter 13: A Chapter 13 will generally be chosen to accomplish a specific goal, such as to protect certain property or to stop or avoid a foreclosure. If you file a Chapter 13, you will be required to make payments under a Chapter 13 Plan for a period of three to five years.
Frequently Asked Questions:
Will I lose everything I have?
The simple answer is "no". Every State, including Delaware, has laws that permit people who file bankruptcy to keep certain property. Having an experienced attorney will make sure that you are able to protect the things that are important to you.
Will filing bankruptcy ruin my credit?
The filing of a bankruptcy will be noted on a credit report for ten years. However, that does not mean that you will be unable to obtain any credit for that entire time; it is simply one of many factors that creditors will consider. Often, filing the bankruptcy and obtaining a discharge will actually improve your credit score by permitting you to get past the old debts you have been unable to pay and rebuild your credit.
Can I list some debts and leave others out of the bankruptcy?
The Bankruptcy Code requires that you list all of your debts. That does not mean that you are prevented from paying some debts. For example, if you have a mortgage and want to keep your home, you will need to continue or resume mortgage payments. (If you have fallen behind on mortgage payments and want to keep your home, Chapter 13 may be the best way to keep that home.)
What is the procedure for filing a Bankruptcy Petition?
First, your attorney will meet with you in a free consultation to obtain some basic information from you and to provide you with additional information about the process. You will be given specific information about the fees and costs associated with the filing. There are documents you must gather and a questionnaire that you will need to complete. When you come back to our office for a second appointment, your attorney will review the documents and information in detail and advise you as to whether Chapter 7 or 13 will best suit your needs and protect your property. As soon as we have all the necessary information and the fees and costs are paid, your Bankruptcy Petition will be prepared. Before it is filed, we will meet with you again to review and have you sign the papers. In most instances, there is one hearing you will be required to attend and that takes place in Wilmington. It is a simple, informal proceeding and your attorney will tell you what to expect and will be there with you.
If I am married, do I have to file with my spouse?
No, although if you and your spouse have joint debts, a joint filing may be advisable. Every person's situation is unique, and it helps to have an experienced attorney review your situation.
What about my retirement savings and benefits?
Funds in a qualified retirement plan are fully protected and cannot be taken from you.
Are there some debts that will not be discharged?
Debts for child support or alimony cannot be discharged. Most student loans are non-dischargeable. Criminal fines and restitution orders cannot be discharged. Taxes can sometimes be discharged.
Do I need a lawyer to file a Bankruptcy Petition?
Nothing in the Bankruptcy Code requires you to have a lawyer. But having a good, experienced attorney who is familiar with the law and procedure can help ensure that the right type of bankruptcy is filed, that your property is protected to the full extent of the law, and that you obtain the full benefit of the discharge. No one wants to file Bankruptcy; but if it's necessary to give you the fresh start you need, we can make the process as smooth and painless as possible.