Bankruptcy: Consumer or Business Debt
Chapter 7, Chapter 13, and Chapter 11, when consumer or business debt is burying you. Let Oregon Bankruptcy Attorney, Deborah K. Vincent, help you using the protections available to you through the U.S. Bankruptcy Court.
PROTECT YOUR ASSETS, KEEP YOUR HOME.
FOR CONSUMER DEBT, please review this notice: Notice to Consumer Debtors. Also, “We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”
View videos on Bankruptcy Basics:
Part 1 – Introduction
Part 2 – Types of Bankruptcy
Part 3 – Limits of Bankruptcy
Part 4 – Filing for Bankruptcy
Part 5 – Creditor’s Meeting
Part 6 – Bankruptcy Crime
Part 7 – Court’s Hearings
Part 8 – The Discharge
CHAPTER 7– This is a liquidation bankruptcy designed to wipe out a debtor’s general unsecured debts such as medical bills, credit cards, and judgments. Individuals and business entities can file Chapter 7. Your disposable income must be low enough to pass the Chapter 7 Means Test. If you make too much money to pass the Means Test, you can file under Chapter 13. Chapter 7 allows debtors to quickly discharge most of their debts and get a fresh start on their financial future. Your non-exempt property is sold by the Bankruptcy Trustee to pay your creditors as much as possible.
CHAPTER 13 – This is a reorganization bankruptcy designed for debtors who can pay back their creditors through a repayment plan. It is for individuals only, including sole proprietors. There are limitations on the amount of unsecured debt and secured debt you can have. Effective April 1, 2016, the debts limits for filing Chapter 13 as prescribed by section 109(e) of the Bankruptcy Code have been adjusted as follows: maximum for unsecured debt is $394, 725.00 and $1,184,200.00 of secured debt. If you exceed these maximums, then you must file a Chapter 11. The plan payments cover a time period of three to five years, and debtors keep all of their property. As part of a reasonable plan, creditors contracts and interest rates can be modified by the Court. Some second mortgages may be stripped and never paid under your Chapter 13 plan.
CHAPTER 11 – This is also a reorganization bankruptcy designed for individual debtors whose unsecured and/or secured debt exceeds the maximum limits for Chapter 13. It is also the Chapter for business reorganization. Filing under Chapter 11 can be very expensive because your lawyer must develop a lengthy disclosure statement that details everything about your business, loans, insiders, information about how your business ended up in bankruptcy, and a detailed written plan of reorganization (not just completing a form as in Chapter 13). There are multiple hearings in the U.S. Bankruptcy Court with Chapter 11.
Debtors frequently jump to a conclusion that the only way they can resolve their heavy debt burden is to file bankruptcy. However, in many cases, the debtors financial situation can be improved substantially with advice and guidance from an experienced attorney, and the expense and anguish of filing bankruptcy can be avoided through a financial workout.
A financial workout is a process by which a debtor and creditor agree to debt forgiveness and/or a more favorable repayment plan, lowered interest rates, and other remedies when the debtor states he/she is unable to repay the debt under the current requirements. The financial workout can best be described as exploring alternatives to repayment with your creditor to avoid foreclosure or bankruptcy after a default in your payment terms. Sometimes lenders will write down part of the principal balance, lower interest rates, add past due mortgage payments to the end of your loan so you can be caught up. When lenders/creditors are faced with your potential bankruptcy, many of them become quite helpful and cooperative in resolving your situation. You can always file a bankruptcy, but many times a financial workout with your creditor is all that is required to help you get through your financial crise
Note: It is important to realize that changes may occur in this area of law. This information is not intended to be legal advice regarding your particular problem, and it is not intended to replace the work of an attorney.