What is Bankruptcy?

Bankruptcy laws have existed for a long time. Bankruptcy allows honest people who can no longer afford to pay all their debts the opportunity to have a fresh start. Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), in many cases the person or persons filing, called the “Debtor”, will be able to keep their possessions. Many Debtors are also able to retain and continue to make payments on homes, cars, and other needed personal items that are financed.

There are many reasons people must seek protection from creditors by filing for bankruptcy protection. Among these reasons are reductions in income, job layoffs, business failures, illnesses, marriage or relationship break-ups, large medical bills, unexpected emergencies, and those cases where our clients have been paying for a long time on high interest rate credit card accounts without progress, or a combination of these factors. Over the years, we have noted that in nearly every case, our clients are good, hardworking, and honest people who have had something upset their financial stability and cause them to seek relief.

The difficult circumstances, which in many cases were not your fault, can all lead to financial stress and unmanageable debt. The debt collection process can start with phone calls and letters, but can also lead to lawsuits. By filing a bankruptcy, you can stop the constant unwanted calls and put a hold on legal proceedings so you can get your financial affairs in order.

If you are doing a personal or business bankruptcy to discharge either consumer debt or business debt, respectively, we can help you file a proper petition so that your debts can be discharged and you get a fresh new start. Filing for bankruptcy is complex and having a lawyer help you file all the paperwork can ensure a smooth process.

Usually a 5 minute call is all it takes for me to get an idea of your situation and for you to get informed about whether filing for bankruptcy makes sense for you. From there, we’ll send you a questionnaire to your email and get the process started. Your troubles can begin to go away with you picking up the phone and calling for a consultation.

While there are six different types of bankruptcies, most consumer bankruptcy filings will fall under two categories — Chapter 7 or Chapter 13.

Types of Bankruptcy Cases

If all you know about bankruptcy is that it can make your debts go away and you get a clean slate, then you're thinking about a Chapter 7 case. It is the most common type of bankruptcy because it can apply to virtually anyone. The other types of bankruptcies are for municipalities, farmers, business owners, or foreign debtors. A Chapter 7 bankruptcy is the best way to seek protection against creditors and take control of your financial affairs. It's a way to stop feeling overwhelmed by wiping out bills you can't pay down or may ever pay off.

A typical Chapter 7 bankruptcy case will last a total of 3-4 months, however, some can be prepared and resolved faster and some may take longer. It will depend on your current situation and whether you have any urgency. Your case will begin with a phone consultation to discuss your financials and intentions. Upon providing you with information about your options, you will receive a bankruptcy questionnaire to fill out online. Once you have completed the questionnaire, we will review your answers, discuss a plan, and if you are ready, begin the petition to be filed. Before the petition can be filed, you will need to complete a credit counseling class. We will review your petition and submit through the bankruptcy court's electronic filing system. A United States Bankruptcy Trustee will be assigned to your case and a 341 hearing, also known as a "meeting of creditors", will be scheduled which you will attend with me. After the hearing, you will receive a discharge of all your debts listed in the petition in about 60 days. Before you receive the discharge, you must complete a post-341 hearing debtor education class that I will file for you. Our firm has handled countless bankruptcy cases and we will guide you through this process and help get you the financial freedom you deserve.
In a Chapter 7 case, you are seeking a fresh start by wiping out almost all your debt. There are, however, some types of debt that cannot be discharged such as some student loans, IRS tax payments, child support or alimony payments, and court fines. In most cases, you can keep all your possessions in a Chapter 7 bankruptcy. But what if you have a house, a wage garnishment from child support payments, or owe back taxes? It could also be that your income is too much and you do not qualify for Chapter 7 debt relief under the "means test". If this is the case, a Chapter 13 bankruptcy will allow you to combine and consolidate all of your debt into one monthly payment. By doing so, you can keep your possessions including real property and after a period of 3-5 years, have your remaining debts wiped clean. This is why a Chapter 13 case is often referred to as a "reorganization".

Similar to a Chapter 7 bankruptcy, the process for a Chapter 13 will also begin with a phone call to our office and a questionnaire. However, a Chapter 13 case will NOT be resolved in 3-4 months. You will have to work hard to keep your belongings, but the relief will be the same in that you can begin managing your life and finances. This is not to be confused with Debt Consolidation which does not result in a discharge of your debt because it is not a plan approved by the United States Bankruptcy Court. Only approved plans under a Chapter 13 will result in a discharge.

Similar to a Chapter 7 bankruptcy, the process for a Chapter 13 will also begin with a phone call to our office and a questionnaire. However, a Chapter 13 case will NOT be resolved in 3-4 months. You will have to work hard to keep your belongings, but the relief will be the same in that you can begin managing your life and finances. This is not to be confused with Debt Consolidation which does not result in a discharge of your debt because it is not a plan approved by the United States Bankruptcy Court. Only approved plans under a Chapter 13 will result in a discharge.
Which bankruptcy case is right for you? Consider some of the following advantages:

  • Chapter 7 bankruptcy typically takes between 3-4 months and is a far quicker way to clear debt.
  • Chapter 13 bankruptcy involves a consolidated repayment plan over the next 3-5 years.

  • Chapter 7 bankruptcy cases are typically "no-asset" cases because the trustee does not have property he can sell to pay back your creditors. Although, if you own an item that is not exempt by the Commonwealth of Virginia, it may be seized and sold to pay back your debt.
  • Chapter 13 bankruptcy cases have debtors who own homes or businesses and have non-dischargeable debt, however, you can keep all your possessions and property.

  • Chapter 7 bankruptcy cases will lead to a discharge of all debt without having to pay anything back.
  • Chapter 13 bankruptcy cases will lead to a partial discharge after an approved payment plan has been paid over the next 3-5 years.

We will fully review your situation and help determine which type of bankruptcy filing is right for you; whether it's a quicker Chapter 7 to achieve debt free status or if you may be better suited in the long run with a Chapter 13 bankruptcy.