Bankruptcy Lawyer: Helping you Start Life Afresh

When faced with unmanageable debt, declaring insolvency is often the only solution. Given the complex array of liquidation legalese, seeking professional counsel from an experienced bankruptcy lawyer is imperative.

Understanding Insolvency Laws
There are two major subsets of the Bankruptcy Code under which individuals can file for insolvency, provided that the eligibility guidelines are adhered to. Chapter 7, also termed liquidation discharge allows for a complete write-off of debt the declaring party is eligible for a complete write-off of all payments owed. Filing under Chapter 7 liquidates the assets but absolves the debtor from any existing liability and protects them from foreclosures, repossessions and lawsuits resulting from their current debt.

Chapter 13, on the other hand, provides individuals with a manageable repayment plan to help pay off monies owed within a scheduled duration, during which time the creditors are not permitted to harass or otherwise follow-up on the payments with the creditor. When filing for bankruptcy under Chapter 13, the law offers individuals the opportunity to still honor the dues but with some relaxation in repayment terms and with minimal or no interest payable. Following complete repayment the discharge notice is issued by a trustee appointed during the court process. Unlike Chapter 7 which involves liquidation of assets, Chapter 13 means restructuring debts in such a way that creditors' interests are also protected adequately.

Eligibility Guidelines
Most individuals prefer filing for insolvency under Chapter 7, but determining eligibility requires conforming to a set of guidelines set forth within a Means Test. The first step is to verify the debtor's annual income which is then compared against the median income range within the particular geographic area. Individuals whose annual income falls below the average income range automatically qualify for filing under Chapter 7. Aside from income analysis individuals need to undergo mandatory credit counseling to avoid future debt accumulation and setup a repayment schedule if applicable.

In the event that one does not qualify for Chapter 7 insolvency claims, the means testing analysis allows the state to evaluate the other disposable income sources to facilitate filing under Chapter 13. In general, individuals with some reliable income source are typically advised to file only under Chapter 13 since this allows the debtor enough resources to help pay off creditors over time, usually within a stipulated period of 3 to 5 years. Regardless of the type of insolvency filed for, debtors are also protected by the Fair Debt Collection Practices Act, which requires that creditors engage only in ethical collection processes.

Why You Need a Bankruptcy Lawyer
The law provides a well-defined system for debtors to resolve their debt in a manner that allows them to still resume productive life post insolvency. Yet, understanding the complex array of legal terms and statutory requirements can be taxing to any individual facing an imminent insolvency.

A competent bankruptcy lawyer brings the right skills and knowledge and can handle every aspect of the filing beginning from document submission, negotiation, and supervision of all legal proceedings to ensure a positive outcome. Consult with an experienced attorney to help assess your financial situation and understand how the law can help you make a fresh start.