PORTLAND LEGAL CENTER PA - Legal Services at Reasonable Cost Since 1987.
YES, YOU CAN AFFORD TO FILE BANKRUPTCY
Stop harrassing phone calls.
Stop foreclosure proceedings.
Stop disclosure proceedings.
Stop wage garnishments.
Remove liens from your property.
Eliminate most debts.
CHAPTER 7 BANKRUPTCY FROM $700 plus filing fees.
Portland Legal Center has been actively practicing bankruptcy law since 1987. Many firms have recently added bankrutcy law to their practices as it has become "trendy" with the declining economy. Among the questions you should ask a potential bankruptcy attorney are: 1. How long have you been practicing bankruptcy law and how many successful cases have you handled. 2. Who will be handling or preparing my bankruptcy? Will it be a licensed attorney, a paralegal , a "legal assistant" a secretary, a typist, or some other person?
At, Portland Legal Center I, Edward S. Daigle, an experienced bankruptcy attorney will handle your case from start to finish and will still be available to answer your questions after your case has been dischagred. I have successfully represented Debtors in many Chapter 7 Bankruptcy Proceedings. If you are thinking about filing Chapter 7, then please contact me to see how we can help you resolve your financial difficulties. The following are answers to some general questions regarding bankruptcy.
WHAT IS CHAPTER 7 BANKRUPTCY?
Chapter 7 Bankruptcy, also known as straight bankruptcy or liquidation, is the simplest, most straightforward form of bankruptcy and eliminates most unsecured debt, such as credit cards, medical bills, and personal loans. Other debts such as child support and student loans can not be discharged in a Chapter 7 Bankruptcy.
The filing of a petition under Chapter 7 stops most actions against the debtor or the debtor’s property. As long as the stay is in effect, creditors must stop all collection actions, including calling the debtor, initiating or continuing any lawsuits, Disclosure Proceedings and the taking of your property. This stay arises by operation of law and requires no judicial action. Creditors normally receive notice of the filing of the petition from the court within about a week after filing, but Debtors may also give notice to creditors to speed up the affects of the automatic stay.
Bankruptcy law provides that an individual debtor can protect some property from the claims of creditors either because it is exempt under Maine law. Remember if you file a joint case with your spouse you each get these exemptions. In Maine you are allowed to keep up to $47,5000 in equity in your personal residence, $95,000 if you are over 60 or disabled. There are many other exemptions including $5000 for a motor vehicle, $750 for jewelry, $5000 for tools of trade and $200 per item for personal and household goods. There are also exemptions for pensions and retirement accounts such as IRAs and 401Ks. Because of these exemptions most cases will be "no asset" cases meaning you will keep all your property. If a creditor has filed a lien on your exempt property, you may be able toeliminate the lien.
MEETING OF CREDITORS
A “meeting of creditors” is usually held about a month after the petition for bankruptcy is filed. The debtor must attend this meeting and I will accompany you. Despite the name, creditors almost never appear. The meeting is a very informal affair. The trustee who runs the meeting will swear the debtor in and briefly question the debtor about their assets. The trustee may also request additional information.
CHAPTER 7 DISCHARGE
A discharge releases the debtor from personal liability for discharged debts and prevents the creditors owed those debts from taking any action against the debtor or his property to collect the debts. Most claims against an individual chapter 7 debtor are discharged. A creditor whose unsecured claim is discharged may no longer initiate or continue any legal or other action against the debtor to collect the obligation. A discharge under Chapter 7, however, does not discharge an individual debtor from certain specific types of debts. Among the types of debt which are not discharged in a Chapter 7 case are alimony and child support obligations; certain taxes (some taxes are discharged); student loans, fines, debts for willful and malicious injury by the debtor to another, and debts for death or personal injury caused by the debtor’s operation of a motor vehicle while the debtor was intoxicated. The debtor is still responsible for these nondischargable debts after the bankruptcy case has concluded.
WHAT IS CHAPTER 13 BANKRUPTCY ?
Chapter 13 is frequently referred to as a “wage earner” plan, although it actually applies to individuals with regular income from any source, not just wages. It is used by individuals employed by others or self-employed in their own business to re-pay their debt over a reasonable period of time. Chapter 13 permits a debtor to pay a percentage of the debt back based on the debtor’s ability if the debtor cannot afford a full payback. A Chapter 13 may have to be filed if the Debtor has a larger income and so is not eligible to file a Chapter 7 under the "means test" required under the Bankruptcy Reform Act.
CHAPTER 13 TRUSTEE
Upon the filing of the petition a trustee is appointed by the United States trustee to administer the case. Chapter 13 plan payments are made to the trustee and the trustee uses this money to make payments to creditors
The filing of the petition under Chapter 13 automatically stays or stops most actions against the debtor or the debtor’s property. As long as the stay is in effect, creditors must stop all collection actions, including calling the debtor, initiating or continuing any lawsuits, Disclosure Proceedings, filing of liens against your property and the taking of your property including foreclosures of real estate. Creditors receive notice of the filing of the petition from the Court. Unlike Chapter 7 the stay in Chapter 13 also protects persons who have cosigned for you.
One of the most common reasons for filing a Chapter 13 is to stop the foreclosure of your home. Chapter 13 then affords the debtor a right to cure defaults on long-term home mortgage debts by bringing the payments current over a reasonable period of time. The debtor is permitted to file a Chapter 13 and cure a default with respect to a lien on the debtor’s principal residence up until the sale of the property.
PLAN OF REPAYMENT
The debtor must file a Chapter 13 plan with the petition or shortly thereafter. The Chapter 13 plan will in most cases provide for the current payment of secured debts such as home mortgages and car loans and the "cure" of any arrearages on those loans. The plan will also provide for the paying of some percentage of unsecured debt such as credit cards and personal loans. Plans, which must be approved by the court, provide for payments of fixed amounts to the trustee on a regular basis, typically monthly. The trustee then distributes the funds to creditors according to the terms of the plan. The plan will generally run from three years to a maximum of five tears.
MEETING OF CREDITORS
A meeting of creditors is held in every case, during which the debtor is examined under oath. The debtor must attend this meeting. Creditors rarely attend. If a husband and wife have file one joint petition, they both must attend the creditors’ meeting. The trustee runs the meeting and questions the debtor. The trustee will approve of the plan or make suggestions as to how it should be modified.
CONFIRMATION OF PLAN
After the meeting of creditors is concluded, the bankruptcy judge must determine at a confirmation hearing whether the plan is feasible and meets the standards for confirmation set forth in the Bankruptcy Code. Creditors, who will receive notice of the hearing, may appear and object to confirmation. While a variety of objections may be made, the most frequent ones are the payments offered under the plan are less than creditors would receive if the debtor’s assets were liquidated, or that the debtor’s plan does not commit all disposable income for the three-year period of the plan.
If the plan is not confirmed, the debtor has a right to file an amended plan. The debtor also has a right to convert the case to Chapter 7 if the case could have been filed as a Chapter 7 initially.
The provisions of a confirmed plan are binding on the debtor and each creditor. Once the court confirms the plan, it is the responsibility of the debtor to make the plan succeed. The debtor must make regular payments to the trustee, which will require adjustment to living on a fixed budget for a prolong period. The trustee usually asks that the debtor's employer withhold the amount of the payment from the debtor’s paycheck and transmit it to the Chapter 13 trustee. Furthermore, while confirmation of the plan entitles the debtor to retain property as long as payments are made. The debtor may not incur any significant new credit obligations without approval of the trustee. If the debtor fails to make payments the trustee will move to dismiss the case and the case may be dismissed without the debtor receiving a discharge. If the debtor is unable to make payments he may also convert to a Chapter 7 if a Chapter 7 could have been filed initially.
CHAPTER 13 DISCHARGE
The Chapter 13 debtor is entitled to a discharge upon successful completion of all payments under the Chapter 13 plan. The discharge has the effect of releasing the debtor from all debts provided for by the plan or disallowed by the Court with limited exceptions. Those creditors who were provided for in full or in part under the chapter 13 plan may no longer initiate or continue any legal or other action against the debtor to collect the discharged obligations. In return for the willingness of the Chapter 13 debtor to undergo the discipline of a repayment plan for three to five years, a broader discharge is available under the Chapter 13 than in a Chapter 7 case. As a general rule, the debtor is discharged from all debts provided for by the plan or disallowed except certain long term obligations (such as a home mortgage) on which payments will not be completed until after the last payment under the Chapter 13 plan is due, debts for alimony or child support, debts for most government funded or guaranteed educational loans or benefit overpayments, debts arising from death or personal injury caused by driving while intoxicated or under the influence of drugs, debts for restitution or a criminal fine included in a sentence on the debtor’s conviction of a crime. To the extent that these types of debts are not fully paid pursuant to the Chapter 13 plan, the debtor will still be responsible for these debts after the bankruptcy case has concluded.