Many financial institutions make credit too easily available.  This contributes to the financial problems tens of thousands of consumers experience every year.  Other common causes of overwhelming debt are medical problems, job loss, and divorce.  Whatever reason you are experiencing financial difficulty you should speak with a trained professional to determine if bankruptcy might be right for you.

Bankruptcy is not right for everyone.   For some folks, simply entering into a consumer credit counseling program will allow them to alleviate their debt problems.   A drawback to this option is that it usually takes several years to complete a program and your creditors do not have to agree to work with you. 

Therefore, we may determine from the facts about your situation that filing for bankruptcy protection is the right answer for you.  This solution will often allow you to get out from under all or part of the debts you owe.  Further, the bankruptcy code usually allows individuals who file for bankruptcy to keep most, if not all, of their personal property as "exempt property". 

What is bankruptcy and what does filing bankruptcy entail? 

The most difficult part for most people is recognizing how badly their financial picture has become.   Some are embarrassed or feel that they have somehow failed.   I find that most often something unexpected has happened in their life which leaves them drowning in debt with no other real option. 

There are several types of bankruptcy.  However, I focus here on the two most commonly used.   Most private individuals will file under either Chapter 7 or Chapter 13. 

Chapter 7 - is often the preferred form of bankruptcy.   It is the quickest and allows many debts to be discharged.  It allows it's users to get a fresh start without the overwhelming burden of too many debts.  Most people receive their discharge in as little as 6 months.  However, the new bankruptcy code (effective 10/17/05) requires individuals with income exceeding the state's median income to undergo a means test to determine if they must file a Chapter 13. 

Chapter 13 - is often used when a house or car payment is running behind and the filer wants to keep the asset.  It is also used when a filer has significant income and is unable to qualify for a Chapter 7.  The filer must have a source of income to make payments into the Chapter 13 plan.   A plan can run as long as 60 months.  In other words, in a Chapter 13 you will make payments into a federally supervised repayment plan.  These payments are then paid out to the creditors in your plan. 

Documentation:  I said earlier that making the decision to file was perhaps the hardest part.  That is true - emotionally.  But for most folks - the most difficult part is gathering up all the information we will need to prepare their case.   In order to file for any type of bankruptcy protection - and it should go without saying - you must disclose completely and truthfully all of your assets and lots of other financial information.  Failure to do so - completely and truthfully - can result in criminal prosecution.  No one wants that to happen.  Which is why I, and my staff, will work so closely with you.  We want to make this process as smooth as possible.   Your providing the necessary documentation is crucial to achieving this goal. 

Chapter 7 and Chapter 13 - Once all the necessary documentation has been received we compile the information for the court.  You will review this information with me and sign the resulting bankruptcy petition.  Your petition is then filed with the court.  Usually, you will only be asked to attend one hearing which takes place 45 - 60 days after filing.  This hearing is known as the "341 Meeting of Creditors".  The hearing is usually very short.  You will be asked to confirm the information in your bankruptcy petition.  Your creditors are allowed to attend this hearing.  However, very few ever attend. 

In a Chapter 7, you will usually receive a discharge of your debts in about 4 months.  In a Chapter 13, you will begin to make payments to your plan within 30 days of filing it with the court.  These payments will continue until the plan is closed.