What is bankruptcy?

Bankruptcy is a process designed to help businesses and consumers repay or eliminate their debts under protection from the federal bankruptcy court.  Bankruptcies can be classified into two types, reorganization and liquidation.  Under Chapter 7 “liquidation” bankruptcy, the bankruptcy court discharges your debts.  Under Chapter 13 “reorganization” bankruptcy, you put forward a plan before the bankruptcy court, explaining how you will repay your lenders.  Some debts have to be repaid in full, while some are repaid partially or may be not at all.

What exactly happens when a bankruptcy is filed?

When a bankruptcy petition is filed, the creation of an “estate” takes place.  The estate then temporarily takes control of the debtor’s property.  This comprises of all equitable as well as legal interests of the debtor from the date of the filing, including properties owned by others that the debtor has an interest in it.  An “automatic stay” comes into effect as soon as the bankruptcy petition is filed.  This automatic stay prevents the creditors from taking any action against the debtor or his property, without the approval of the bankruptcy court.  The court will issue a Notice of Commencement, informing the interested parties about the filing of bankruptcy.  The notice provides information regarding the date of the meeting of the lenders, the trustee, the case number, the deadline to file proof, and the deadline to file objections.

What is Chapter 7 Bankruptcy?

Chapter 7, also known as “straight bankruptcy” or “liquidation,” is a legal process through which all your debts are completely discharged as soon as the judge shuts your case.  In return for this, you will need to surrender all your non exempt property to a trustee.  The trustee is appointed by the bankruptcy court and is responsible for selling the property to raise money to repay the creditors.  There are certain laws that determine which properties are exempt.  Many people opt for Chapter 7 bankruptcy without losing any property at all, because most of the times they do not own anything that is not exempt.  When you approach Litvin Law Firm, based in New York and Florida, you can rest assured that our expert attorneys will guide you to a course of action which is most suitable for you.  With their extensive experience and knowledge of exemption laws, they can inform you about the properties that are exempt.

How do I qualify for Chapter 7 Bankruptcy?

The Means Test determines whether you qualify for Chapter 7 bankruptcy.  This is a kind of mathematical representation of your financial situation.  The test is quite complicated and if you accidentally file for Chapter 7 bankruptcy without qualifying for it, you could face very unpleasant consequences.  The attorneys at Litvin Law Firm are experienced in such cases and can help you make sure that your Means Test is calculated such that you do not have to face any adverse consequences.

What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy, also known as “wage earners bankruptcy,” is suitable for people who have enough regular income to easily repay their debts through a three or five year repayment plan.  The debtor proposes a repayment plan in compliance with the bankruptcy laws.  In most cases, you will not be required to make the full payment and most of the debt that still remains after the completion of the plan is simply discharged.  The lawyers at Litvin Law Firm will advise you on the right course of action and guide you through the entire procedure.  This type of bankruptcy is beneficial for those who do not want to part with their non exempt property.

Why should I hire an attorney?

You could very well prepare and file your own Chapter 7 bankruptcy petition.  However, this is definitely not advisable, since you would lack experience in bankruptcy law to properly represent yourself.  Preparing and filing a Chapter 7 petition on your own could result in you losing property that could have easily been saved with proper legal assistance.  Chapter 13 is even more complex, as it involves many unwritten rules that cannot be easily accessed by the average person.  Bankruptcy lawyers at Litvin Law Firm in New York and Florida have the expertise to assess the situation accurately and help you plan your repayment strategy in a manner that suits your requirements the best.

Apart from that, the expert team of lawyers at Litvin Law Firm will help you long before you file for bankruptcy.  They will negotiate with your creditors about settling the case before finally offering bankruptcy as the last option.  If they find bankruptcy to be the best possible option, they will help you through the whole procedure and giving you a new lease on life.