Bankruptcy Benefits

The Benefits of Bankruptcy

Upon the filing of a bankruptcy case, creditors are generally barred from commencing or continuing with any/all legal action against you by what is called the “Automatic Stay” of the U.S. Bankruptcy Code. All debt collection including, creditors’ telephone calls, car repossessions, mortgage foreclosures and other law suits must immediately end. All of these actions are usually stopped permanently when the Bankruptcy Court issues its Discharge Order, discharging all dis-chargeable debts. However, some types of legal action are only stopped temporarily. Only for as long as the debtor(s) bankruptcy case remains open or until the creditor files an Application and successfully procures an Order from the Bankruptcy Court lifting the Automatic Stay.

Most consumer bankruptcy cases successfully end with the issuance of the Bankruptcy Courts Discharge Order, which forever discharges all the debtors (general unsecured) debts. The Bankruptcy Court’s discharge eliminates most credit card and medical debts, as well as many other types of general unsecured debt.

Creditors that may have procured a judgment lien(s) against the debtor(s) prior to the filing of the debtor(s) bankruptcy, are usually forever barred from taking any affirmative action to attach the debtor(s) property, garnish the debtor(s) wages or take any other action. This is the case as long as the debtor(s) assets fall within the Bankruptcy Exemptions allowed by the U.S. Bankruptcy Code, which is usually the case.

Chapter 7

Chapter 7 can be filed easily and typically includes the petition, schedule of debts, a statement of finances, and a listing of property and assets. Once accepted, a meeting with the trustee assigned to the case is conducted. Normally the cases are closed and the debt discharged (wiped out) within four months from the filing date. With the discharge, all debts are erased from credit history.

 Chapter 7 bankruptcy is often the simplest option to eliminate debts. It is recommended to engage a lawyer who can ensure the bankruptcy papers are filled properly and the procedure of bankruptcy is completed swiftly.

Chapter 13

Available in a reorganization type of bankruptcy only, such as Chapter 13, is a bankruptcy repayment plan. This plan will allow debtor(s) to payoff unpaid taxes or past-due mortgage payments over a period of up to five (5) years. In a Chapter 13 case, debtor(s) may also be allowed to reclassify a secured creditors debt from secured to completely or practically unsecured, depending on whether there exist any equity in the collateral used to secure the debt, i.e., a second or third mortgage lien on debtor(s) residence may be completely reclassified from secured to completely or practically unsecured, and thereafter discharged at the end of the bankruptcy case when there exist little or no equity in the real property securing the mortgage.

Searching for an attorney for a bankruptcy case in Florida? To learn more about the benefits of bankruptcy and to get started on the road to a financial freedom, contact Alliance Legal Group today at (877) 560-4440.