LaRocca Hornik Rosen Greenberg & Patti understands the stress of financial debt as well as understands the complexities of the legal process. Further, the firm is well versed in explaining the different methods of debt relief including, Chapter 7 Bankruptcy and Chapter 13 Bankruptcy.
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The Process
Upon contacting our office, you will be scheduled for a free consultation to review your financial stability. Together with our office, you will answer a detailed questionnaire as to your assets and liabilities, undergo a review of your debts, and we will create a game plan tailored to your needs. We will also provide you a list of items that you will require to proceed with your plan of action.
Should you be eligible for bankruptcy, you will be required to attend a quick credit counseling course and our office will begin the drafting of your bankruptcy petition. At the time of the filing of your petition, a notice will be sent to all your creditors to immediately stop any collection procedures including any harassing telephone calls and letters.
After a period permitting your creditors to make any objections, you will be required to appear for a short hearing to assess whether the bankruptcy petition should be granted. If it is established that you meet the requirements for bankruptcy, an Order will be issued addressing the terms of the petitions acceptance.
Types of Bankruptcy
Chapter 7 – This is the most common of the Bankruptcy proceedings for individuals. Under Chapter 7 all applicable debts will be discharged. Debts that are generally discharged in Chapter 7 include credit card debts, medical bills and other unsecured loans. In other words, your debt will be wiped out. However, in order to proceed with a Chapter 7 Bankruptcy you will be required to pass a “means test”. The means test applies a financial limit and permits only those applications that fall below those standards. Our office will work with you to determine if you qualify for Chapter 7 bankruptcy.
Chapter 13 – If an individual or small corporation does not qualify for Chapter 7 bankruptcy, they may be eligible under Chapter 13. Under Chapter 13, debts are not discharged, but payment plans are arranged for you to pay back the debt that is owed.
Chapter 11 – Designed for larger corporations, Chapter 11 is a manner for corporations to reorganize and pay back their debt.
Bankruptcy Facts/Questions and Answers
When should I consider filing for Bankruptcy?
The timing of filing for Bankruptcy varies by individual. However, a good benchmark to discuss Bankruptcy with an Attorney should begin when your debt begins to rise and your ability to pay back your debt is either difficult or impossible. Another sign that Bankruptcy may be an option for you occurs when the collection letters and telephone calls become a routine disturbance.
How long does the Bankruptcy process take?
The process is relatively quick from the time the petition is filed. Most often, about 30 to 60 days after filing the petition a short hearing (341 hearing) is conducted by a Bankruptcy Trustee. No other court appearances is usually necessary. At the 341 hearing the Trustee will ask questions regarding assets and liabilities. Creditors have the opportunity to also ask questions but they are not extensive if they ask questions at all. Otherwise, the time period to prepare the petition, and make sure that the information is accurate, will be as time consuming as it takes to obtain all the relevant information. Our office prepares you with the necessary information to expedite the completion of the petition with a detailed questionnaire and list at your initial consultation.
Will I lose my house or car as a result of having to file for Bankruptcy?
Although each petition is different, you will only lose your home or your car if the Bankruptcy Trustee believes that they can obtain enough of a profit to meet some of your indebtedness. However, with government credits and the debt that you may have could very well protect those items from being taken in Bankruptcy.
Does Bankruptcy affect my retirement funds such as 401(k), profit sharing, pension or IRA?
Fortunately, retirement funds that are tax exempt by the IRS Code are protected by both Federal and State law and cannot be touched in the Bankruptcy proceeding.
How will Bankruptcy affect my ability to obtain a Mortgage, Auto Loan or Credit Card?
You will be eligible for a credit card immediately. There is nothing preventing your ability to obtain a credit card once the petition is granted. You will also be able to obtain a motor vehicle loan, but, most likely at a higher rate. Obtaining a Mortgage is a bit tougher. There are circumstances when you may be considered for a Mortgage two (2) years following the Order discharging your debt.
Who will know about my petition?
Most likely only those people that you advise of the petition as well as the attorneys, court personnel and creditors that are involved. The proceeding is public but not publicized.
Am I able to leave out a creditor in my petition?
Bankruptcy incorporates all creditors. The benefit of filing the petition is that all debts are discharged. In fact, all creditors will be notified of the Bankruptcy petition.
Can I make large purchases prior to my Bankruptcy filing?
Unfortunately, incurring large amounts of debt knowing that you will be filing for Bankruptcy or in the process of Bankruptcy is considered fraud. The Court frowns on individuals making expenses when they are aware that the costs will be discharged in Bankruptcy.
What is the minimum amount of debt I need to file for Bankruptcy?
There is no minimum amount of debt that is required. However, in moments when you are unsure it is best to speak with an attorney.
If I am married, do both me and my spouse need to file for Bankruptcy?
Not necessarily. If either you or your spouse holds a majority of the debt in their name then only that individual is required to file for Bankruptcy.