Tim Waltman

Ruston Bankruptcy Attorney 

What To Know About Filing For Bankruptcy –

Individuals and married couples who file for bankruptcy typically file either a Chapter 7 case or a Chapter 13 case. Briefly, the type of bankruptcy you choose generally should be determined by what results you are needing in relation to the type of debt you have. In many circumstances a person (or married couple) has a choice between a Chapter 7 and a Chapter 13, and the choice made is based on, for example, whether you wish to keep or surrender certain property, such as a house or a vehicle.

Basically, a Chapter 13 bankruptcy case is desirable for those with regular income in order to do one or more of the following things:

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Keep and protect property such as a home or vehicle that you have fallen behind on the payments on; and/or

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Pay significantly less (as well as reducing the interest rate) on a vehicle, furniture, or other personal property that is collateral for a loan; and/or
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Keep certain types of non-exempt property (such as inherited property) that you might otherwise have to surrender in a Chapter 7 case; and/or

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Pay back due taxes that are not dischargeable in a Chapter 7 case (typically taxes incurred within the last three (3) years) while eliminating additional interest and penalties on these taxes; and/or

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Extend the repayment period (as well as greatly reducing the interest rate and possibly paying far less than what is owed) on vehicles and other personal property that is collateral for a loan; and/or

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Retain a significant portion of any pre-existing injury or damage claim you have pending at the time you file your Chapter 13 case.

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In addition, if your income is above a certain level (based on your family size and other factors), bankruptcy law may require that you file a Chapter 13 case instead of a Chapter 7 case.
          In a Chapter 13 case, you (as an individual or married couple filing their case together) will propose a debt consolidation plan that typically lasts from 36 months to 60 months (that is, 3 to 5 years), and you (or you and your spouse if filing together) will make monthly plan payments to the Chapter 13 Trustee over this period of time. The amount of your plan payment, as well as the length of your plan, of course, depends on what types of debt you have, what you are paying for in your case, and what your income and expenses are, as well as other factors. Importantly, in many Chapter 13 cases, unsecured creditors (such as credit card debt, medical bills, and payday loans) do not receive full payment (or possibly even no payment at all in some cases) but these debts are nonetheless discharged (legally erased) when you complete your Chapter 13 case.
 
        Also, very importantly, in a Chapter 13 case, the attorney’s fees can be included in your repayment plan, so all you have to pay in order to file your case is the filing fee (currently $310.00), and this can be paid in two monthly installments of $155.00 each if you need to file your Chapter 13 case very quickly and are unable to immediately pay the full filing fee.
        If none of the above factors apply to your situation, or if you are wanting to surrender property in full satisfaction of the loan against the property, you may very well qualify for a Chapter 7. In most Chapter 7 cases, there is no loss of property because the property is either exempt under bankruptcy law, or there is no equity in the property. Typically, if you file a Chapter 7 and are current on your secured obligations (such as your home loan and vehicle loans) and want to keep the property, the creditor will ask that you sign a “reaffirmation agreement”, in which you are essentially agreeing to be bound by all of the terms and conditions of the loan. Exemption law can be complex, and reaffirmation agreements are legally important agreements; therefore, it is important to understand this, as well as other issues and potential issues, when you file a Chapter 7 case. Also, in a Chapter 7 case, the attorney’s fees as well as the full filing fee must be paid prior to the case being filed. The filing fee is currently $335.00. The attorney’s fees for a Chapter 7 case at our firm vary, depending on the details of the case, the amount of work involved, and other factors.

Still Have Questions About Bankruptcy?

Bankruptcy can be complex and you may have  questions. Please visit our Frequently Asked Questions Page for more information about our services.

 

Frequently Asked Questions

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101 Wynnwood Ave, Suite 2
Ruston, LA 71270

Telephone: (318) 232-1802

Facsimile: (318) 625-0605