James Piedimonte, P.C.

Many people in this country who are affected by job loss, divorce, high medical and energy bills, and loans with high rates of interest find themselves in deep financial trouble and in need of help.

The bankruptcy system was put in place to allow people to have their debts wiped out and start again. Bankruptcy Reform went into effect in the fall of 2005 which changed the process somewhat, requiring you to submit more information, obtain credit counseling, and fill out a “means test” form to see whether a certain amount of debts can be repaid. But rest assured – despite all of the changes, the bankruptcy system is still firmly in place to allow people who are in trouble financially to get a fresh start.

Stop:
Garnishments, Repossessions, Foreclosures, Lawsuits and Creditor Harassment.

Keep:
Your Home, Your Car, Your Wages.

Through bankruptcy you will get immediate relief, a fresh financial start, and you will protect your home, cars and other assets from creditors' attachments and/or seizures. By filing bankruptcy, you will stop the creditor phone calls, court actions, foreclosures, repossessions, and wage garnishment. Your creditors will stop harassing you.

The choice of chapter depends on many factors individual to your situation, and is one of the most important reasons to get good legal advice before filing. Which chapter is best depends on the nature of your debt and the nature and value of your assets. You may only be eligible for one chapter, or none, depending on many factors.

Chapter 7 is known as "straight" bankruptcy or "liquidation." In a bankruptcy case under Chapter 7, you file a petition asking the court to discharge your debts.

Chapter 7 is the most frequently selected kind of bankruptcy for individuals. The debtor receives a discharge of most or all unsecured debts within several months of filing the case.

If the debtor's income appears high enough to permit a meaningful repayment of debt, the trustee or the court may move to dismiss the case for "abuse". The theory is that to permit someone with the ability to repay some of his or her debt in a chapter 13 plan over 36 months to file Chapter 7 and totally avoid repayment abuses the bankruptcy system.

Discharge of Debts

Almost all individuals who file chapter 7 obtain a "discharge" of their debts. The discharge is a bankruptcy court order which permanently prohibits creditors from enforcing claims against you. However, the bankruptcy court can deny a discharge if you

• Fail to keep or produce adequate financial records (especially important if you have operated a business)
• Fail to explain any loss of assets
• Commit a bankruptcy crime (for example, concealing assets or making a false statement under penalty of perjury)
• Fail to obey a lawful order of the bankruptcy court (for example, an order to turnover property to the trustee)
• Fraudulently transfer, conceal or destroy property

Not all types of debts are discharged under Chapter 7 bankruptcy. Examples of debts that are generally not discharged are:

• Certain taxes
• Unscheduled debts
• Alimony and support obligations
• Student loans and other educational debts
• Government fines
• Debts arising from death or personal injury caused by the operation of a motor vehicle while under the influence
• Criminal restitution debts
• Certain debts incurred in the course of a divorce or separation

Debts that are incurred fraudulently or that are the result of an intentional injury may also be excepted from your discharge. Our attorney can advise you which of your debts, if any, might be excepted from your discharge.

Chapter 13 is called "debt adjustment."  A Chapter 13 Bankruptcy is also called a Debt Reorganization or Debt Consolidation. Chapter 13 is frequently a better choice  if you are in default on mortgages, car payments or if you have more property than can be exempted from creditors in Chapter 7.    The Chapter 13 Bankruptcy can also be used to consolidated credit cards, medical bills, student loans, taxes and other bills at reduced interest and principal.

Chapter 13 bankruptcy allows you to reorganize debt through a court-authorized repayment plan. Filing for a Chapter 13 bankruptcy means all harassment from bill collectors must stop and prevents foreclosure of your home and repossession of your property.

Chapter 13 is often used by people who have fallen behind on home or car payments. It allows you to pay creditors over an extended period of time according to a plan made for you by the court. After making monthly installments over 3-5 years, all remaining debts are wiped away, or "discharged."

A Chapter 13 bankruptcy may also be able to discharge debts which a Chapter 7 bankruptcy cannot discharge. Debtors who have too much disposable income to qualify for a Chapter 7 discharge or have assets they would lose under Chapter 7 may choose instead to proceed under Chapter 13.

In a Chapter 13 case, you are required to make one monthly payment to the Chapter 13 Trustee, to repay some portion of the debt you have. You file a "plan" showing how you will pay off some of your past-due and current debts over three to five years.

Rebuild Credit After Bankruptcy

Although bankruptcy will stay on your credit report for 10 years after your discharge, There are several things you can do to start building your credit again. Two of the most important things you can do are to borrow money responsibly and make your payments on time.

Plan carefully before you borrow.

•  Check your budget Figure out how much you can afford pay for the loan. 

•  Find out exactly how much the payments on the new loan will be . The lender will be able to tell you the exact amount of the payments. Don't borrow without knowing what commitment you're making.

•  Don't forget to leave a cushion —some of your income has to be budgeted for savings and emergencies. If this new loan payment means you're spending all of your monthly income, then, you can't afford the loan.

An experienced attorney will guide you through the process to make it as painless as possible for you, and help you achieve your desired goal: to get back on your feet again while protecting your property, wherever possible.

The fee you pay to your lawyer is money well spent. After all, most creditors will have attorneys representing them who know the system and the rules - don't you want a lawyer on your side to protect your rights?

Bankruptcy Links:

American Bankruptcy Institute

Internet Bankruptcy Library

United States Bankruptcy Court

U.S. Attorneys Office

Federal Bankruptcy Rules of Procedure

Counseling and Education Requirements

Consumer Counseling and Debtor Education Providers

Missouri Public Records Search

Call James Piedimonte at 816-254-6477 to set up an appointment.