If You are Like So Many Americans. . . .
If you are like so many Americans, you've been struggling to pay your bills for months but you keep falling behind or you were forced to give up just to survive. The creditor's telephone calls at home and at work are unbearable, you can't sleep at night and your relationships with your spouce, family and friends are suffering. You can't stand being in debt one minute longer.
You are overwhelmed and you need help. You try to explain your situation to the collectors but they won't listen and they don't seem to care. Call bankruptcy lawyers who do care! Call the law firm of Azzinaro, Manni-Paquette PC and they can explain all of the legal options available to you that can quickly improve your situation and give you that fresh start you deserve.
Most people file bankruptcy after a life changing even such as loss of a job, illness, loss of a spouse, or, the outrageous interest rates and penalty fees start adding up faster and faster and higher and higher to the point where you just can't pay anymore.
Typically, clients have given up hope when they first come to our office and feel terrible that they can not control their debt. They are afraid that their friends and family will know about their debt problems. They begin to fear being sent to prison or having everything they own taken from them as some of the ruthless creditors tell them will happen. They become frightened and nervous and they know they have to do something. It seems that no one will let them start over.
The attorneys at Azzinaro, Manni-Paquette PC want you to know that you are not alone. Our clients come from all over Massachusetts and Rhode Island.. We are experienced and knowledgeable in protecting your rights and dealing with your creditors. We will stop the harassing phone calls and threatening letters so you can regain that peace of mind. Everyone is entitled to a fresh start in life. The bankruptcy code provides all of us that right. Do not be embarrassed to call us today for a free and confidential appointment right now.
Chapter 7 Bankruptcy Basics
Bankruptcy is a process that gives a you a financial fresh start, freeing you from overwhelming debt burdens. Chapter 7, also called "liquidation" or "straight bankruptcy," is what many people connect with a bankruptcy case. As a debtor, your assets are sold, creditors receive payment, and you are freed from your debts.
There are several types of bankruptcy, and Chapter 7 is generally the simplest and quickest form. It's available to individuals, married couples, corporations and partnerships. Know what to expect if you file a Chapter 7 case, and how you can have a fresh start within a few months.
Eligibility for Chapter 7
You must be eligible to file for bankruptcy, and the rules vary depending on the type of case you want to file. Bankruptcy laws changed in 2005, making it harder to qualify for Chapter 7 relief.
There is a means test for individuals to qualify for Chapter 7 bankruptcy. Your income and expenses are examined to see how they compare to the standard for your state.
For example, if you earn less than the median income for a family of your size in your state, you can file for Chapter 7 bankruptcy. If you earn more, a Chapter 13 case may be your option, where you pay part of your debts over time with your disposable income.
Eligibility also includes mandatory credit counseling and budget analysis. During your free consultation, we will assist you with addressing the means testing calculations and let you know whether you qualify under a Chapter 7.
Filing a Chapter 7 Case
Bankruptcy starts with filing an official petition, schedules and Statement of financial Affairs in bankruptcy court. You must provide:
- A full list of creditors, along with their claim types and amounts
- The source, amount and frequency of your income
- A list of all your property
- A detailed list of monthly living expenses
Collection Efforts Stop
Bankruptcy law forces creditors to stop all collection efforts against you as soon as your file. This mechanism is called the "automatic stay" and it's one of the main benefits of bankruptcy. Everything is put on hold, and you get much-needed breathing room.
The automatic stay also prevents creditors from filing new lawsuits against you.
Creditors can ask the bankruptcy judge to lift the automatic stay and let them move ahead with collection efforts or lawsuits. For instance, a creditor could show it needs to take immediate action because property could lose value before your case is closed.
Appointing a Trustee
Once you file, a trustee is named to administer your case. Most of the action in your case happens in the trustee's office, not the courtroom. The trustee takes control of your property, unless it's exempt, and starts working through your case.
Exempt Property Is Protected
Some property is protected or exempt from your creditors' claims, and you get to keep it. When determining what is considered exempt, many states allow you to choose and use the state's definition of exempt or the list set out by federal law.
Exempt property can include these property types:
- Real estate such as a residence
- Trade or professional tools, or books
- Unmatured life insurance contracts
- Prescription health aids
- Social Security, veteran's benefits, disability, illness orunemployment benefits
Most Chapter 7 cases are "no-asset" cases, which means that you don't have nonexempt property for the trustee to sell and use to pay creditors. Your bankruptcy petition states whether your case is "asset" or "no-asset." If the trustee doesn't agree, he or she must show why the designation isn't correct.
341 Meeting - Questions on Your Debt
Twenty to 40 days after filing your petition, the trustee holds a first meeting of creditors, called a "341 meeting." You must be present. You're placed under oath, and the trustee and creditors can ask questions about your property and debts. Creditors seldom ask questions.
The only responsibility you have after the 341 meeting is cooperating with the trustee and providing any requested information or documents.
Creditors have 60 days after the meeting to convince the bankruptcy court they should be paid and your debts shouldn't be "discharged."
Discharge and Freedom from Debt
Your objective in bankruptcy is discharge, or the court's order to end your liability for your debts, and your creditors' ability to seek further payment. If creditors haven't persisted in trying to get money from you and the trustee within 60 days of the 341 meeting, your debts that existed before the filing date are discharged or canceled.
There are exceptions to discharge.. which will be discussed during your free consultation. Some examples may include:
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Denial and Revocation of Discharge
Creditors or the trustee can also object to discharge, or seek revocation of discharge, but it's uncommon. Grounds to deny or revoke discharge can include fraud, such as your failure to disclose property, or giving false information during your case.
We can assit you with your decision to whether to file for bankruptcy protection. If bankruptcy is an alternative for you, it's a quick, efficient way to get a fresh financial start.
Chapter 13 Bankruptcy
Chapter 13 is a reorganizational form of bankruptcy. It is most applicable for people who own property or have assets they wish to keep. In a Chapter 13 bankruptcy, you will be required to pay a portion of your debts back over a period of 3-5 years. Upon successful completion of your repayment plan, your remaining eligible debts may be discharged.
How to Bounce Back From Bankruptcy
More than one million Americans filed for personal bankruptcy last year - an increase of more than 30% over 2007. Unforeseen medical bills are a top cause of personal bankruptcy. Other reasons include losing a job, divorce, getting stuck with an unmanageable mortgage, or consumer credit card debt. While a bankruptcy will remain on your credit record for up to 10 years, you can still bounce back and reestablish a good credit rating. So if difficult conditions have led you to file, don't feel hopeless. In a best-case scenario, after having your debts discharged by a court, you could qualify for a car loan with good rates in a year and a mortgage in two to four years.
The path back usually involves vigilant steps to restore creditworthiness. Some possibilities are:
•· Start with one credit card - Get a card with the lowest possible fees and accept a spending limit as low as $250. Consider a "secured" card, which allows the bank to make deductions from a savings account if you don't pay what you owe. Some lenders have cards with 29% rates and $49 application fees, however you can hunt around for better terms. Make sure that the card issuer will report your new payment history to the three main credit-rating agencies so you can establish a record of paying back debts reliably.
Even after you file for bankruptcy, card issuers will be jockeying for your business. "You're a good credit risk," says Alan Pressman, a bankruptcy attorney in Islandia, N.Y. "You have no debt, and they know you can't file again for bankruptcy protection for as much as eight years."
•· Make Prompt Payments 100% of the Time - "A single late payment can set you back by six months to a year," says Evan Hendricks, author of Credit Scores & Credit Reports. "It can undo all your hard work and drop your credit rating by 40 to 90 points." In contrast, paying off debt quickly not only rebuilds your creditworthiness, it also helps you avoid steep interest charges.
•· Ask for Lower Rates, Especially as your Credit Improves - "You have to be patient," says attorney Nicholas Gebelt of Whittier, Calif. "It's going to take about a year of good payment history, but gradually the rates will come down." Some lenders make these adjustments automatically. Even so, it never hurts to treat credit terms as negotiable and to shop around when necessary.
•· Avoid "Credit-Repair" Schemes - Some services assert that they can fix bad credit in two weeks or less, for a fee. These outfits bombard credit scoring agencies with claims that various defaults and late payments didn't happen. That can cause your delinquenciesto be delisted temporarily, but they can ultimately be added back to your credit report.
•· View a Car Loan as the Next Big Step - While car dealers typically want to see at least a year of good payment history before financing a post-bankruptcy buyer, some dealers aren't picky these days Initial rates can be as high as 22%, but reliable payers can refinance at better terms later on. Opting for a used car can keep the costs down.
•· Keep Balances Under Control - Post-bankruptcy borrowers who seem to be handling new debt well will find that their credit limits increase rapidly. That's gratifying but dangerous, says Ira Rheingold, executive director of the National Association of Consumer Advocates in Washington, D.C. "Keep low limits on your cards and live within your means," he advises.
•· Plan for a Mortgage - Some of the biggest home loan programs won't consider borrowers who have filed for bankruptcy in the previous four years. Loans guaranteed by the Federal Housing Administration often provide the fastest path back to home ownership, usually with a two-year wait after bankruptcy. Banks trying to sell foreclosed properties may also be more flexible.
Chapter 7 bankruptcy is often referred to as liquidation bankruptcy. Your property may be sold to pay creditors, however you may be allowed to keep your home or vehicle under some circumstances. At the end of bankruptcy proceedings your unsecured debt and medical bills may be eliminated. Some debts, such as student loans, fines, restitution and most taxes are not dischargeable and will remain your responsibility.
Contact Our Rhode Island Law Office
Contact us today by calling 401-729-1600 to schedule your free initial consultation. Our office hours are from 9-5, Monday through Friday. Evening, weekend and off-site and appointments available.
Azzinaro, Manni-Paquette PC
Attorneys at Law
353 Armistice Boulevard
Pawtucket, RI 02861-2429
Telephone: 401-729-1600 | Fax: 401-729-1611
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