Yakima Bankruptcy Attorney
There are few things in life more terrifying than being in crippling debt. It can seem like there is no way out and that no matter what you try, there’s nothing that you can do to get out of debt. Getting out of this type of financial situation can seem impossible, but it’s not.
If you need legal help getting out of your debt, you need the help of a skilled bankruptcy attorney. Contact the excellent bankruptcy attorneys at Symmes Law Group for a free consultation and case review.
What is Bankruptcy?
Bankruptcy is a legal mechanism by which people in too much debt to handle can have their debts forgiven by either paying some of them off in a payment plan or cooperating with a court-appointed trustee to liquidate and sell some assets to distribute to creditors as repayment. In chapter 13 bankruptcy, it is possible that you may have to pay back some of your debts. Alternatively, in chapter 7 bankruptcy you can have your debt completely forgiven.
There are two different types of bankruptcy that are most common for individual debtors: Chapter 7 bankruptcy and Chapter 13 bankruptcy. Both of these bankruptcies have their own advantages and disadvantages.
Chapter 7 bankruptcy is the process by which the bankruptcy Trustee (a court-appointed official who is appointed by the Federal Department of Justice) may sell your non-exempt property and distribute the funds to your creditors. Some of your property (such as your house and car up to a certain value) may be protected or exempt from this sale, meaning that you get to keep it no matter what.
The pros of Chapter 7 bankruptcy are that if you have no non-exempt assets, your unsecured debt (debt that is not secured by collateral, such as credit card debt) will be completely forgiven at no cost to you aside from the court filing fee and legal fees paid to your attorney. You will also have the option to assume, or continue paying, any of your secured properties that you want to keep (such as a car loan).
The cons of Chapter 7 bankruptcy is that you can lose some of your property. While this is almost always desirable over having overwhelming debt, it is still something to think hard about. Also, some people do not qualify for Chapter 7, as Chapter 7 is has income limits or more than 50% of your debt must be non consumer debt. The income limits do change from time to time and are based on the state you live in.
Chapter 13 bankruptcy is the process by which you, your bankruptcy lawyer will create a payment plan that is overseen by a chapter 13 trustee that proposes payments to creditors over the course of 3 to 5 years where you will pay back at least some of your debt.
The pros of Chapter 13 are that you will not have to give up any of your assets. You may be able to pay back a lesser portion of your debt than you actually owe, excessive interest will stop occurring on your debts and you will be given 3 to 5 years to pay it, even if the debt is due right now or several months ago. Chapter 13 bankruptcies can also be removed from your credit report far quicker than Chapter 7s, meaning that you can start to recover your credit and qualify for a home loan right after completing chapter 13 bankruptcy.
The cons of Chapter 13 bankruptcy are that it is a considerable time commitment. If you lose your job or have other substantial financial strain during the 3- to 5-year period, it can be difficult to keep up with your payments. Also, as compared to Chapter 7, you will have to actually pay some of your debt rather than simply having it forgiven.
Why File Bankruptcy?
Filing bankruptcy is certainly a big step. However, when you are far enough in debt, it is a step that can only help you. There are two main reasons why you should file for bankruptcy: the Automatic Stay and Discharge.
The Automatic Stay is a federal bankruptcy law that automatically is applied when you file a bankruptcy. This law stops all of your collectors from engaging in any collection activity whatsoever. If your creditors violate this order, they may be held in contempt of court, and your bankruptcy lawyers can seek damages from them on your behalf.
Discharge comes at the end of the bankruptcy. Discharge is essentially an extension of the automatic stay indefinitely. This means that not only are you absolved of most debts, but your creditors can not take any action to collect them, such as suing you, calling you, or making credit reports on your credit. Violating the discharge order also has the effect of contempt of court.
How to File for Bankruptcy
The first thing that you should do if you decide to file bankruptcy is to contact skilled Yakima bankruptcy lawyers. While you can file for bankruptcy by yourself, it is highly inadvisable because bankruptcy is a highly complicated procedure. In fact, bankruptcy is a highly specialized field of law, meaning that even most non bankruptcy attorneys do not really understand how it works.
After hiring your Yakima bankruptcy lawyer, you will follow a standard procedure. First, you will need to gather all of your financial documents. You and your bankruptcy lawyer will use these to create a bankruptcy plan, which is what you will file with the court. Next, you will need to attend credit counseling online, takes about an hour and will walk you through how bankruptcy works and its consequences.
After this, you will attend a meeting called the meeting of the creditors. This is a meeting where the Trustee and your creditors can ask you questions about your debt, finances and assets; you should know, however, that it is very rare for creditors to actually be present at this meeting, meaning that your meeting will typically take less than 5 minutes.
After these steps, your bankruptcy will be processed, and your debt may be forgiven. Your Yakima bankruptcy attorneys will help you through this process that, while complicated, can be a surprisingly quick and painless process.
The Meeting of Creditors
The meeting of the creditors is a simple procedure where the Trustee and your creditors (maybe) will ask you questions about your debt. These questions are asked for the purpose of ensuring that your debt is not of a non-dischargeable nature, meaning debts that cannot be forgiven in bankruptcy.
Non-dischargeable debts include recent back taxes, student loans (except for in some circumstances), child support, or criminal restitution. It is also possible that private debts to regular creditors might be non-dischargeable if you committed fraud, embezzlement, or willfully and maliciously injured the creditor in the process of getting the debt.
If any of this is true, it does not mean that you are ineligible for bankruptcy, but you should make sure to tell your bankruptcy lawyers upfront so that they know how to help you. The legal standard for fraud and similar acts is very high, and it can be very difficult for your creditors to prove. They might try to get you to admit to it during your meeting of creditors, which is why it is crucial that you have the assistance of a bankruptcy attorney to help you prepare.
One thing that you might be worried about losing in bankruptcy is your car. Your car is a secured debt, meaning that the loan is secured by collateral, your car. Luckily, there are ways for you to protect your car, even if it is not exempted from bankruptcy.
The first way that you can keep your car is by assuming, or reaffirming the loan. This means that you are essentially removing your car debt from your bankruptcy case. In this situation, you will have to keep paying for the car the same as you were before. This is a good idea if you are close to paying off the car or if your car payment is manageable without your other debts.
The other option is to redeem the car loan. What this means is that you will, with the approval of the bankruptcy court, buy the car from the bank at its current value. This is a good thing in that it gets you out of the loan, and you get to keep the car. However, you will have to make a lump sum payment to the bank. This is a good idea if your car is not worth much and you have enough money to make this payment.
Contact Yakima Bankruptcy Attorneys
No one wants to be in major debt. Luckily, you do not have to. There is a legal mechanism for getting you out of debt completely. You can finally feel like you can breathe again and not have to worry about creditors calling you all the time or losing your entire paycheck to debt repayment.
If you are in major debt and feel like there is no way out, you should contact knowledgeable and skilled Yakima bankruptcy lawyers. Symmes Law Group is just that. Contact Symmes Law Group today for a free consultation and case review.