When To File

When a person becomes overwhelmed by debt, they can begin to feel as if their current financial troubles are permanent. Harassing phone calls, letters, or emails from creditors can be disrupting to a life and add to the illusion that there’s no way out. Fortunately, federal law provides qualified consumers with protection from creditors and a clear path to a fresh start. Generally, filing for bankruptcy protection will bring an immediate end to creditor phone calls, lawsuits, foreclosures, repossessions, and wage garnishments.

It may seem counter-intuitive, but filing for bankruptcy can be beneficial to all parties involved. First, the debtor receives relief upon filing (i.e. an Automatic Stay prohibits creditors from communicating with the debtor directly), and a well-deserved chance to breathe while the bankruptcy process plays out. Creditors get an opportunity to file their claims with the Banruptcy court, avoiding the expense of suing the debtor in a separate civil action. Finally, the government has a substantial interest in helping overly burdened consumers return to a place of financial stability—citizens who do well financially pay more taxes and inject more money into the economy!

What To File

The different types of bankruptcy are identified by their corresponding chapters in the federal bankruptcy code. Most consumer filers use chapter 7 “straight” bankruptcy or chapter 13 “reorganization” or “consolidation” bankruptcy. Both primary types of consumer bankruptcy are designed to provide relief from overwhelming debt by giving the debtor a “fresh start”. Both usually provide the debtor with immediate relief from harassing calls, letters and lawsuits and may stop wage garnishments, foreclosures and repossessions.

Chapter 7: Liquidation

In Chapter 7 bankruptcy, debtors may eliminate most types of debts and in return must surrender assets that are not protected by law. Because the law provides protection for homes, retirement accounts, some automobiles and other property, many debtors do not have to give up any property. A typical case takes about four months and does not usually require appearance in court.

Chapter 13: Consolidation

In Chapter 13 bankruptcy, debtors may consolidate their debts by paying into a specially-designed plan (typical plans are 5 years). By complying with the plan, the debtor may be forgiven for a portion of most types of debts which he or she cannot afford to pay. Usually, it is not necessary to give up any assets in a Chapter 13, although you must pay those debts that are secured by collateral you intend to keep (e.g Car, Home, etc.). Chapter 13 is often used to stop or prevent foreclosure of the debtor’s home, permitting an opportunity to catch up late payments over time.

What R&R Can Do For You?

For more than 20 years, the attorneys at Risen & Ryan have been helping clients across Northwest Florida get the debt relief they need. If you’re receiving harassing phone calls, letters, or emails from creditors, contact our office today to schedule your free consultation. Risen & Ryan is designated a debt relief agency, pursuant to Federal Law, and our attorneys help debtors file for relief under the Bankruptcy Code. Contact us today for a free consultation to determine if Chapter 7 or 13 Bankruptcy is right for you.

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