New Changes to the Bankruptcy Code What Type of Bankruptcy Should I File? What is Chapter 7 Bankruptcy? What is Chapter 11 Bankruptcy? What is Chapter 13 Bankruptcy? How to File for Chapter 7 Bankruptcy How to find a Bankruptcy Lawyer Bankruptcy Fraud When Bankruptcy is the Only Choice

When Bankruptcy is the Only Choice

BankrupctyNew Mexico bankruptcy laws allow for people to get a new financial start or to work out an affordable payback plan with the bankruptcy court. It is like this all over the country. People can find a Houston bankruptcy lawyer, a bankruptcy lawyer in Maine, California, Wisconsin and in every other state. Many bankruptcy lawyers like Clinesmith Wooten Smith represent clients in other types of cases such as asbestos litigation, trust agreements, wills or other legal specialties.

Purpose of Bankruptcy

For people who are over extended, have had a job loss, an onslaught of medical expenses that they will never be able to pay off or a financial disaster of any magnitude, bankruptcy protection is provided for under federal law.

Types of Bankruptcy Relief

The two types of personal bankruptcy filings are Chapter 7 and Chapter 13. In a Chapter 7 bankruptcy from Melwani Law, PC, there are specific income requirements. A Chapter 7 filer's income must be less than the median income for a similar household. If the filer's income is too high and there is enough disposable to pay off some unsecured debts, the debtor will probably be moved into the Chapter 13 category.

Chapter 13 bankruptcy is a payback plan. The trustee at the bankruptcy court works out a payback plan of the debtor's bills. This plan spans over three to five years, after which time the debtor will be debt free.

Automatic Stay

As soon as the bankruptcy is filed, an automatic stay goes into effect where all creditors must cease collection from the debtor. This includes lien holders, foreclosures, secured and unsecured debts.

Meeting of Creditors

Roughly two weeks after the filing of the bankruptcy, the Meeting of Creditors is held. At this meeting, the trustee has the opportunity to direct questions to the debtor. The secured creditors can work with the debtors at this meeting to either surrender property that secured their loans, pay off the loans or sign a Reaffirmation Agreements where the debtor agrees to pay back the creditor in monthly payments. When a debtor signs a Reaffirmation Agreement, he or she can keep the property securing the loan.

Discharge of Debt

The bankruptcy is discharged after the Meeting of Creditors. From this point on, the debtor has a new start and can slowly begin rebuilding credit. A filer must wait eight years in a Chapter 7 and two years in a Chapter 13 to re-file for bankruptcy.