Bankruptcy — just the sound of it evokes strong feelings in most people. Although filing for bankruptcy is rarely anyone's first choice when trying to cope with overwhelming debt, the decision to file for bankruptcy can be the right one when made with full awareness of all its consequences. Contact an experienced bankruptcy lawyer to discuss your options.
What You Need to Know about Bankruptcy
Provided by the Law Offices of H. Frank Cahill, in Anchorage, Alaska
If you are considering seeking personal bankruptcy protection, you may be uncertain of your rights, particularly in light of the revisions Congress made to the bankruptcy laws in 2005. The information on this page, is designed to answer your basic questions. For experienced representation in bankruptcy matters, contact the Law Offices of H. Frank Cahill or call our office at 907-222-4905 to set up an appointment.
To learn more about our bankruptcy practice, visit our Chapter 7 bankruptcy page or our Chapter 13 bankruptcy page.
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Contact an experienced personal bankruptcy lawyer! At the Law Offices of H. Frank Cahill, in Anchorage, we have handled consumer bankruptcy filings since 1995. We have a comprehensive understanding of the law and process, including the recent revisions to the bankruptcy laws, and will help you take the steps necessary to use a Chapter 7 or Chapter 13 filing to get a fresh start.
Protecting your personal bankruptcy rights since 1995. At the office of attorney H. Frank Cahill, in Anchorage, we handle all matters related to Chapter 7 or Chapter 13 bankruptcy filings, preparing all the required documents and acting as your advocate in meetings with creditors, the bankruptcy trustee or the court. Contact our office to schedule an appointment.
Consumer Bankruptcy
When an individual falls desperately behind in his or her debt payments, one option may be to declare bankruptcy, a legal proceeding in a federal bankruptcy court that relieves the debtor of some or all of his or her debts. While bankruptcy may not be the best option for everyone, in the right situations, it can provide people with a fresh start. The experienced lawyers at Law Offices of H. Frank Cahill in Anchorage, Alaska can advise you as to whether bankruptcy may be the right move for you.
Bankruptcy Choices for Consumers
Consumers, like businesses, have options in terms of which type of bankruptcy to pursue. These options are set forth in separate chapters of the federal bankruptcy law - called the Bankruptcy Code - and they are commonly referred to by their chapter numbers. Consumers most commonly file either under Chapter 7 or Chapter 13, with a very few filed under Chapter 11.
The 2005 changes to the federal bankruptcy laws created a new requirement that debtors receive credit counseling from an approved agency in the 180 days before filing for bankruptcy under any chapter, with some exceptions.
Most consumer bankruptcy cases are initiated voluntarily by consumers, but under certain circumstances, can arise involuntarily when creditors force debtors into bankruptcy.
Chapter 7
Chapter 7 bankruptcies, called "liquidation bankruptcies," are the most common type chosen by consumers. The Chapter 7 proceedings begin with the debtor's filing of a petition with the bankruptcy court, which triggers the automatic stay - bankruptcy terminology for the cessation of all debt-collection activity. The court appoints a trustee who oversees the case and liquidates the debtor's nonexempt assets to pay off eligible debts to the extent possible.
Not all of the debtor's assets will be sold in a Chapter 7 bankruptcy case because the law specifies that certain property is exempt from liquidation. For many typical consumers, all of their property is exempt or already subject to valid liens, so eligible debts will be discharged without the loss of any property. This situation is commonly called a no-asset case.
Once the trustee has collected any nonexempt assets and paid creditors from the proceeds, any remaining unpaid debts are discharged, meaning that they no longer exist and the debtor has no further obligation to pay them. Some debts, however, are nondischargeable and remain valid, such as taxes, domestic support obligations and damages resulting from a debtor's willful or malicious acts.
Chapter 13
Alternatively, a consumer may choose Chapter 13 if he or she has stable income, believes the crisis is temporary and wants to repay at least some debt. The debtor must have less than $336,900 in unsecured debt and $1,010,650 in secured debt to be eligible for Chapter 13. A Chapter 13 proceeding, called a wage-earner plan, is also initiated by filing a petition and also stops creditors from trying to collect debts. The debtor proposes a debt repayment plan, to which creditors may object. If the court approves the plan, however, the creditors can take no action outside the plan's scope to collect their debts. Once the plan is completed, the debtor is entitled to a discharge, which releases him or her from all debts dealt with by the plan.
A Comparison
Chapter 13 has certain advantages over Chapter 7 in consumer bankruptcies. For example, Chapter 13 allows the debtor to discharge more types of debts. Although many average consumers have only assets exempt from the liquidation requirement under Chapter 7, some may have assets eligible to be sold. For these consumers, Chapter 13 may allow them to retain more of their assets. A consumer's choice between Chapter 7 and Chapter 13 is not necessarily permanent; once proceedings have begun, a case may be converted to a different chapter under certain circumstances.
Conclusion
Sometimes consumers find themselves in such dire financial situations that filing for bankruptcy is their best option. Any decision to file for bankruptcy should be made carefully after consulting an experienced bankruptcy attorney. Contact Law Offices of H. Frank Cahill in Anchorage, Alaska to learn more about your options to protect your financial well-being.
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