Bankruptcy Could Be the Answer You Need

Although the media assures us that our nation’s economy is slowly improving, many of us are suffering under staggering debt that we accrued while trying to survive the recession. And many of us – individuals and businesses – are in such deep financial holes that bankruptcy may be the only way out. If you are not able to pay your bills, turn to Merritt Webb for professional advice. Federal law outlines several types of procedures and our experienced attorneys will consult with you and advise you about the best one for your circumstances.

Types of Bankruptcy

  • Chapter 7 – Straight Bankruptcy, a simple liquidation for individuals or businesses that is uncomplicated and fast
  • Chapter 9 – Municipal Bankruptcy, for resolving the debts of a city or town
  • Chapter 11 – Corporate Bankruptcy, used mostly by businesses as a way to reorganize and repay debts while continuing to do business
  • Chapter 12 – A recovery plan for fishermen and family farmers
  • Chapter 13 – Wage Earner Bankruptcy, a payment plan for people who have a regular source of income and can repay some or all of their debts
  • Chapter 15 – Cases that fall under other circumstances, including international debtors

The types of personal bankruptcy we see the most at Merritt Webb are Chapter 7 and Chapter 13.

Chapter 7

Under this bankruptcy structure, you may claim certain property as exempt under governing law such as motor vehicles with equity of less than $3,500.00, household goods valued up to $5,000.00 per debtor, and tools that you need for work.  Any property that cannot be exempted would be sold by the trustee who will distribute the money to your creditors, who agree to cancel the debt.

There are certain financial obligations that are not included (dischargeable), such as domestic support obligations, certain taxes, or student loans, for which you would still be responsible.  Also, you would continue to receive any Social Security payments or unemployment benefits due to you.

Chapter 13

With this arrangement, you can potentially keep possession of all your property, but would have to pledge part of all your future income towards repaying debts within a prescribed length of time. The amount and timeframe depend on things such as the value of your property, your level of income and your living expenses. This arrangement is only available for people with regular income whose debts are within certain limits.

Under Chapter 13, a plan must be filed with the court to repay your creditors all, or part of the amount that you owe to them.  Payments for this plan must be completed between three to five years, depending on your income.  The court must approve this plan before it can take effect.

Once your payments into the plan are complete, the amount of your debts required to be paid has been satisfied.  The amounts that you are not required to pay are generally discharged except for domestic support obligations, criminal fines, restitution obligations, and most student loans.

Should You Declare Bankruptcy?

Bankruptcy laws were created to help people who are struggling with debt get a fresh start. Whether you file Chapter 7 and liquidate your nonexempt assets to pay off debts, or you file Chapter 13 and create a payment plan to satisfy your creditors, you will find relief. Once you have filed, your creditors are no longer allowed to call or threaten you to try to collect.

Consider taking this step if you are having trouble paying your rent or mortgage or have been evicted; if you can’t make your automobile payments or it has been repossessed; if you aren’t paying your bills each month and are having trouble paying utilities or buying food; or if you are getting calls and letters from creditors threatening lawsuits. We at Merritt Webb are experienced and ready to walk you through the process and help you get a fresh start.

Call us at 1-888-802-3423. You can also fill in the online “How May We Help You?” box or go to the “Contact Us” tab and click on the “Are You Contemplating Bankruptcy?” link to complete a survey about your situation.

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