At Williams and Sechrest, P.C., our attorneys and staff understand that anyone can face circumstances that result in financial distress, sometomes through no fault of their own.  Harrassing creditors, wage garnishments and home foreclosures cause stress that no one should have to live with.  If you are in financial distress, you may be able to get relief through the bankrupty code.  Our attorneys will be happy to sit down with you for a free consultation to discuss your bankruptcy options.

What is Bankruptcy?

In bankruptcy, a person may restructure or discharge debts.  There are two basic types of bankruptcies.  In one type, called a Chapter 13 Bankruptcy, the debtor pays the debts off under a payment plan over time.  In another type, called a Chapter 7 Bankruptcy, some of the debtor’s assets are sold, the money is paid to the creditors, and the debts are discharged.

Can my creditors continue to harass me?

As soon as your bankruptcy is filed, an automatic stay goes into effect, and most creditors must stop trying to collect from you.  Any debt they are able to collect will be through the bankruptcy court.  We can help make sure your creditors do not try to continue to collect from you.

Will I be able to keep any of my property?

A person is allowed to keep some property and still go through bankruptcy.  These are called exemptions.  In Missouri, some of the major exemptions include a limited amount of equity in your home, car and household goods and furnishings.  If you consult with our attorneys, we will discuss the exemptions that may be available to you.

How will bankruptcy affect my credit?

Bankruptcy may have a significant impact on your credit.  In general, a bankruptcy will stay on one’s credit report for 10 years.  This may affect your ability to get credit or even to get employment.  This does not mean, however, that one cannot purchase a home, rent an apartment, buy a car, or even get a credit card within a few years of bankruptcy.  However, those who are newly bankrupt should be very cautious about obtaining any new credit shortly after bankruptcy.

Will all of my debts be discharged in bankruptcy?

There are some debts that will not be discharged in bankruptcy.  These include debts involving fraud, accidents involving drunken driving, student loans, taxes, alimony and child support.  Also, certain credit card transactions made within six months of bankruptcy may not be able to be discharged.

What is Chapter 7 Bankruptcy?

Chapter 7 Bankruptcy is the simplest form of bankruptcy.  It is a “liquidation” and is designed to discharge debt.  Specifically, it discharges unsecured debt, such as credit card bills, medial bills and payday loans.  The bankruptcy trustee will collect all of the property that is not exempt and sell it to pay off creditors.  If all of the property is exempt, the trustee will not have anything to sell.  After this is done, the debtor will no longer owe the creditors any money.

Debtors may be able to keep their houses and cars in Chapter 7 Bankruptcy, but they must continue to pay the loans for this property as if they had not declared bankruptcy.  This is called reaffirmation of the debt.  Debtors may also surrender the property and not have to pay any more on the debt.  In some situations, the debtor may pay what the property is now worth and keep the property, which is called redeeming.

Not everyone is eligible to file a Chapter 7 Bankruptcy.  A person who has enough money to pay back all or most of his debts may not be able to declare Chapter 7 Bankruptcy.  To be eligible, you must first pass an income or means test.  If you fail this test, our attorneys may be able to assist you in filing a Chapter 13 Bankruptcy.

What is Chapter 13 Bankruptcy?

Chapter 13 Bankruptcy is a debt repayment plan for individuals.  Generally, a debtor in a Chapter 13 Bankruptcy must pay his or her monthly disposable income to the Bankruptcy Court to pay off creditors on a payment plan up to 60 months.  In order to declare chapter 13 bankruptcy, the debtor must have a job that provides regular income to be able to successfully make the payments over the 60 month period.

The repayment plan must pay the debtor’s creditors at least as much as the creditors would recieve in a Chapter 7 Bankruptcy, and the court must approve the plan.  If the court approves the plan, the trustee collects payments from the debtor and pays the creditors.  In Chapter 13, the debtor usually keeps all of his or her property.

Although the debtor may not be required to pay all of his or her debts in fill, the debtor is not discharged from the debt until the payment plan is finished, and all payments must be made on time to remain on the plan.

How much does it cost to file for bankruptcy?

In addition to attorney’s fees, there are court filing fees and other expenses such as credit counseling courses and credit reports.  Consult with an attorney to determine how much your bankruptcy would cost.

For additional information of bankruptcy courts, click here. http://www.uscourts.gov/FederalCourts/Bankruptcy.aspx

For additional information on bankruptcy, click here. http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics.aspx