For most consumers, filing a bankruptcy is a once-in-a-lifetime occurrence. But for others, even after being granted a discharge of debt in bankruptcy, they find themselves in that unbelievable situation of having to ask the question – if I filed for bankruptcy protection previously, can I file another bankruptcy and get my debts discharged? The answer to that question depends not only on the length of time since your previous filing, but also the type of bankruptcy you filed. For more information about the difference between Chapter 7 and Chapter 13 bankruptcy filings, click here.
People trying to file bankruptcy starting December 1, 2015, may be in for a surprise. On that day, new mandatory bankruptcy forms went into effect and must be used in all consumer bankruptcy filings under Chapter 7 and Chapter 13. Consumers sometimes try to file their own bankruptcy, without a lawyer to represent them. If they do so now, they will be confronted with at least 98 new pages of legal mumbo jumbo.
Cleveland Metropolitan Bar Association, Cleveland, Ohio
Sponsor: National Business Institute
After you have filed your bankruptcy petition with the Court, the ultimate goal is to get a discharge order from the Court. This is a court order which specifies that all debts which are subject to a discharge have been eliminated – your obligation to pay them has been legally terminated. A bankruptcy discharge order is a powerful thing indeed.
Almost exactly ten (10) years ago, the 109th Congress enacted and then-President George W. Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA).
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Chapter 13 bankruptcy is a powerful debt relief remedy. It allows consumers to enter into a court protected debt reorganization of your debts over a period of time (normally, 36-60 months total).
Chapter 13 debt reorganization plans can, for example, force the mortgage company to accept past-due mortgage payments. This is extremely helpful for consumers who have fallen behind on their home mortgage, but now have the means to get caught up, if given more favorable terms than the mortgage company can offer. This is true even if the mortgage company has already filed a foreclosure action against the homeowner.
One of the important steps in filing a Chapter 7 bankruptcy is to provide your attorney with all the information you can find about the debts that you owe. Normally this is done by giving your attorney all of the bills in your mailbox. Whether an original creditor, a debt collector or a collections attorney, your attorney needs all the names, addresses, account numbers and balances that you can find.
One of the most frequent questions I have been asked in my 15 years (so far) of representing consumers as a bankruptcy attorney is some variation of the below:
• Will I never be able to get credit again?
• Will bankruptcy filing trash my credit permanently?
• Won’t I be better off signing up with a debt management service, rather than filing for bankruptcy protection?
• But my parents told me that only crooks file for bankruptcy….
Consumers who are overwhelmed with debt have two options in Bankruptcy Court. The most popular option by far is Chapter 7, where the consumer’s debts are eliminated without a repayment plan. But Chapter 13 is also a powerful tool for adjusting your debts over a three-to-five year time frame. Which one is right for you?
Chapter 7 Bankruptcy is a powerful tool which can eliminate consumer debt, stop debt collection lawsuits in their tracks and allow debt-strapped consumers to open their mail and answer their phones again.