Tired Of Debt Collection Harassment?
Living with debt is stressful, especially when times are tough. From debt collectors harassing you endlessly, to the general anxiety around your finances and simply staying afloat, it can seem like there is no way to take back control and get a steady footing.
The good news is that there is a solution that could help you — bankruptcy. At The Cook Law Firm, APLC, we’re a group of experienced and dedicated bankruptcy lawyers that offer both personal bankruptcy services, as well as business bankruptcy services to the great state of Louisiana. Here, we’ll be focusing on our personal bankruptcy services.
The major benefits of bankruptcy include:
Creditor actions are stayed
Debt collection is halted
Foreclosure is halted
Debt collectors are not legally allowed to contact you
After completing the bankruptcy process, debts are eliminated
Filing For Bankruptcy
Bankruptcy has a negative connotation in general, but it’s a system that’s in place to support and assist people who need a viable course of action to reign in their debts, and essentially, reset their financial situation. In fact, at The Cook Law Firm, we think this negative connotation is extremely misguided, and that it actually prevents a lot of people from taking advantage of something that could provide them a major helping hand.
Alimony, child support and other related debts
Debts from DUIs, DWIs, etc
Student loans, however there are exceptions (Check out our resource on student loans and bankruptcy)
Fines or penalties for violating the law
Debts dismissed due to fraud in a previous bankruptcy filing
As we’ve previously mentioned, in the short term bankruptcy can help you by immediately staying your debts. This means that after successfully filing for bankruptcy, the liability of your debt transfers to a bankruptcy trustee, who will oversee the process.
The result of this is that you won’tl experience any more debt harassment (in the case that there you do, contact us immediately), and depending on the type of bankruptcy you file for, you'll either have your debts discharged upon completion of the process, or you’ll create a repayment plan with your creditors. There will be more on this to come.
The two types of bankruptcy that you can file for are Chapter 7 bankruptcy or Chapter 13 bankruptcy. Keep reading to learn about each type of bankruptcy, or follow the respective links below to “jump” to the corresponding section.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy helps individuals discharge their debts without creating a plan for repayment. However, it’s important to note that under Chapter 7 bankruptcy, property undergoing foreclosure and non-exempt property are not protected, and will likely be seized. This property is seized to divide up and repay your creditors.
While this is an intimidating concept, there are plenty of exemptions that you may qualify for, which is one of the many reasons to have an experienced bankruptcy lawyer on your side.
Qualifying For Chapter 7 Bankruptcy
The first step towards completing the bankruptcy process is to qualify. And fortunately, you get a general idea of whether you are likely to qualify on your own. The basis for qualifying for Chapter 7 bankruptcy is earning less than the median household income (check out Louisiana’s census information on that here).
To determine if you qualify, your current monthly income will be compared to the median household income. To get your own idea of your chances of qualifying, calculate your “Current Monthly Income” by averaging all of your income sources for the past six months. Then, if that average is below the median income for your area, you qualify for Chapter 7 bankruptcy.
If you don’t qualify for Chapter 7 bankruptcy, check out Chapter 13 bankruptcies.
Pre-Bankruptcy Credit Counseling
Before you officially file your case with the bankruptcy court, you’ll need to undergo mandatory credit counseling with a court-approved counselor. In fact, you’ll need to present a certificate of completion from your session when you file your case.
In this counselling session, you will have your finances assessed, create a budget moving forward, and also discuss all possible alternative avenues aside from bankruptcy to ensure it’s the best course of action.
Once you’ve acquired your proof of completion, it’s time to move to the next step.
Filing Paperwork With The Court
When it’s time to officially begin the process in the bankruptcy court, you’ll file your bankruptcy petition, schedule, and statement of financial affairs. Note that you can be convicted of perjury if you lie while filing these documents.
After filing, the most common course of action is that the bankruptcy will stay your debts, and debt collection harassment will stop. At this point, creditors will have to approve any communications or collections directly with the court.
Meetings With Your Bankruptcy Trustee
The next step in the process requires meeting with your bankruptcy trustee about once a month. In these meetings, your trustee will work to liquidate any property that you have that is non-exempt, and then distribute those liquidated assets among your creditors.
Following your first meeting with your bankruptcy trustee, your creditors can file complaints against your debt discharge for a period of 60 days. They can either submit a complaint against the debts you owe them or the entire sum of debts that you owe. If complaints are filed, they could affect your case. Contact our bankruptcy lawyers to learn more about potential creditor complaints.
Post Bankruptcy Financial Reconstruction Course
As you’re nearing the official discharge of your debts, you will be required to attend a mandatory financial management counselling course. Think of this session as guidance for your new start. You’ll cover topics covering many aspects of finances, as well as building credit after bankruptcy.
If no complaints are issued in the 60 day period, and the rest of the bankruptcy terms set by the court are met, you’ll be discharged of your debts and officially turning a new leaf. You can expect your official Notice of Discharge in the mail within four to six weeks after the 60 day mark. It’s important that you note, however debt discharge only applies to any debts acquired prior to filing your bankruptcy case.
Final Thoughts For Chapter 7 Bankruptcy
Chapter 7 bankruptcy could be a great way for you to discharge debts that you are struggling with so you can start anew. If you think that Chapter 7 bankruptcy sounds like a process that could benefit you, be sure to contact The Cook Law Firm today. Our expert bankruptcy attorneys will ensure that you have a person who’s knowledgeable in Louisiana bankruptcy law on your side in order to receive the best results from filing.
Chapter 13 Bankruptcy
In Chapter 13 bankruptcy, your debts will be stayed, and a court-approved repayment plan will be created with a bankruptcy trustee. This repayment plan will work to either pay back all or some of the debts you have over the course of three to five years.
Where in a Chapter 7 bankruptcy, your bankruptcy trustee liquidates and redisperces non-exempt property, in Chapter 13 bankruptcy, your bankruptcy attorney will oversee the repayment plan, and your assets will be safe from seizure. This means you can keep your home, vehicles, business, and more. What’s more, under Chapter 13 bankruptcy, there is a potential that debts you can’t discharge under Chapter 7 bankruptcy could be discharged under Chapter 13.
With talented bankruptcy lawyers like those at The Cook Law Firm on your side, a Chapter 13 bankruptcy can be conducted smoothly and effectively. Contact us today if you think Chapter 13 bankruptcy is right for you.
Qualifying For Chapter 13 Bankruptcy
Unlike Chapter 7 bankruptcy, to qualify for Chapter 13 bankruptcy, you must earn more than the median income of your area. To obtain a ballpark understanding of this, check out the census’ data on Louisiana’s median household income, and then calculate your “Current Monthly Income” by averaging the last six months of your gross income.
If your income is over the median household income, you’re one step closer to qualifying for Chapter 13 bankruptcy. Next, you’ll determine your reasonable monthly expenses and subtract those from your monthly income. The government dictates what reasonable expenses mean based on the city or town you live in, and once that’s subtracted from your monthly income, that will determine what remaining portion of your money will go towards paying debtors.
The Chapter 13 Bankruptcy Process
For the most part, the process of Chapter 13 bankruptcy is similar to that of Chapter 7, with the exception of a few additional steps. Here’s what it looks like, from start to finish.
Pre-Bankruptcy Credit Counseling
Like Chapter 7, this first step of Chapter 13 bankruptcy takes place prior to filing your case in court, and is required. You’ll meet with a court-approved credit counselor to overlook your current financial situation, make a budget, and also ensure that there are no other options aside from bankruptcy. After you’ve completed this session, you’ll get a certificate that you file to the court.
Filing Paperwork With The Bankruptcy Court
Once you’ve completed your counseling, you’ll file all of the necessary paperwork with the bankruptcy court under the penalty of perjury, meaning if you’ve lied in any part of your case you could be prosecuted. The paperwork you will submit includes your bankruptcy petition, schedule, statement of financial affairs, and your payment plan that’s required for a Chapter 13 bankruptcy. This plan includes the following components:
You will need to meet with your bankruptcy trustee around once a month throughout the course of your bankruptcy process. After the first meeting, creditors will have a period where they can submit claims to get paid from your bankruptcy case. Additionally, objections to your case by creditors can be raised during this period.
After this period is complete, you’ll undergo a hearing to approve your plan and begin payments. In most situations, you will have to return to court on a regular basis for follow-up confirmation hearings to amend your case and deal with objections as needed.
Within 30 days of your first confirmation, the first payment must be made towards your plan. This continues for as long as you plan and the court dictates, again around four to five years.
As with Chapter 7 bankruptcy, you’ll need to undergo financial counseling before completing your process and having your debts discharged. You’ll cover financial management, credit building post-bankruptcy, and more
Finally, once your plan is complete to the agreed terms, your debts will either be paid off or discharged. Official discharge will likely take a few months following your last payment towards your plan.
Final Thoughts On Chapter 13 Bankruptcy
Chapter 13 bankruptcy can be a saving grace for those who need to file for bankruptcy, but would like to save their assets. While this form of bankruptcy can be great, it’s a long, complicated process that can be efficiently executed with the help of Louisiana’s best bankruptcy law firm. Please be sure to contact us with any questions and to get started with your Chapter 13 bankruptcy filing.
The Cook Law Firm, APLC — Louisiana’s Trusted Bankruptcy Attorneys
The Cook Law Firm is proud to offer Louisiana incredible bankruptcy attorneys to help you with the process. Hopefully, this information has helped you gather an understanding as to whether or not bankruptcy is right for you.
If you would like to employ our services to help you get the most out of your personal bankruptcy filing, be sure to contact us today via the form below. Or, feel free to stop into one of our bankruptcy law offices in either Haughton, Louisiana or Shreveport, Louisiana.
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