The attorneys and staff at Bowman & Associates are here to help guide you through the complex and daunting task of filing for Bankruptcy. The typical bankruptcy filer is a person already in fragile economic circumstances, often with large amounts of credit card debt, who then suddenly faces a spate of hard luck (loss of job, injury, divorce, uninsured medical expenses), resulting in mounting penalties and an unpayable amount of debt.
Bankruptcy law is designed to help people just like this, who need assistance in making a clean break — a “fresh start” on life, rather than spend the rest of their lives being crushed by the burden of unpayable debt.
There are two main types of bankruptcies for consumers:
Chapter 7 Bankruptcy Attorney
Chapter 7 Bankruptcy allows you to eliminate most unsecured debts in a matter of months in return for giving up all “non-exempt” property — if you have any.
Most people who file for Chapter 7, have no available non-exempt property or equity. Whatever they still own by the time they file is either protected by exemption laws, or pledged to a secured creditor as collateral for a debt, and therefore not available to pay off unsecured creditors.
These are known as “no asset” bankruptcies, and most Chapter 7 Bankruptcy filings are of this type… 
Chapter 13 Bankruptcy Attorney
Chapter 13 Bankruptcy takes 3 to 5 years. Instead of giving up property, you repay a portion of your debts and live within a strict budget that is monitored closely by the bankruptcy court trustee. If you can’t make the required monthly payments, your Chapter 13 bankruptcy fails and your debts will remain (unless you convert to a Chapter 7 bankruptcy).
Chapter 13 is commonly used by people who are behind on secured debt payments (e.g., mortgages) and want to propose a Chapter 13 plan to catch up on these payments over time.
Under the new bankruptcy law, which took effect in October 2005, a mathematical formula called the “means test” establishes an initial determination of the kind of bankruptcy you qualify for: Chapter 7, Chapter 13, or either. This formula takes into account…
Foreclosure Attorney
Bankruptcy Could Help Save Your Home From Foreclosure
As the mortgage crisis continues, more and more people facing foreclosure are also being forced into bankruptcy. It appears that a lot of homeowners who couldn’t make their mortgage payments have been using credit to get the cash that they need. Once the credit cards and the credit lines are maxed out, of course, these people find themselves in an even bigger financial mess.
Many homeowners who are considering bankruptcy are also in the process of trying to get a loan modification with their lender because they have a foreclosure pending. They are frequently told by their lender that they are not qualified for a voluntary loan modification because of their high debt-income ratio. What this means is that if you owe a lot in other debts besides your mortgage, the bank may think that even though your mortgage payments are lower after your loan is modified, it would still be difficult or impossible for you to keep your home because you have other debt obligations that must be paid Although banks hate foreclosing on any property, they will do so as a last resort…
Bankruptcy Myths
I WILL LOSE MY HOME OR CAR IF I FILE FOR BANKRUPTCY
This is FALSE. If you have a mortgage or car payment in place and can afford to pay that mortgage or payment, there is no reason the bank will try to take your home or car. If you have equity in your home in excess of the mortgage, it likely is protected by State or Federal homestead exemptions.
MY CREDIT WILL BE RUINED IF I FILE FOR BANKRUPTCY AND MY CREDIT SCORE WILL PLUMMET
This is FALSE. If you are late on your bills or have your credit cards maxed out, your credit score probably has already been dragged down significantly. Reducing your debt to credit ratio may also help to improve your score.
In fact, after a bankruptcy discharge you are a much better credit risk than just about anyone else, creditors will consider the following:
- You have a clean financial slate
- You most likely have little or no remaining unsecured debt
- You have just completed two course – one on credit counseling and the second on financial management
- You have just put together a household budget and have used the process to strip the unaffordable debt from your budget
- You understand clearly the implications of poor credit management
- You can’t file another Chapter 7 for 8 years
I SHOULD DO EVERYTHING I CAN TO AVOID BANKRUPTCY; INCLUDING LIQUIDATING ASSETS AND CASHING IN 401K OR RETIREMENT FUNDS
This is FALSE. Retirement funds are protected in bankruptcy. If you decide to draw upon your retirement funds prematurely to pay creditors you may face taxes and penalties on those retirement withdrawals, by the IRS, if not repaid. You should consult with a bankruptcy attorney for a consultation to see what assets of yours will and can be protected in a bankruptcy filing…
Life After Bankruptcy
The decision to file for bankruptcy is one that can have a profound effect on your life — a financial fresh start, free from uncontrollable debt, angry creditors and stress.
Bankruptcy gives you the chance to rebuild your credit. After your debts are discharged in bankruptcy, you can begin saving money, instead of putting it toward high-interest credit cards. Here are some tips to make the most of your life after bankruptcy…
