What chapter should you file for? Curious about chapter 13 or chapter 7 bankruptcy and how to navigate all of the paperwork?
Filing for bankruptcy is an enormous undertaking. It can be an incredibly time-consuming and stressful experience. Having an experienced bankruptcy attorney can make the process significantly easier. Las Vegas Attorney Corey Beck is here to assist you.
When you file for Chapter 7 bankruptcy, it will liquidate any assets of value that you have in order to pay off your debt. It then wipes out your unsecured debt — like credit card bills, medical bills, and personal loans, along with deficiency balances, like money you owe on your house or car that went back to the creditors.
Bankruptcy filing stops all collection activities, including lawsuits, garnishments, and liens. The key point is to get the case filed. When the opposing attorney receives notice of bankruptcy, the attorney must release any levy and/or cease with any action in their collection case.
Chapter 11 bankruptcy is for businesses and corporations that want to continue operating. They will be allowed to come up with a plan to reorganize their debt and find a way to pay it off over time. The court and their creditors will need to approve of it.
Success in Chapter 11 bankruptcies involves litigating issues presented. Bankruptcy litigation tends to be more narrowly focused on specific code section or application of controlling law. Similarly, effective Chapter 11 cases require negotiation. In particular, establishing "dialogue" with creditors and acting in "good faith" to effectuate agreements provides the groundwork for effective reorganization.
Chapter 13 bankruptcy also allows you to reorganize your debt. Based on your income and the amount of money that you owe, the court will put you on a payment plan so that you can pay off your debt in the next three to five years. They create a budget for you and monitor your spending.
Chapter 13 bankruptcy offers an "MMM Program" — a mortgage modification mediation program. This program is opted-in by court order. It’s a formal process to have a "program manager" oversee and help facilitate modification of the loan. Chapter 13 bankruptcy also provides forum to object to creditors' claims. In particular, if a creditor does not provide accounting and documentation with proof of claim, the claim can be objected to in bankruptcy. Reducing the "pool of creditors" will reduce payments when only debts at issue are unsecured creditors.
