Filing for bankruptcy often brings with it mixed emotions

The main goal when filing bankruptcy is to allow honest individuals who have had unfortunate events occur which have lead to severe debt, to have these debts discharged, thus relieving the debtor from their previous debts. This allows the debtor to pursue a fresh financial start. This was the decision of the Supreme Court in 1934. If you are a resident of Delaware who is facing severe debt and you are considering filing bankruptcy, you can find the debt relief that you so desperately need. In order to do so there are two main requirements, which are necessary to complete when, filing bankruptcy in the state of Delaware.

Credit Counseling

The Bankruptcy Act of 2005 requires that all persons filing bankruptcy after the date of October 17, 2005, must receive credit counseling 6 months prior to filing bankruptcy. They must also complete a financial management course after the file of bankruptcy.

Means Test

This same act of 2005 requires an individual’s average income and expenses from the previous six months to be compared to the median income of the state. If your income level falls below the median you are able to choose to file Chapter 7. If your income level exceeds the median, your income will be further reviewed for a decision between Chapter 7 and Chapter 13.

Once these areas are completed the bankruptcy judge will make the decision on any of the matters connected to your bankruptcy. They have the final word on which chapter you are eligible to file and which debts will be discharged. The process is mainly administrative and processed outside of the court. Contact your local courthouse for details on who to contact as well as any other bankruptcy details you may need.

There are four typical reasons that you may need to speak with an attorney who specializes in bankruptcy. These four reasons include wage garnishment, foreclosure, repossession and debt collection harassment. These four reasons can lead anyone to consider bankruptcy.

Garnishment

When wages are garnished for child support or alimony, a person can easily become further into debt. If a jobs wages care for that person and their personal lifestyle and garnishment affects the persons ability to make utility payments versus buying food then a bankruptcy attorney is needed.

Foreclosure

If mortgage payments are behind and your home is in danger of foreclosure you should speak to a bankruptcy attorney. There is a bankruptcy chapter that will allow you to retain your home and regain control over your payments.

Repossession

If you have not been able to make payments for your vehicle and it is being threatened by repossession, contact a bankruptcy attorney to help you keep your vehicle and regain financial control and to make payments properly again.

Debt Collection Harassment

Though bill collectors do not legally have the right to call and hassle you over payments, too often you will receive several threatening calls over the period of a single day concerning past due billing. Bankruptcy can quiet these harassing calls quickly and peacefully.

Each of these areas adds unneeded stress into your life. Making payments can be complicated due to various reasons. Speaking with a bankruptcy attorney can be a way to get you back on financial track and to resolve all of the above issues

JC Law Group specializes in helping individuals and families in the Bay Area with filing for Bankruptcy and debt relief. Their areas of practice focus on Chapter 7 and Chapter 13 bankruptcy. If you are burdened by debt and want to explore filing bankruptcy as an option for relief, they can help you very well.

Filing for bankruptcy is not a reflection on you as a person. Perhaps you owe more on your home than what it is worth and you are struggling to make the payments, you are going through a life changing experience such as a serious illness, loss of employment, divorce or death in the family. You do not have to go on living with the constant calls from the creditors or mounting debts. Bankruptcy laws allow people who are overwhelmed by debt to get a fresh start easily.

According to the American Bankruptcy Institute “household debt is at a record high relative to disposable income.” The Administrative Office of the U.S. Courts reported that the number of filings for the year ended March 31, 2003 “exceeded 1.6 million for the first time in any 12 month period,” a 15.1 percent increase from the previous year.

There are two types of personal bankruptcy: Chapter 7 and Chapter 13. Chapter 7 Bankruptcy and Chapter 13 are legal proceedings that are available to a person to cope with the financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay about $160.00 in court fees. Attorney fees will be additional.

Chapter 7 of bankruptcy involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. Exempt property can include automobiles, some household furnishings, and property needed for work-related use; for example if you were a mechanic the tools you use to perform your work would be exempt from the bankruptcy settlement. Exemption amounts vary from state to state.

A Chapter 13 bankruptcy allows you to keep property, like a mortgaged house or car, as long as you have a steady income. Chapter 13 bankruptcy is a court-ordered and approved repayment plan to your creditors. This allows you to use your future income to pay back your debts over a 3-to-5 year period without surrendering any property. Once you complete the payments under the plan, your debts are discharged by the court.

Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, utility shut-offs, and debt collection activities. Both provide exemptions that allow people to keep certain assets, although exemption amounts vary.

The sweeping changes to the laws in 2005 made filing bankruptcy more complex, and often inaccessible to most people, particularly those with low incomes. Attorney

When you decide to file a Chapter 13 bankruptcy, the legal process grinds into gear. The petition, the document asking the court to bring you relief under chapter 13 of the United States Bankruptcy Code, is a simple two page form, signed by all debtors and the attorney. Once this form has been filed and the filing fee paid, you are given a docket number. From then on, all actions by creditors are under stay, except for those that are allowed by motion, in the bankruptcy court. Creditors can not demand money, take you to court over debt or foreclose or repossess your property.

A few days after this filing, you are required to submit a list of all your creditors and their addresses to the court. This document, the Matrix, must be followed within a week by the rest of the required paperwork, including schedules of assets and liabilities, income and expenses, your financial history and your plan for how you wish to reorganize all that under chapter 13, as well as the evidence that you will be able to complete the plan. After this process of initial submission of the Chapter 13 reorganization plan, you have the option of filing amendments to add creditors or modify the schedules or plans. Amendments may, however, involve the payment of additional fees to your lawyer, as well as extra fees to the bankruptcy court.

Unless your case has some contested issues which need to be heard before a judge, you will probably never have to appear in person. Instead, you will meet with a Chapter 13 Trustee, only one to three months after the initial filing of the petition. This is known as a 341 creditors meeting and everyone who is owed money will be invited to attend. At the meeting, the creditors will ask you questions about your financial situation. However, in most cases, few creditors ever attend and the guests are more likely to include only the big creditors and mortgage holders.

Your attorney will have to be at this meeting, to represent you and the person actually asking all the questions and coordinating the meeting will be the Chapter 13 Trustee. After this meeting, if there are no objections against it, all you have to do is to make sure you remit all the payments according to your plan and in a timely manner. Duration of time for making payments will depend upon your income and the size of your debt. By statute, all the reorganization plans must be between 36 and 60 months long. If you have enough income, the Trustee might demand that the plan be 36 months long and a larger portion of the available funds paid to unsecured creditors.

In general, if you have a little extra money one month, save it, rather than trying to pay a larger amount. If you miss a payment at a later date, you will not be given credit for any early payments made previously. However, if your income changes substantially, for a longer time, you need to inform the court and adjust your payments. Always make sure to pay on time. If you do not, one or more creditors or the Trustee will object and your case can be dismissed or converted to Chapter 7 and they may still foreclose with the permission of the court. Since you are already in a bankruptcy, one failed or late payment will leave you no recourse against losing your home. You will lose the protection of the court.