Bankruptcy Protection Is Possible With Coons & Crump Law Firm
Bankruptcy protection offers debt relief for residents of Kansas who are experiencing financial difficulties. It is a way to take control and reduce or possibly eliminate a heavy debt load.
The bankruptcy system is designed to help honest people who have fallen on hard times get a fresh start. In most cases, once a debtor has filed for bankruptcy protection they receive a discharge of some or all of their remaining debt. However, there are trade-offs – filing for bankruptcy protection negatively impacts their creditworthiness for a period of several years.
There are many reasons why a person might choose bankruptcy protection. The most obvious is that of protection from creditors. Creditors generally cannot contact debtors while a bankruptcy case is open. The inability to pay the bills due to job loss, the potential loss of one’s home or car due to missed payments, getting out from under credit card balances and large medical debts are all valid reasons to file for bankruptcy protection.
There are six types of bankruptcy protection: Chapter 7, Chapter 9, Chapter 11, Chapter 12, Chapter 13 and Chapter 15. The names come from the chapters in a book on the laws of bankruptcy published by Congress entitled Title 11 which contains and describes liquidation cases and wage earner cases.
Getting a Second Chance
The most common bankruptcy protection for consumers is with Chapter 7 or Chapter 13.
The Fresh Start Plan
Chapter 7 is often referred to as a “fresh start” or “liquidation bankruptcy’’ because it discharges most unsecured debts, including credit card debt, medical bills, and personal loans.
In order to qualify for Chapter 7 bankruptcy protection, debtors must pass a “means test’’ and qualify under income guidelines for the state of Kansas before filing. If the monthly household income is less than the Kansas median income there is a presumption that you are eligible to file a Chapter 7 bankruptcy.
The Wage Earner Plan
This plan is only available to debtors who petition for Chapter 13 bankruptcy protection. A Chapter 13 can be used by anyone who has a regular source of income, whether this is from a job, a pension, social security, or some combination of sources. Chapter 13 Bankruptcy basically allows those who file to develop a plan to make payments to a bankruptcy trustee.
Payment Under Bankruptcy Protection
In a Chapter 7 bankruptcy, fees are due to the attorney prior to filing the action. Debtors will continue to pay their secured debts if they want to keep the property that was used to secure the loan. A Chapter 7 bankruptcy will not correct or fix defaulted loans or home loans, however, it can be a very effective solution when planned out correctly.
A Chapter 13 bankruptcy is more complex than a Chapter 7. The attorney’s fees are paid through the case (not upfront) and payments are made to a Bankruptcy Trustee. Debtors who file this kind of bankruptcy are usually trying to keep a car or a house, pay tax debt, stop a student loan garnishment, or simply don’t have the upfront money to file a Chapter 7. It is generally more effective than a Chapter 7 bankruptcy protection case.
In both a Chapter 7 and a Chapter 13 bankruptcy, a credit counseling course is required by the courts. These courses are usually taken online; the bankruptcy attorney will provide instructions to accomplish this.
An attorney specializing in bankruptcy protection can advise you of the advantages and disadvantages of a bankruptcy action and guide you through the entire process. If you are considering filing for bankruptcy as a solution to your debt problems, the attorney’s at Coons & Crump are standing by to help you. Visit us ONLINE or give us a call and arrange a consultation. We have offices conveniently located in Lawrence (785-856-8720); Overland Park (913-353-4044) and Topeka (785-783-2360).