What to Expect When You File for Bankruptcy
Sept. 7, 2022
Are you in over your head with debt? Debt collectors calling you constantly? It may be time to consider filing for bankruptcy. While many of us shudder at the thought, filing for bankruptcy gives you a clean slate. It also helps to reorganize your finances and put debt behind you.
If you’re considering declaring Chapter 7 or Chapter 13 bankruptcy, let’s review the process and other important information.
Filing for Bankruptcy
Most people should retain a St. Louis bankruptcy lawyer to file their bankruptcy petition. Failure to file the bankruptcy correctly could result in losing assets like your home or car. It is important to speak with a lawyer to confirm that these assets would be protected in a bankruptcy.
These are the basic steps for filing most bankruptcy cases:
You collect documentation about your finances, debts, and income
You fill out the bankruptcy petition (your attorney will do this for you)
Once the case is filed, there will be an automatic stay in place, meaning debt collectors and creditors cannot contact you as the case is processed.
A court date will be set with your bankruptcy trustee. The trustee will review your case at the meeting whether there are any unprotected assets that can be liquidated
If the bankruptcy is approved, your debts will be discharged.
The process from the filing of a Chapter 7 to the discharge of the Chapter 7 is approximately 3 months
Types of Bankruptcy
Most filers choose Chapter 7 bankruptcy, which cancels all qualifying debt. You don’t need to repay your creditors at all. Chapter 7 is a good choice for most debtors because it’s fast. Also, most filers don’t lose everything they own.
For example, you can usually keep your retirement accounts, car, and even your home. You also can keep a certain amount of liquid cash and other assets, depending on the state.
In Missouri, you can usually keep the following:
$3,000 in equity in a vehicle (or $6,000 with a married couple)
$15,000 in equity in your real estate
$1,500 for engagement and wedding rings
$500 for other kinds of jewelry
Additionally, there are other exemptions which can protect assets that exceed the values listed above. Knowing whether your assets are protected is the job of your bankruptcy attorney. That is why you can call AKS Law and get the answers to your questions.
If you don’t qualify for Chapter 7, the other option for most of us is Chapter 13 bankruptcy. This kind of bankruptcy requires you to pay back your creditors over three to five years. The repayment could range for 0% to unsecured creditors to 100% for unsecured creditors. While repaying creditors isn’t what most people have in mind, there are advantages.
Let’s say you’re behind on payments on your home and you are in foreclosure. If you choose Chapter 13, you can work out a payment plan with the bank and keep the house. You also can reduce what you owe on unsecured debt.
Chapter 13 is more complex than Chapter 7. However, a skilled St. Louis bankruptcy attorney can easily handle either for you.
Contact a St. Louis Bankruptcy Attorney Today
If you are thinking about filing for bankruptcy, we understand it can be intimidating. But filing for bankruptcy can be a wise move for many people.
A St. Louis bankruptcy attorney can review your bankruptcy options and help chart a path forward. AKS Law has more than 10 years of assisting people with bankruptcy cases. Call (314) 866-3955 for a complimentary consultation.