Bankruptcy
Chapter 7 Bankruptcy
(Personal and Business)
Chapter 7
Bankruptcy is known as the FRESH START or liquidation bankruptcy. If you are being sued by any of your creditors, have credit card debt, medical bills, personal loans, a personal deficiency judgment from a prior foreclosure, a court judgment, and/or are facing a wage garnishment, then Chapter 7 may be something to consider. Consultations are completely free. The only thing you have to lose is your time.
Please take advantage of a free consultation where you will meet in person or via Zoom with Attorney Christina Banyon. She will do a thorough intake and financial analysis with you, where she will go over your income, expenses, assets, and debts and give you the best solution based on your unique situation and your goals. She will ensure that you qualify for Chapter 7 and that your assets will be protected. She will discuss all of the ramifications of filing and answer all of your questions. Christina is a good listener and will listen to all of your concerns and make sure you feel comfortable with any decision that you make.
A Chapter 7 can eliminate most unsecured debts. Generally, a Chapter 7 Bankruptcy can take anywhere from 4 to 6 months to complete from filing to discharge. It’s a very quick and painless process.
Benefits of a Chapter 7
- Upon filing you are immediately protected from your creditors by what is called the “automatic stay”. This ceases any and all collection activities by most creditors.
- Gives you a fresh start and financial freedom
- Stops Wage Garnishment
- Unfreezes bank accounts
- Eliminate most unsecured debt, such as credit card debt, medical bills, personal loans, personal deficiencies, repossessions, etc.
- Temporarily stops a foreclosure law suit
- Stops a small claims law suit
- Stops the harassing collection phone calls
- Stops with the collection mailings and all contact from your creditors
Commonly Asked
Questions
Can I keep my car loan when I file Chapter 7?
Yes, you can. As long as you do not have equity (or value) in your car after the loan is paid and your exemptions are paid, you can reaffirm your car loan and keep your vehicles. A reaffirmation agreement tells the lender that you do not want to discharge the loan in your bankruptcy. You can then reaffirm or keep the car loan at the same interest rate, same monthly payment amount, and the same terms of your original loan agreement. It’s also a great way to build your credit.
Can I keep my home when I file Chapter 7?
If you do not have equity in your home above your exemptions, mortgage balance(s), and closing costs you may keep your home and discharge your debt in Chapter 7.
Protecting your home and your family is of the utmost importance to Attorney Christina Banyon. She will run valuations on your home to ensure your house will be protected if you file for Chapter 7 bankruptcy. She is the type of attorney who leaves no stone unturned. She will dot every I and cross every T to ensure you, your family, and your assets will be protected.
Is your house titled in tenancy by entirety with your spouse? If so, as long as you do not have joint debts with your spouse (aside from the mortgage), or any medical debts, you can file for Chapter 7 AND keep any amount of equity in your home. This creates a huge financial windfall for clients whose houses are titled this way.
By way of example, suppose Spouse A and Spouse B jointly own a home titled as “Tenancy by Entirety”, which has $250,000.00 in net equity. Spouse A has $75,000 in credit card debt, a $12,000 deficiency balance on a vehicle, and $5,000 in personal loans. Spouse A has no medical debt and no joint debts with Spouse B, aside from the mortgage. Spouse A can file for Chapter 7 bankruptcy, discharge or eliminate the $92,000 in unsecured debt and keep the $250,000 of equity in the home.
Attorney Christina Banyon specializes in “tenancy by entirety” chapter 7 cases and can assist you in keeping all of the equity in your home while eliminating your debt, if the legal criteria are met. She will run a free title search to see if your house is deeded tenancy by entirety to see if you qualify for this exemption in your Chapter 7 bankruptcy.
Can I protect my assets in bankruptcy?
The answer is yes; there are certain exemptions that you can use to protect your assets. The following are some of the common exemptions used in a Bankruptcy:
- Retirement Plans - such as a 401 (k), 403 (b), IRA, profit sharing, and annuities. Retirement Plans are fully exempt if they are considered a qualified retirement plan.
- Your Worker’s Compensation Award.
- Up to $30,000.00 in equity in your home / condo.
- Tools of the Trade – up to $1,500.00.
- Vehicles – up to $4,800.00 per couple of $2,400 per person.
- Wild Card Exemption – up to $4,000.00
Chapter 13 Bankruptcy
(A Structured Payment Plan)
Chapter 13
Chapter 13 is known as the reorganization or payment plan bankruptcy. If you do not qualify for a Chapter 7 or have assets that cannot be fully protected in a Chapter 7, then a Chapter 13 may be the best option for you. Chapter 13 bankruptcy pays your creditors a percentage of your debt back through a court ordered payment plan.
In a Chapter 13, contractual interest stops when you file and you pay your creditors back in 1 monthly payment. The typical term plan lasts anywhere from 36 to 60 months and the percentage you must pay depends on your assets and income level. Some clients can discharge up to 90% of their debt in a Chapter 13 payment plan.
Benefits of a Chapter 13
- Contractual interest stops from accruing as of the date you file. This means the monthly payments you make are paying down the principal allowing you to finally get a handle on your debt.
- It’s a debt consolidation. You make 1 payment to a court appointed Trustee who then pays your creditors.
- You are protected by the automatic stay. Any and all collection efforts, lawsuits, garnishments, etc. will stop as of the date you file and for the full length of your bankruptcy. This means Attorney Christina Banyon will be the point of contact for all of your creditors and you do not have to deal with them anymore.
Commonly Asked
Questions
Should I Do Chapter 13 or Debt Consolidation? What is the difference?
- Attorney Christina Banyon does not recommend a debt consolidation company. In fact, many of her clients see her after spending thousands of dollars on a debt consolidation company, only for the program to fail. Please do not make this mistake. Know all of your options before making a decision. If you are unsure what to do, call for a free consultation. Attorney Christina Banyon will give you the best advice for you, risk free.
- Unlike Chapter 13 bankruptcy, debt consolidation does not protect you from your creditors. In most debt consolidations, the company will pay one creditor at a time until that debt is settled or “charged off”. What that means is none of your other creditors are being paid. Because your creditors are not being paid, this often results in the person being served with a lawsuit when they think they are being helped by an attorney. This causes a lot of stress for people who are really just trying to pay their debt. Conversely, in a Chapter 13 bankruptcy, all of your creditors are barred from contacting or suing you by what is called the automatic stay. You will finally have peace of mind.
- Unlike a Chapter 13 bankruptcy, a debt consolidation does not stop the interest from accruing. Stopping the contractual interest by filing Chapter 13 is a huge financial benefit and may result in savings in thousands of dollars of interest.
