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Debt affects millions of people across the Country. Unemployment is high, the cost of living has risen, home prices have crumbled and the cost of a college education continues to soar. If you are struggling with credit card debt, medical bills, mortgage payments, foreclosure, collection calls, wage garnishments or lawsuits you should consult with an attorney to determine if Bankruptcy is right for you. Bankruptcy is a legal, strategic and responsible way out of insurmountable debt.
With offices in Providence and Middletown, The lawers at Karns Law Group helps individuals throughout Rhode Island and Massachusetts who are struggling with debt through Chapter 7 and Chapter 13 Bankruptcy protection. We can navigate you through the complicated and often treacherous Bankruptcy process. In every case, we work dilligently to obtain maximum debt relief for our clients while enabling them to keep as many of their assets as permitted under the law. We provide highly professional representation to people in need and offer a level of personal attention not found at larger law firms.
Schedule your FREE CONSULTATION with the Massachusetts and Rhode Island Bankruptcy Attorneys at Karns Law Group today. Call 401.841.5300 or Email us here.
Bankruptcy offers legal solutions for individuals facing insurmountable debt. The Bankruptcy Code may allow you to:
- Discharge debts including credit cards, medical bills, judgments and some taxes.
- Stop the foreclosure of your home and give you an opportunity to make up missed payments over time.
- Surrender your home and erase any mortgage liability (first mortgage, second mortgage, home equity loan, etc.)
- Dismiss lawsuits, stop wage garnishment and debt collection harassment.
- Remove liens on your home.
- Allow you to pay only a fraction of your debt back over 3 to 5 years and discharge the remainder.
Individuals seeking protection under the Bankruptcy Code must chose between a Chapter 7 or Chapter 13. There are many differences between the two Chapters and most people will not have a choice in which Chapter they can file.
Chapter 7 Bankruptcy
A Chapter 7 is the type of Bankruptcy familiar to most people. In a Chapter 7 you will receive a discharge of unsecured debts like credit cards, judgments, medical bills and some taxes. Some debts cannot be discharged like child support, student loans and most taxes. There are also several other exceptions to receiving a discharge. In addition, the discharge does not eliminate a lien on your property. In other words, you need to continue paying your mortgage if you want to keep your home.
The benefit of the discharge in Chapter 7 does come with a price however as you will lose any non-exempt property that you own at the time of filing. The Trustee overseeing your case will sell your non-exempt assets to pay off your creditors. If you are going to lose valuable assets like your home or a pension than you may not want to file a Chapter 7.
You are entitled to keep certain property and in most Chapter 7 cases debtors keep everything that they own. Exemption laws protect your basic assets such as your house, furniture, car, clothing, household items, retirement accounts and several other assets.
Every State has its own set of exemptions and there is also a Federal set of exemptions. Determining what set of exemptions you will use in your Bankruptcy is very complicated and should be discussed with a lawyer.
Chapter 13 Bankruptcy
A Chapter differs from a 7 in that a Chapter 13 requires you to pay back all or just a portion of your debts. In a Chapter 13 mortgage arrearages, credit card debts, medical bills and other unpaid debts are consolidated and a debtor repays a portion or all of the debt in affordable monthly payments over a 3 to 5 year period.
Depending on your income, expenses, family size and assets, you may only be required to pay back a small portion of the debts you owe to unsecured creditors. Determining what amount you will have to pay creditors through your plan is very complicated and should be discussed with a lawyer.
Generally, in Chapter 13 bankruptcy, individuals keep all of their assets even if they are non-exempt. None of your property will be sold as long as you complete all of the payments of a properly constructed plan.
At the end of the repayment period, any debt that still remains is discharged. Creditors will then be barred from attempting to collect the remainder of the debt from you. There are of course certain debts that are not dischargeable however just like in a Chapter 7. Further, if you want to keep your home you will have to continue making mortgage payments.
Not everyone is permitted to file a Chapter 7 and determining whether or not you eligible is usually quite complicated. Further, it simply might not be in your best interest to file a Chapter 13 even if you are eligible.
If your income is over a certain amount or you have disposable income you will not be permitted to file a Chapter 7 and would be required to file a Chapter 13. Your eligibility to file a Chapter 7 or 13 is determined by several factors including but not limited to:
- How much debt you have.
- The type of debt you have.
- Your income and your expenses.
- Household size.
- Where you live and for how long.
- Your assets.
Even if you have the option of filing a Chapter 7 it may be in your best interest to file a Chapter 13. The reasons include:
- You have substantial non-dischargeable debt, like taxes or student loans, and need time to pay it off.
- You need time to pay off mortgage arrearages so that you don’t lose your home to foreclosure.
- You have assets that you would lose in a Chapter 7 like a second home or car.
Call now to schedule your FREE CONSULTATION with the Bankruptcy Lawyers at Karns Law Group. Call 401.841.5300 or Email us here.