For many, the solution to overwhelming debt can be bankruptcy. At the Law Office of Eric M. Bittner we work closely with our clients to understand their financial circumstances and devise a plan that will help free them from creditor collection activity including foreclosure actions, lawsuits, harassing phone calls, letters, wage garnishments and repossessions. This means that a foreclosure in progress is stopped, a lawsuit already filed is frozen, and you will not receive further calls, letters or threats.
Chapter 7 of the bankruptcy code is known as a liquidation or as a straight bankruptcy. The purpose of chapter 7, is to give the debtor a “fresh start” by extinguishing the debtor’s personal liability on debts.
If Chapter 7 is a viable option for you, it can help you eliminate burdensome debts such as:
- Credit cards
- Medical bills
- Personal loans
- Other unsecured debt
Most individual chapter 7 cases end in about 3-5 months with a discharge of debts, but some types of debts such as domestic support obligations, taxes, debts incurred due to fraud and student loans, are not dischargeable.
The Bankruptcy Code allows an individual debtor to protect some property from the claims of creditors and from the trustee by claiming “exemptions” in the property using state of Tennessee exemptions. For example, various types of personal property are exempt from liquidation under Chapter 7 bankruptcy:
- Up to $10,000 in wrongful death compensation
- Public assistance benefits
- ERISA-qualified pensions and IRAs
- HSAs and MSAs
- Public employee and teacher pensions
- Up to $10,000 in any other property
- Bibles, schoolbooks and family pictures
- Burial plots
- Health aids
- Up to $7,500 in personal injury compensation
- Up to $1,900 in trade tools
A debtor may also opt to redeem an asset by paying the fair market value in one lump sum or reaffirm a debt and promise to pay all or a portion of the money owed. If the debtor defaults on the payments, the creditor may repossess and sell the collateral.
Chapter 13 bankruptcy can be a good solution for individuals with enough income to make monthly payments toward debts. Chapter 13 is a court-approved partial repayment of debts through a plan proposed by your lawyer. Your debts are restructured into one consolidated payment which may last for three to five years. The monthly payment set forth in your plan is made to the Chapter 13 trustee, who holds the money pending the court’s approval of your plan. Once confirmed, the trustee begins making payments to your creditors in the manner provided in your plan.
At the end of your plan payments, the remaining balances on most debts (like credit cards, medical bills, unsecured personal loans, unsecured junior mortgages, etc.) are discharged and any mortgages and taxes are paid current. Creditors provided for in full or in part under the chapter 13 plan may no longer initiate or continue any action against you, the debtor, to collect the discharged obligations.
What are the Advantages of Chapter 13 Bankruptcy?
Chapter 13 offers individuals a number of advantages over liquidation under chapter 7. You may:
- Stop foreclosure proceedings and cure delinquent mortgage payments over time.
- Modify secured debts (other than a mortgage for their primary residence,) reducing the loan balance and interest rate and extend the debt over the life of the chapter 13 plan. Doing this may lower the payments.
- Protect third party co-signers (like your spouse or a friend) who are liable with the debtor on “consumer debts.”
- Eliminate a second mortgage lien on a primary residence.
- Pay back taxes without incurring additional interest and penalties.
At the Law Office of Eric M. Bittner we have extensive experience in creditor’s rights and bankruptcy proceedings. We handle claims involving issues such as unexpired leases and executory contracts, turnover of property, priority of claims, preferences, fraudulent conveyances, and other avoidance actions. Our Office has also handled numerous matters involving relief from stay, post-petition financing, and dischargeability. We also have extensive experience in real estate and other types of workouts, pre- and post-judgment attachments and garnishments, landlord-tenant law, and representation of lenders in foreclosure proceedings.
Contact the Office of Eric M. Bittner for a free case evaluation to learn more about how we can help you.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.