Submitted by Jen Jones on Wed, 04/29/2009 - 4:55pm
If you're heavily in debt and behind on your payments, you know full well what your creditors want: they want you to pay up -“ and now. They don't care where or how you get the money; they just want you to pay. And they'll do everything they can to get it. A popular tactic is to make it sound like you have no choice but to pay up or suffer irretrievable disaster. They threaten that they'll sue you, take your property, garnish your wages, or forever destroy your credit rating. However, you have the power of federal bankruptcy law on your side. The bankruptcy laws were designed to give you a chance to start over again, by allowing you to wipe out all of your unmanageable debts and save your home and/or car.
The bankruptcy process can be intimidating. The rules and procedures are technical. You'll hear foreign words and phrases, like "the automatic stay,- the "means test,- "exempt property,- the "341 meeting,- and "reaffirmation.- You'll have to deal with a bankruptcy judge -- when you may have never been involved in the legal system before. And you'll also have to deal with someone called a "trustee.-
To set your mind more at ease, it's useful to have an understanding of the basic lingo and the role of your creditors, the trustee, and the judge in the process. The "automatic stay- kicks in the moment you file your bankruptcy petition, and it means your creditors must immediately cease all collection activity against you. The "means test- is an evaluation of your income and expenses to see if you qualify for Chapter 7 liquidation bankruptcy. An experienced bankruptcy will be able to successfully maneuver the complexities of the means test. "Exempt property- is protected property you get to keep; your creditors can't touch it. The majority of debtors are able to exempt all of their property, including their home, cars and household goods. The "341 meeting- is where you meet with the trustee and your creditors (if any show up to the meeting) to discuss your assets and liabilities. "Reaffirmation- means that you agree to repay a debt that would otherwise be wiped out in the bankruptcy -“ something you wouldn't normally do.
As for the players involved, the "trustee- is an individual appointed to oversee the administration of your case. In a Chapter 7 case, the trustee is in charge of distributing the proceeds from any non-exempt assets to your creditors. But remember, most debtors can fully exempt all of their assets. In the unlikely event that your assets are worth more than exemption limits, Chapter 13 allows you to pay out your "equity above exemption" over the course of a 3 to 5 year plan. Under a Chapter 13 repayment plan, the trustee collects your monthly payment, and divvies the payment between your creditors. Essentially, the trustee represents the interests of your creditors. The judge acts as a neutral arbiter, resolving any disputes or questions of bankruptcy law.
Your lawyer is the person on your side in this process. He or she will make sure you understand the process, get to keep as your exempt assets, and don't get swindled into reaffirming a debt that should be discharged. So, don't be intimidated by the bankruptcy process; take advantage of it. You don't have to suffer with unmanageable debts and endless creditor harassment. The very purpose of bankruptcy is to help people in your situation. With an experienced attorney by your side, you can be confident that you'll get the help bankruptcy has to offer: You will able to "talk the talk,- stand up to your creditors, and take back control over your life. Call an experienced bankruptcy attorney today, and stop the creditors in their tracks.
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