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Bankruptcy FAQ

Counsel from a Middletown, New Haven and Hartford Lawyer

Bankruptcy can be a complicated and often confusing process. In some cases, people may be afraid to take the next step because of the common myths surrounding bankruptcy. Regardless of the situation you are in, it can be helpful to learn more information about the bankruptcy process before making any financial decisions. As a Middletown bankruptcy attorney, I am here to provide the answers you need to move forward. Read through this frequently asked questions below or contact me today if you don't see the answers you are looking for.

Will bankruptcy eliminate all of my debts?
While bankruptcy can be a powerful financial tool, it cannot eliminate all debts, nor can it cure financial habits. You will need to commit to the bankruptcy process in order to eliminate as much debt as possible while still retain your property. Any unsecured debts will be eliminate when you file for bankruptcy, however, secured debts will still have to be paid off. Similarly, if you file for Chapter 13, you may have a repayment plan, rather than a discharge of all debts.

What is the difference between Chapter 7 and Chapter 13?
In order to file for Chapter 7, you will need to fall under the average income for your state or area. If you pass the means test, you can then file. Chapter 7 is often called liquidation bankruptcy, as you will liquidate your assets in order to pay off non-dischargeable debts. You will be able to use exemptions to protect certain property depending on your situation. Chapter 13 is slightly different. You do not need to fall under a certain income, though you must have a sustainable enough job to pursue this option. Why? Because Chapter 13 utilize a repayment plan method that seeks to negotiate a plan with all secured creditors in order to pay off debts over time. You may still discharge certain debts and will likely be able to keep your home.

If I file for bankruptcy, will I still lose my house?
If you want to keep your home and are facing foreclosure, filing Chapter 13 bankruptcy may be a serious option for you. When you file for bankruptcy, an automatic stop is issued, which means your creditors and lenders can no longer take any action against you. You will likely be able to keep your house, so long as you can restructure your debts and begin to make payment plans over time.

Won't bankruptcy ruin my credit?
This is a common myth that surrounds bankruptcy. While bankruptcy will make it challenging for you to obtain a credit card right away, this is often a good thing. It gives you time to rebuild financial habits and begin taking the appropriate steps towards rebuilding your credit, rather than jumping back into debt right away. There are many methods that can be used to rebuild and restore your credit over time.

Will I lose all my possessions if I file for bankruptcy?
While many people fear this outcome, it is often not the case. There are bankruptcy exemptions available that allow you to exempt certain assets and property from the liquidation or repossession process. You can utilize these exemptions to keep property like cars, homes, and land. You will need to work closely with an attorney to ensure that you get as many exemptions as you are eligible for.

What should I do if a creditor is harassing me?
If you feel like a creditor is harassing you, then you should speak with a lawyer right away. Creditors are not allowed violate The Fair Debt Collection Practices Act, which states that they cannot yell or call you names over the phone, cannot call you multiple times a day, cannot call you at unreasonable hours, such as early in the morning and late at night. It also states that creditors cannot call you at your place of work or leave threatening messages. If they violate your rights, you may be able to pursue legal action against them and end their collection practices!

I bankruptcy right for me?
This can be a tough question to answer. The bottom line is that, although bankruptcy is a great financial tool, it is not right for everyone's financial situation. For this reason, it is crucial that you discuss your case with a seasoned bankruptcy attorney who can walk you through the process and review your financial situation. If you feel overwhelmed by debt and believe bankruptcy is truly the only option you have left, make sure you reach out to my firm today.

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