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ATTORNEY JOHN P KEANE
Copyright Â© 2011 - John P. Keane & Associates - Representation in Bankruptcy & Real Estate Law - This web site is not to be construed as formal legal advice nor the formation of a lawyer/client
relationship. We are a debt relief agency.
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OVER 20 YEARS EXPERIENCE
AFFORDABLE LOW COST BANKRUPTCY
Representing clients in Lynn, Salem, Beverly, Newburyport, Boston, Braintree, Hyannis and other locations close to you.
- GET A FRESH START
- STOP HARASSING PHONE CALLS
- OBTAIN PEACE OF MIND
- WE CAN SHOW YOU HOW TO START REBUILDING CREDIT
Let an experienced Bankruptcy Attorney help you through this difficult process. Call for a FREE telephone consultation to discuss any questions you may have, and
know that we're proud to offer low fees for Bankruptcy Law work. THERE IS NO NEED TO CONSTANTLY WORRY ABOUT YOUR DEBT.
PURPOSES AND BENEFITS OF BANKRUPTCY
The United States Constitution provides a method whereby individuals, burdened by excessive debt, can obtain a fresh financial start and pursue newly productive
lives unimpaired by past financial problems. It is an important alternative for persons mired deep in financial difficulty.
The federal bankruptcy laws were enacted to provide debtors with a fresh start and to establish a ranking and equity among all the creditors who are clamoring for the
debtor's limited resources.
Bankruptcy helps people avoid the kind of permanent discouragement that can prevent them from ever reestablishing themselves as hard-working members of
society. Also, creditors are ranked so that the debtor's nonexempt property can be fairly distributed according to established rules guaranteeing identical treatment to
all creditors of the same rank.
This discussion is intended only as a brief overview of the types of bankruptcy filings and of what a bankruptcy filing can and cannot do. Anyone considering this
course of action is encouraged to seek the advice and assistance of an attorney specializing in bankruptcy law.
What are the Different Types of Bankruptcy?
The Bankruptcy Code is divided into chapters. The chapters which usually apply to consumer debtors are chapter 7, known as a Liquidation, and chapter 13, known
as an Adjustment of the Debts of an Individual with Regular Income.
An important feature applicable to all types of bankruptcy filings is the automatic stay. The automatic stay means that the mere request for bankruptcy protection
automatically "stays" or forces an abrupt halt to repossessions, foreclosures, evictions, garnishments, attachments, utility shut-offs, and debt collection harassment. It
offers debtors a breathing spell by giving the debtor and the trustee assigned to the case time to review the situation and develop an appropriate plan. Creditors
cannot take any further action against the debtor or the property without permission from the bankruptcy court.
In a chapter 7, or liquidation case, the bankruptcy court appoints a trustee to examine the debtor's assets and divide them into exempt and nonexempt property.
Exempt property is limited to a certain amount of equity in the debtor's residence, motor vehicle, household goods, life insurance, health aids, specified future
earnings such as social security benefits and alimony, and certain other personal property. The trustee may then sell the nonexempt property and distribute the
proceeds among the unsecured creditors. Although a liquidation case can rarely help with secured debt (the secured creditor still has the right to repossess the
collateral), the debtor will be discharged from the legal obligation to pay unsecured debts such as credit card debts, medical bills and utility arrearages. However,
certain types of unsecured debt are allowed special treatment and cannot be discharged. These include some student loans, alimony, child support, criminal fines,
and some taxes.
In a chapter 13 case, the debtor puts forward a plan, following the rules set forth in the bankruptcy laws, to repay all creditors over a period of time, usually from future
income. A chapter 13 case may be advantageous in that the debtor is allowed to get caught up on mortgages or car loans without the threat of foreclosure or
repossession and is allowed to keep both exempt and nonexempt property. The debtor's plan is a simple document outlining to the bankruptcy court how the debtor
proposes to pay current expenses while paying off all the old debt balances. The debtor's property is protected from seizure from creditors, including mortgage and
other lien holders, as long as the proposed payments are made. The plan generally requires monthly payments to the bankruptcy trustee over a period of three to five
years. Arrangements can be made to have these payments made automatically through payroll deductions.
WHAT BANKRUPTCY CAN AND CANNOT DO
Bankruptcy may make it possible for financially distressed individuals to:
1. Discharge liability for most or all of their debts and get a fresh start. When the debt is discharged, the debtor has no further legal obligation to pay the debt.
2. Stop foreclosure actions on their home and allow them an opportunity to catch up on missed payments.
3. Prevent repossession of a car or other property, or force the creditor to return property even after it has been repossessed.
4. Stop wage garnishment and other debt collection harassment, and give the individual some breathing room.
5. Restore or prevent termination of utility service.
6. Lower the monthly payments on debts, including secured debts such as car loans.
7. Allow debtors an opportunity to challenge the claims of certain creditors who have committed fraud or who are otherwise seeking to collect more than they are
legally entitled to.
8. Bankruptcy, however, cannot cure every financial problem. It is usually not possible to:
A. Eliminate certain rights of secured creditors. Although a debtor can force secured creditors to take payments over time in the bankruptcy process, a debtor generally
cannot keep the collateral unless the debtor continues to pay the debt.
B. Discharge types of debts singled out by the federal bankruptcy statutes for special treatment, such as child support, alimony, some student loans, certain court
ordered payments, criminal fines, and some taxes.
C. Protect all cosigners on their debts. If relative or friend co-signed a loan which the debtor discharged in bankruptcy, the cosigner may still be obligated to repay the
D. Discharge debts that are incurred after bankruptcy has been filed.
BANKRUPTCY'S EFFECT ON YOUR CREDIT
By federal law, a bankruptcy can remain part of a debtor's credit history for 10 years. Whether or not the debtor will be granted credit in the future is unpredictable. In
some cases it may actually be easier to obtain future credit, because new creditors may feel that since the old obligations have been discharged, they will be first in
line. They also recognize that the debtor cannot again file bankruptcy for at least the next eight years.
We can help show you how to reestablish you credit.
Let our experienced bankruptcy attorneys help you with all your bankruptcy needs
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