There are different options available to you if you are in a financial crisis and are considering filing for bankruptcy. You must be very aware of your situation and its laws like bankruptcy law Hattiesburg MS to make the best decision. This article will help you with some of the critical aspects of the law and how you can get the best results for yourself.
Chapter 7 bankruptcy
Chapter 7 bankruptcy is a way to wipe out debts and start over with a fresh financial start. It can also help you stop foreclosures. However, certain activities can complicate the process.
If you are considering filing for bankruptcy, you should first consult with a lawyer. This will help you understand how the process works and what you can expect. The lawyer can also advise you on which debts are dischargeable and which are not.
You need to meet the means test to qualify for a Chapter 7 discharge. You must earn enough to pay back some or all of your debt. You may not be eligible if you have a large number of unsecured debts or if you have recently been sued.
Before you file for Chapter 7, you need to prepare your paperwork. This includes your income, assets, and proposed repayment plan. Make sure you disclose everything in your paperwork because your case could be dismissed if you don’t.
When you file for bankruptcy, your creditors will be given notice. The trustee will review your petition. They will ask you questions about your financial situation, including recent activities. Generally, a meeting will be held 4-6 weeks after you file your petition.
Chapter 11 Subchapter V
Subchapter V of bankruptcy law offers an easier path to Chapter 11 restructuring for small businesses. It was introduced to make filing for Chapter 11 easier for smaller companies and to lessen administrative costs associated with the reorganization.
To qualify for subchapter V, the debtor must prove that the business is small and in operation. Additionally, the debtor must meet the requirements for expedited plan processing. The debtor will also be expected to devote all disposable income to debt and must complete planned payments.
Unlike Chapter 11, a Subchapter V plan does not require the debtor to confirm the plan within a fixed period. If the debtor does not verify the procedure, the creditor can “cram down” the program on all creditors.
Debtors who choose subchapter V must participate in the bankruptcy process through an authorized representative. In an emergency, the bankruptcy court may ensure that the debtor follows the plan.
Smaller businesses and Main Street firms can benefit from Subchapter V. Because of the reduced oversight, and it can help them avoid default and protect their going concern value. Similarly, spreading administrative expenses over three to five years is another benefit.
Alternatives to bankruptcy
In finance, the best way to regain financial footing is to do it correctly. One of the easiest ways to do this is to hire a credit counselor. Alternatively, you can take out a debt consolidation loan. A consolidated loan is an excellent way to save yourself a bundle of interest payments. Your creditors will also be pleased with an affordable rate and fixed terms. This is the best route to take if you need to get out of debt fast.
While at it, you may seek a local bankruptcy lawyer. They are a wealth of knowledge and can help you steer clear of the pitfalls of bankruptcy and regain financial sanity. For instance, you might be surprised to find out that many reputable debt consolidation companies exist. You can also check out the United States Trustee Program. The same goes for credit card issuers. Be careful because the last thing you need is a creditor trying to run you out of town! Having a credit counselor on your side will make the difference between a happy debtor and a chagrined creditor. Luckily, there are many options out there for your credit counseling needs.