Bankruptcy Attorney Collierville, TN
You don’t have to know which kind of bankruptcy you want to file in order to begin working with a bankruptcy attorney in Collierville, TN from Darrell Castle & Associates, PLLC. In fact, most of the time, individuals struggling to pay their debts on time aren’t sure of what their options are or what the bankruptcy process entails when they approach our experienced Tennessee legal team.
That’s more than okay. It’s our job to understand bankruptcy law inside and out so that you don’t have to. Once you schedule a free case evaluation with our firm, we’ll take time to learn enough about your financial situation that we’ll be able to give you knowledgeable advice about your options. At that point, you’ll be empowered to make an informed decision about your financial situation moving forward.
When Is Filing for Bankruptcy a Good Idea?
Depending on the kinds of debt you’re juggling and your financial goals (both long-term and short-term), filing for bankruptcy may be an excellent way for you to benefit from some debt relief. Bankruptcy can be a particularly powerful financial tool in the following two scenarios:
First, if you don’t earn much income and most of your debt is unsecured debt, filing for Chapter 7 bankruptcy could offer you the opportunity to benefit from a genuine “fresh start.” Chapter 7 bankruptcy is only made available to those individuals and couples filing jointly who don’t earn much income. There is a “Means Test” imposed on candidates for Chapter 7 bankruptcy relief to better ensure that only the lowest wage earners are able to take advantage of this form of relief. Why? In as little as 90 days, a successful Chapter 7 bankruptcy filer can have all of their eligible unsecured debts (including credit card debt and most medical bills) wiped clean. While this process does result in a temporary negative hit on one’s credit, the benefits of being unburdened by these debts can be life-changing for some families.
Second, if you earn a steady wage and your financial situation could improve dramatically if you could only reorganize your debt and “catch up” so that you weren’t consistently incurring late fees, etc., filing for Chapter 13 could be an excellent solution to the challenges you’re currently facing. Virtually anyone can file for Chapter 13 bankruptcy, which is commonly referred to as “reorganization bankruptcy.” This process will halt all collection actions, stop wage garnishments, and allow you time to put a 3 to 5 year repayment plan in place.
Moving forward, you will only make one monthly payment to your creditors instead of having to juggle multiple payments. Provided that you stick to the terms of your repayment plan, at the end of your 3 to 5 year repayment period, any remaining balances of your eligible, unsecured debts will be discharged. Filing for Chapter 13 can be a great option if you simply need the world to stop long enough for you to get reorganized and for you to move forward in a thoughtful, precise way regarding your personal debt.
Is Filing for Bankruptcy Ever a Bad Idea?
Our bankruptcy attorney team isn’t in the business of “selling” our legal services to the public. Therefore, if we believe – after assessing your financial situation and goals – that filing for bankruptcy isn’t the best option for your circumstances, we’ll tell you so. There are a few scenarios in which filing for bankruptcy is clearly not in a client’s best interests:
First, if you aren’t saddled with much debt and your situation could be easily managed via a debt management plan, a debt settlement process, or a debt consolidation effort, filing for bankruptcy would be a premature move. Bankruptcy is a great financial tool but it shouldn’t be utilized if there are alternative solutions that better suit a debtor’s needs.
Second, if you don’t earn much money and you want to file for Chapter 7 but most of your debt is secured, filing for Chapter 7 bankruptcy won’t be of much use to you. Instead, the experienced Tennessee legal team at Darrell Castle and Associates, PLLC can help you explore the possibility of filing for Chapter 13 bankruptcy or non-bankruptcy debt management alternatives.
Should I File for Chapter 7 Bankruptcy or Chapter 13 Bankruptcy?
If you don’t own a small business and you want to file for bankruptcy, you’ll likely either file for Chapter 7 or Chapter 13 bankruptcy. There are some specialty forms of bankruptcy beyond these, but these are the forms of consumer bankruptcy that are most common. Every year, hundreds of thousands of Americans file for protection and debt relief under these chapters of the Bankruptcy Code. Which option you’ll pursue will be determined by a few factors.
First, it’s important to understand that only select filers are permitted to file for Chapter 7 bankruptcy relief. There are income limits – outlined in something called the Chapter 7 Means Test – that determine whether a household of a specific size and income level is or is not permitted to file for Chapter 7 bankruptcy relief. If you are eligible for Chapter 7 bankruptcy relief, this is likely your best option, as this form of bankruptcy doesn’t require to pay your creditors back before you can benefit from a discharge order. However, there are limited circumstances under which eligible filers for Chapter 7 relief should choose Chapter 13 bankruptcy instead.
Namely, if you own a lot of expensive property other than your house, our bankruptcy attorney team will work with you to determine whether Chapter 13 bankruptcy would be preferable. Why? The trustee assigned to a Chapter 7 bankruptcy case is empowered to sell valuable property (and to pass the profits of the sale to a filer’s creditors) if that property is “non-exempt.” We can help you decide which option is best, given what you owe and what you own.
If you’re ineligible to file for Chapter 7 bankruptcy relief, filing for Chapter 13 bankruptcy relief may be a great option for you. We can help you create a 3-5 year repayment plan that is truly manageable and will set you up to achieve a financial fresh start once your bankruptcy process is complete.
Legal Assistance Is Available
If you haven’t yet scheduled a free case evaluation with our firm, please do so today. This is a no-risk, no-obligation process. It will simply allow you to ask questions of an experienced bankruptcy attorney so that you can make the best possible decision for you and your family.
What a Bankruptcy Lawyer Can Do for You
If you have made the decision to file for bankruptcy, it’s in your best interest to work with a bankruptcy lawyer in Collierville, TN. Here are a few things a lawyer can do for you:
Assist with Paperwork: When you file for bankruptcy, you have to fill out piles of paperwork. These documents will ask information about your debts, expenses, income, assets and recent transactions. They may include some legal jargon that the average person doesn’t understand. If you make an error on the paperwork, it could delay your case. That’s why it’s important to let a bankruptcy lawyer help you fill out the paperwork.
Help You Understand the Timeline: Going through bankruptcy is stressful to say the least. There’s a lot that goes into the process, and it can be very overwhelming. A bankruptcy lawyer can draw out the timeline for you and tell you what to expect along the way, such as which debts you can discharge and when you can expect the process to be complete.
Negotiate with Creditors: Whether you decide to file for Chapter 7 or Chapter 13 bankruptcy, your lawyer will spend ample time negotiating with your creditors. If you decide to file Chapter 7, for example, he or she will work hard to help you keep your property. If you file for Chapter 13, your lawyer will try to negotiate a repayment plan that’s affordable.
Stop Creditors from Contacting You: When you’re behind on your bills, your creditors likely call you on a daily basis demanding their money. If you file for bankruptcy, an automatic stay will be issued, preventing your creditors from contacting you. However, not all creditors follow this rule. If creditors are still calling you after you declare bankruptcy, a lawyer can put a stop to it.
Provide Guidance Post Bankruptcy: After your bankruptcy is complete, your life may be different. For example, bankruptcy can cause your credit rating to take a hit. A bankruptcy lawyer in Collierville, TN can provide guidance on how to get your credit back on track, such as getting a secured credit card or avoiding racking up new debt. Additionally, if you filed for Chapter 13 and need to make modifications to your repayment plan, your lawyer can help you do that. For example, you may have lost your job and need your payments lowered.
Can I Keep Any of My Current and Old Credit Cards When I File Bankruptcy?
The short answer to the title question is no. You cannot keep or use your credit cards once you file bankruptcy. This prohibition applies to old credit cards on which you owe no balance and current credit cards on which you do.
You must list all your creditors when you file bankruptcy, whether or not you owe them a current balance. The Bankruptcy Court then notifies them of your filing. Once the banks and companies that issue your credit cards find out you’ve filed bankruptcy, they likely will immediately cancel your cards for their own protection.
Chapter 7 Considerations
Chapter 7 is a discharge proceeding wherein the Bankruptcy Court discharges virtually all of your consumer debts, including your credit card debts, meaning that you no longer have any obligation to pay them. This is why the banks and companies that issue your credit cards cancel them.
You should also be aware that Section 523(a)(2)(C)(I) of the Bankruptcy Code sets forth a presumption against discharging any credit card debts you incur within 90 days of filing bankruptcy if those debts represent the purchase of $675 or more of consumer goods or $725 or more of luxury goods. The presumption also applies to cash advances of $1,000 or more that you incur within 70 days of filing bankruptcy to pay a single creditor for any type of goods or services.
Chapter 13 Considerations
Chapter 13 is a reorganization proceeding that gives you a chance to renegotiate the terms of your various debts with your respective creditors and then develop a repayment plan to either repay these debts in full or get caught up on your payments during the 3-5 years of a typical Chapter 13 bankruptcy.
Again, you must list all your creditors, but here you categorize them into priority, secured and unsecured creditors. The banks and other entities that issue your credit cards fall into the unsecured category. They therefore likely will cancel your cards for the same reason that they would in a Chapter 7 bankruptcy. Another reason for cancellation is that Chapter 13 does not allow you to give preferential treatment to a specific unsecured creditor.
As for obtaining new credit cards while in Chapter 13 bankruptcy, it’s possible, but highly unlikely. Why? Because the bankruptcy trustee or the court itself must pre-approve all new credit you apply for.
Common Mistakes to Avoid Before Filing for Bankruptcy
If you want to file for bankruptcy, it’s important to be extra cautious about your actions. Making seemingly small errors could jeopardize your case. Here are some common mistakes a bankruptcy attorney in Collierville, Tennessee wants you to avoid:
- Acquiring More Debt: A big mistake some people make before filing for bankruptcy is getting into even more debt. They might think that acquiring more debt doesn’t matter because they’re going to file for bankruptcy anyway. However, the court pays attention to these behaviors. If you acquire more debt just before filing for bankruptcy, that debt won’t get discharged.
- Transferring Property: Before declaring bankruptcy, some people try to transfer their home or other property in a family member’s name. They assume that since the property is under someone else’s name, it can’t be taken away. However, this is considered bankruptcy fraud. If the court system finds out you did this, you could get your case rejected.
- Repaying Family Members: If you borrowed money from family members when you were struggling financially, you may be anxious to pay them back as soon as possible. However, you’re not allowed to give preferential payments when filing for bankruptcy. As such, the bankruptcy trustee may require your relative to pay back the money.
- Failing to Disclose Your Assets and Debts: When you fill out bankruptcy paperwork, you must provide accurate information about all of your assets and debts. If you don’t disclose certain assets or debts, you could face criminal penalties. If you need assistance filling out the paperwork, consult a bankruptcy attorney.
- Waiting Too Long to File: Although filing for bankruptcy shouldn’t be a quick decision, you also shouldn’t wait too long to file. If your creditors are filing lawsuits against you or there’s a wage garnishment in place, it’s best to file for bankruptcy as quickly as possible.
- Filing When You’re About to Receive Substantial Assets: If you’re going to receive a significant inheritance or settlement from a lawsuit, it may be best to avoid filing bankruptcy for now. When you receive the money, you may be able to get out of debt on your own.
- Not Hiring a Lawyer: When you’re dealing with a lot of debt, the idea of paying for a lawyer may seem daunting. However, filing for bankruptcy involves many complexities and you want someone experienced on your side. A bankruptcy attorney will help you fill out the paperwork accurately and improve your chances of getting your bankruptcy approved.
Please contact a TN bankruptcy attorney in Collierville at Darrell Castle & Associates, PLLC to learn more about how we can help you.