If you like millions of others in this country are unable to pay your debts, speak to an experienced Spanish Fork Utah bankruptcy lawyer. There is a legal way for you to get rid of these debts. It’s called bankruptcy. Many Americans file for bankruptcy each year and in the end they walk away with their debts discharged.
Bankruptcy is a legal recognition that an individual or a business cannot pay its debts. There are many sections, or “Chapters,” of the bankruptcy code. These different Chapters try to deal with the different situations debtors find themselves in. The most commonly used Chapters of the bankruptcy code are Chapters 7 and 13. Debtors, assisted by the courts, must decide which Chapter best addresses their situation. Consumers who file bankruptcy petitions come from all sections of society. An experienced Spanish Fork Utah bankruptcy lawyer can explain the difference between Chapter 7 and Chapter 13 bankruptcy.
Retailers are going all out to attract customers. How can anyone pass up a chance to buy Limoges china or a Ralph Lauren suit at just half the retail price? The answer, of course, is anyone who doesn’t really need them. Nothing is a bargain if you can’t afford it, and, even if you can, there are other options for spending your money. You can even save it to spend later. But shop-till-you-drop has become America’s favorite pastime, with the result that we have been transformed from citizens into a nation of consumers.
The fallout from this phenomenon has been dreadful. Every year, more Americans file for bankruptcy than graduate from college. Rest assured, the bankrupt are not all poor people. Many are middle-class Americans with steady jobs who are simply spending way beyond their means. Stand in a checkout line and note how many people pay by check, using a credit card only for identification because they have maxed out their credit card. Speak to an experienced Spanish Fork Utah bankruptcy lawyer if you are considering bankruptcy to get rid of the debts that are overburdening you. You are not alone. There are many others in Spanish Fork, Utah who are facing the same problem but do not know where to seek help. An experienced Spanish Fork Utah bankruptcy lawyer is your best source of information.
When an entrepreneur has an idea for a new business, she may lack sufficient capital to fund the startup herself. That’s why we have lending institutions. Our entrepreneur borrows money from the bank to start up her company. She makes some sales, pays some of the debt back, perhaps borrows more to invest in the business, and eventually becomes successful enough to hire five, ten, three hundred employees.
With that success, she pays the bank back, including a bit more money than she borrowed to pay the bank for the use of the bank’s money and for taking the risk that she might default. The bank takes some for itself and gives the rest of the profit to the depositors who lent the bank money. Everybody does a little bit better, especially those three hundred people who might otherwise not have jobs, and all because the bank had the courage to lend a little cash. Though “debt” is a four-letter word, in this context it’s a good thing.
Our capitalist society encourages the entrepreneur to take on debt, as long she treats the privilege responsibly and honors her obligation to pay the money back. Of course, the bank shouldn’t risk its lenders’ money on a bad bet, either, so there are responsibilities to be fulfilled on all sides. When the bank goofs, we have a bank or a savings and loan crisis. When the entrepreneur goofs, we have bankruptcy.
The primary purpose of the U.S. Bankruptcy Code is to provide stability and order. When the entrepreneur makes an honest mistake and can’t repay her debt, we want an impartial third party to step in and say, “Now now, let’s all get together and figure out how to distribute her assets among her deserving creditors as fairly as possible.” And we want those creditors to know what they’re signing up for going in. The Bankruptcy Code provides that predictability.
In fact, when the bankruptcy petition is filed in federal bankruptcy court, an “automatic stay” goes immediately into effect. The court yells, “Freeze!” and everyone must stay where he stands. No repossession, no litigation, not even any scary letters. Instead of joining a mad dash to get paid, people are forced to work things out slowly and carefully.
The U.S. Bankruptcy Code is also intended to provide the honorable debtor with a fresh start. People make honest mistakes and sometimes have plain bad luck. Someone who opens a restaurant outside a large factory may not know that the owners are preparing to shut it down. That poor misfortunate should be granted relief from crushing debt and allowed to start anew.
One section of the Bankruptcy Code allows either the court or the trustee of the debtor’s property to dismiss from the court’s protection a debtor whose debts are primarily consumer debts if “it finds that the [discharge of the debts] would be a substantial abuse of the provisions of” Chapter 7. A consumer debt is one “incurred by an individual primarily for a personal, family, or household purpose.” However, Congress didn’t define “substantial abuse” although it did intend to deny relief to the dishonest debtor, or one who simply had enough assets to pay off the creditors. There is no Constitutional right, no entitlement, to a discharge of debts through the bankruptcy procedure.
In dire cases, bankruptcy is a sensible and welcome option. At the very least, it allows you to consolidate your debts and pay them off slowly so that you don’t starve and won’t be bothered by creditors. At best, all of your debts will be forgiven and you can start afresh. Either way, however, your credit rating suffers for a time, so it’s better to discipline your spending now rather than have the courts and credit agencies do it later.
If you are considering bankruptcy, speak to an experienced Spanish Fork Utah bankruptcy lawyer. Fling for bankruptcy isn’t as simple as it sounds. You need to first decide on the chapter of your bankruptcy filing. Individuals file for bankruptcy protection under Chapter 7 or Chapter 13. Both are different and the forms to be submitted are different.
Chapter 7 bankruptcies apply to individuals. Under Chapter 7, all of the individual’s assets are “liquidated”–sold off–by the courts to pay creditors. To determine what assets the debtor owns, a complete list must be supplied to the federal bankruptcy court. In addition, a full accounting of all liabilities must be presented to the court. Once the assets have been liquidated, creditors start getting paid. First in line is the government. Payment of taxes gets the highest priority.
Some financial obligations must be paid even after a Chapter 7 bankruptcy is finalized, including alimony and student loans. Naturally, few creditors will ever see their money because of the sad condition of the debtor’s finances. And the debtor now has the bankruptcy recorded in his credit file, which means that the likelihood of receiving additional credit is slight–at least for the next ten years.
Chapter 13 bankruptcies apply to individuals who are not in the hopeless financial situation that individuals filing under Chapter 7 find themselves in. Under Chapter 13, the debtor’s debts are rescheduled so that a portion of the debt can be repaid over time. In addition, a bankruptcy trustee may be appointed to oversee the case for the next few years. It is also common for the debtor’s wages to be tapped by the court to help repay creditors. The benefit to the debtor is that most of his assets are protected under Chapter 13. But the bankruptcy is recorded, and the prospect of receiving future credit is slim for a decade or so.
Individuals who have a regular source of income should consider Chapter 13 bankruptcy. The debtor in a Chapter 13 bankruptcy must submit a payment plan to the court. The creditors can object to the payment plan. After the court approves the payment plan, the debtor must start making payments according to the plan. Once all payments as per the plan are made, the debtor will receive a discharge. Not all debts will be discharged in a Chapter 13 bankruptcy. Statutory debts such as taxes and court ordered debts such as alimony and child support, fines, etc will continue to be payable.
Chapter 13 is ideal for debtors with a regular source of income. Only individuals can file for protection under Chapter 13. The individual debtor can be an employee, self employed or operating an unincorporated business. This bankruptcy chapter is also known as the wage earner’s plan. The debtor must demonstrate that he or she has sufficient income after deducting certain slowed expenses to meet the repayment obligations.
As soon as you file your Chapter 13 petition in a bankruptcy court, an automatic stay will come into operation and your creditors cannot contact you or take steps to collect the debt from you. Unlike a Chapter 7 bankruptcy where your non-exempt assets taken over by the bankruptcy trustee, you can keep your assets in a Chapter 13 bankruptcy. You must submit a payment plant to the bankruptcy court. In the payment plan, you must specify how you intend to pay off your debts. Your creditors can object to your payment plan. When your creditors object to the plan, the bankruptcy court will ask you to respond to the objections. When the bankruptcy court approves your Chapter 13 payment plan, you must start making payments to the bankruptcy trustee according to the plan. The bankruptcy trustee will then distribute the payments to your creditors. Generally, your payment plan should be of three years. In rare cases, you will be allowed to submit a plan that extends to five years. Plans above five years are not permitted.
You cannot file a Chapter 13 bankruptcy petition if you have previously filed a bankruptcy petition in the 180 days preceding your Chapter 13 filing and it was dismissed because of your willful absence or failure to comply with the court orders or your petition was voluntarily dismissed after your creditors sought relief from the bankruptcy court to recover property upon which they hold liens. If you have previously received a discharge in a Chapter 13 bankruptcy, you must wait for two years from the date of the initial filing to file a second Chapter 13 bankruptcy. If you have previously received a discharge in a Chapter 7 bankruptcy, you must wait for four years from the date of filing of the Chapter 7 proceeding to be eligible for filing under Chapter 13.
If you are overburdened with debt, seek an appointment with an experienced Spanish Fork Utah bankruptcy lawyer. Do not conceal any information from your bankruptcy lawyer. Remember he is your only chance to get rid of the debts legally and get a fresh start in life. He will not disclose what you tell him. Your communication with your Spanish Fork Utah bankruptcy attorney is protected by attorney client privilege. Tell him all the debts that you owe. He will review them and let you know which debts can be discharged in bankruptcy. Some debts like child support payments and tax debts cannot be discharged in bankruptcy and you will continue to be liable for them. Most debts especially debts that you have taken from banks and other creditors will be discharged in bankruptcy.
Filing for bankruptcy can be an emotionally stressful time. However, there is nothing to be ashamed off. Many Americans file for bankruptcy each year. Once you are out of bankruptcy you can start afresh. You will be no longer be liable for the debts that were discharged in bankruptcy. Seek the assistance of an expert. Speak to an experienced Spanish Fork Utah bankruptcy lawyer today.
Spanish Fork Bankruptcy Lawyer Free Consultation
When you need legal help with filing a bankruptcy in Spanish Fork Utah, please call Ascent Law now at (801) 676-5506 for your Free Consultation. We want to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506