As the economy shifts, as it has dramatically over the past few years, many individuals and businesses have found themselves with debt they can no longer afford to service and maintain. First and foremost, you are not alone. Studies show consumer debt has increased dramatically over the past decade. In fact, the Federal Reserve recently reported that in December 2011, total U.S. consumer debt had grown to $2.5 trillion—that’s $2,500,000,000,000.00. Businesses, small and large, have found themselves in similar situations as the economy has been unsteady and once certain sectors have fallen off and new industries blossom.

In 2005, the United States Bankruptcy laws changed dramatically with the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. As a result, it is even more important to have a qualified and learned legal team working on your behalf to ensure the best possible result for you. Let our dedicated team work with you to determine the best course of action—whether that is Bankruptcy protection or alternative measures.

Bankruptcy laws help people who can no longer pay their creditors get a fresh start – by liquidating assets to pay their debts or by creating a repayment plan. Bankruptcy laws also protect troubled businesses and provide for orderly distributions to business creditors through reorganization or liquidation. Most cases are filed under the three main chapters of the Bankruptcy Code – Chapter 7, Chapter 11, and Chapter 13. Federal courts have exclusive jurisdiction over bankruptcy cases.

The primary purposes of the law of bankruptcy are:

to give an honest debtor a "fresh start" in life by relieving the debtor of most debts, and to repay creditors in an orderly manner to the extent that the debtor has property available for payment.

Some bankruptcy cases are filed to allow a debtor to reorganize and establish a plan to repay creditors, while other cases involve liquidation of the debtor's property.

A bankruptcy case normally begins by the debtor filing a petition with the bankruptcy court. A petition may be filed by an individual, by a husband and wife together, or by a corporation or other entity. The debtor is also required to file statements listing assets, income, liabilities, and the names and addresses of all creditors and how much they are owed. The filing of the petition automatically prevents, or "stays," debt collection actions against the debtor and the debtor's property. As long as the stay remains in effect, creditors cannot bring or continue lawsuits, make wage garnishments, or even make telephone calls demanding payment. Creditors receive notice from the clerk of court that the debtor has filed a bankruptcy petition. Some bankruptcy cases are filed to allow a debtor to reorganize and establish a plan to repay creditors, while other cases involve liquidation of the debtor's property. In many bankruptcy cases involving liquidation of the property of individual consumers, there is little or no money available from the debtor's estate to pay creditors. As a result, in these cases there are few issues or disputes, and the debtor is normally granted a "discharge" of most debts without objection. This means that the debtor will no longer be personally liable for repaying the debts.

In other cases, however, disputes may give rise to litigation in a bankruptcy case over such matters as who owns certain property, how it should be used, what the property is worth, how much is owed on a debt, whether the debtor should be discharged from certain debts, or how much money should be paid to lawyers, accountants, auctioneers, or other professionals. Litigation in the bankruptcy court is conducted in much the same way that civil cases are handled in the district court. There may be discovery, pretrial proceedings, settlement efforts, and a trial.

One of the first questions we are usually asked when consulting on Bankruptcy, is “Will I be able to keep my house?!” And the answer, almost all of the time, is YES. The federal government, as well as each individual state, has legislated certain “Exemptions” for Bankruptcy. These exemptions are often complicated, but when properly applied, they allow a person who is filing for Bankruptcy protection to maintain many of their most important assets.


If Bankruptcy protection is not right for you, let us work with you and your creditors for Debt Management and Settlement. We can work with your creditors to lower interest rates, lowers principal balances, and create payment arrangements that you can afford and maintain. Many of our clients have been able to reduce their overall debt and feel financial freedom without filing for Bankruptcy protection. Our dedicated team will work with you to find the plan that best fits your individual needs.

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