What are the different types of bankruptcy?
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Helping clients file for Bankruptcy protection
In 2016, nearly 1 million families filed for Bankruptcy protection. That is nearly 80 times greater than the number of individuals who filed for Bankruptcy during the Great Depression. In the past 25 years, personal Bankruptcy filings have climbed nearly 350%.
The American middle class is waking up to the fact that they, too, are entitled to Bankruptcy Protection, just as General Motors, Ford and Chrysler. The greatest entrepreneurs in history have used Bankruptcy to restructure debt, free up capital, and improve their businesses. Other millionaires who have filed for Bankruptcy protection? Henry Heinz (ketchup magnate), Milton Hershey (chocolate magnate), Henry Ford, Charles Goodyear (rubber magnate), PT Barnum, Michael Jackson, Mike Tyson, Walt Disney…….and corporations owned by the 45th President of the United States.
Most of my Bankruptcy clients are middle-class families with both spouses working, they own a home or condo, one or both spouses have a college or Master’s Degree, they have paid for their children’s college educations, or are currently paying their children’s student loans since their children cannot find jobs after graduating college.
The typical Bankruptcy filer in America is a middle-class head of household with children and a full-time job; better educated than the general population; most suffered a personal event such as loss of employment, divorce or medical issues; homeowners who were defrauded into obtaining first and second subprime mortgages, seniors on a limited income with extraordinary medical expenses or unemployed or underemployed college graduates with student debt reaching $100,000.
The American middle class was hit the hardest by the recent financial crunch. A middle-class family that is hit by a loss of a job, divorce or illness tips straight into debt.
…but isn’t it immoral to file Bankruptcy?
There are no moral or ethical issues in filing a Bankruptcy case, just as there were no moral or ethical issues contained in the contract you entered into with your credit card company or mortgage lender.
Both Federal & State laws allow credit card companies and mortgage lenders to adjust their interest rates, charge you late fees, over the limit fees and other penalties. If you are late in making a payment, US law allows your creditor to use a collection agency to collect its money, or sue you in court. If the creditor obtains a judgment against you, the law allows the creditor to freeze your bank account, garnish your wages, repossess your car or sell your home in foreclosure.
The Federal government also enacted the U.S. Bankruptcy Code, which allows all eligible debtors (GM, the President or you) to eliminate or restructure their debt, stop lawsuits, wage garnishments, bank restraints, foreclosures or repossessions. The same U.S. Bankruptcy Code will protect up to $1 million of your retirement funds, $330,000 equity in your home, two cars and $22,000 in the bank. In fact, Congress has always referred to the Bankruptcy Code as “The Fresh Start” policy.
For most of my clients, filing Bankruptcy is the most responsible step they have taken to regaining financial stability for their family.
If you believe that Bankruptcy may be in your future, you should consult with an experienced attorney. The Law Offices of Allen A. Kolber, Esq. has over 25 years of experience helping clients through tough times. Our compassionate attorneys are here to guide you through your best options on the road to financial recovery. It is important that you retain the services of an effective attorney and our firm is ready to serve. Contact our firm.
Bankruptcy Options
Generally, individuals have two options for bankruptcy; Chapter 7 and Chapter 13 bankruptcy. The Law Offices of Allen A. Kolber, Esq. can help you make informed decisions that can help you become financially stable once again.
Chapter 7 Bankruptcy
It is time that we begin to understand that filing for Bankruptcy protection is not dishonorable. Sometimes circumstances in life and business lead to serious financial situations. The Government, understanding that individuals need help to get back on the path of financial stability, has created “The Fresh Start”.
Chapter 13 Bankruptcy
A Chapter 13 Bankruptcy is for families that have assets, value to their home or earn above the average family income for the county in which they live. A Chapter 13 Bankruptcy allows you to keep all your assets while under the protection of the Bankruptcy Court. In exchange for keeping your assets, the Bankruptcy Court requires a Chapter 13 Debtor to submit to a “Plan” over the course of 3 or 5 years.
Should I File for Bankruptcy?
Unless you are facing an absolute emergency such as a Foreclosure sale, warrant of eviction, or bank restraint involving a large sum of money, every client should think long and hard before filing a Bankruptcy case and should seek advice from both an accountant and a Bankruptcy attorney.
The Automatic Stay
The Automatic Stay is a powerful aspect of the Bankruptcy process while you find debt relief. The Automatic Stay begins immediately upon filing and can help a debtor breath while considering the many options available.
