Bankruptcy Decisions

An experienced Orlando bankruptcy attorney can help you navigate through many tough bankruptcy decisions that must be made before filing bankruptcy. When an individual needs a bankruptcy lawyer there are legal options to keep in mind that will help decide if this option is the right one at this time. Bankruptcy is complex and sometimes people don’t understand the ramifications of filing for bankruptcy protection and which of the laws would be most appropriate for the situation.

Both individuals and companies can file for debt protection, but laws have changed in 2005 that affect who can file, how frequently and what can prevent a person from filing bankruptcy.

Central Florida bankruptcy attorneys Roddy Lanigan and Eric Lanigan will tell you that no one’s situation is hopeless. When debt is overwhelming, there are multiple remedies. Set up a consultation in their Winter Park, Florida, office and ask the right questions.

People get into debt for various reasons, and most people do not intend to run up their bills to the point that they can’t manage them. Individuals find themselves in the position of working hard to pay off these bills, but get further and further behind. The reasons for the debts are usually due to unexpected medical expenses, the loss of a job, a divorce, or personal tragedy.

The two most common remedies for an individual bankruptcy are Chapter 7 and Chapter 13 bankruptcies. Chapter 7 requires a means test, which means that the applicant must qualify by having an income that is either lower or equal to the median income in his state.

Bankruptcy firms are specialists in looking at an individual’s or a company’s finances and guiding him through the legal challenges. The Lanigans will advise clients on which of the many options will best resolve the situation. For example, if the median income is $50,000 per year, an individual cannot make more than that amount to be able to file for this protection.

The Lanigans will have the information needed about the state and county median income. If a  filer’s income is greater than the median income, then the Lanigans will make other calculations to see if a person can still qualify in another way. If the person qualifies, then the Lanigans may devise a plan to settle the debts through a Chapter 13 bankruptcy.

One advantage is that as soon as the person begins the process, all creditors by law have to back off and become part of the process and the harassing phone calls and letters stop.

A person can qualify for Chapter 13 easily but this entails making a full or partial repayment through the courts over three to five years. A debtor makes up a plan with the direction of the attorney which has to be approved by the court.

This is why bankruptcy filings should be the primary area of practice by a hired attorney. Experience and insight to the economics of an individual or the future profits and losses of a business have to be considered. Once the court approves the plan, then the debtor begins a repayment schedule. The court approves a trustee that oversees this payment.

The trustee makes the payments to the creditors, and this may involve three to five years of payments. When all payments have been made by the debtor as required by the court, the debt is discharged. Unlike Chapter 7 bankruptcy, Chapter 13 bankruptcy does not have a means requirement but the debtor must have a regular income from which to pay debts and with which to make a budget.

The Lanigans are experienced in helping a person decide which of the two bankruptcies would be most advantageous. A simple answer would be that a person who has lots of unsecured debt like credit cards and medical bills would be better off filing a Chapter 7 bankruptcy.

In a Chapter 7, much of the unsecured debt may be eliminated leaving the debtor with no if any creditors to repay, and the court process flows much more quickly. Creditors cannot contact the person under this protection.

Chapter 13 is better for the person who has a regular income and some property that would fall under the court and needs to be protected, especially equity in a home. Chapter 13 requires debt to be repaid in three to five years. Because the repayment goes through a trustee, once again, the creditors have no contact with the debtor.

Because of the additional legal process, time in court takes longer. If a person has a foreclosure pending or a repossession, choosing Chapter 13 with its automatic stay can help the debtor catch up on past due payments. The Lanigans review the specific financial needs of the client and advise which method is best.

In 2005, the U.S. Bankruptcy Code required a complete U.S. Trustee approved Credit Counseling Briefing. Petitions filed without this certificate may be dismissed, so it is important to hire a bankruptcy attorney to help write up the correct document in the right format.

If the petition is dismissed, creditors can take collection action, move on foreclosure or repossession until the automatic stay is in effect. This can result in a catastrophe for the person who struggles to keep up with payments and keeps getting further behind. Another requirement is to complete a U.S. Trustee approved financial management course, which is often called Debtor Education.

This must be completed before debts can be discharged. The Lanigans will have the information on where this course can be obtained. Many hard working people find themselves in financial distress and need help.

It’s not unusual. In every situation there are circumstances that led to overwhelming financial debt. Consult with Lanigan and Lanigan, P.L., to find out if bankruptcy and or foreclosure are an option to consider to relieve the personal and economic distress.