Bankruptcy law explained
Being in financial difficulty can be a very trying time, especially if you feel that there is no way out. Luckily there are some routes you can take to help provide relief and open a door to getting your life back. The easiest way to get help is to file for bankruptcy. However, you might think that the bankruptcy law is the same everywhere, but that is not the case. There are some common threads through all the different laws, but the laws differ from city to city and state to state. It might be advisable to hire a Greenville bankruptcy lawyer to help you navigate the process.
What is bankruptcy?
It is a legal proceeding that you can use to get out of your financial difficulties. The moment that you file for bankruptcy, it stops your creditors from seeking payment from you. All bankruptcy cases are handled by the federal court. Your creditors can only start collecting money from you once your finances have been sorted out according to the law and legal processes. You have the right to file for bankruptcy. This right is provided and protected by federal law.
Benefit of filing for bankruptcy
Bankruptcy is designed to enable you to have a fresh start financially. It eliminates all legal obligation for you to pay your debts, sometimes all of your debts. It allows you to “discharge” your debts. It stops your creditors from foreclosing on your home. Then it allows you the opportunity to catch up on your missed payments. Just remember that bankruptcy does not automatically cancel mortgages or other debts on your property. Most often, you still need to pay that or make arrangements concerning those payments. It also prevents the creditors from repossessing your property such as cars and boats. There is even the chance of forcing the lender to return your property if it has already been repossessed. If you have a garnishee order against your salary, it stops when you file for bankruptcy. There can be no creditors’ actions to collect a debt. The other benefit is that it restore or prevent your utility service being terminated. It also gives you time to challenge the claims of your creditors, especially if you suspect that they are claiming more than you owe or if the creditors committed fraud.
Different types of bankruptcy
There are four main types of bankruptcy that you can consider if you want to file. The first is file under Chapter 7 and is known as straight bankruptcy or liquidation. Straight bankruptcy or liquidation is when the debtor is required to give up a property, which will be sold to repay creditors. There is a certain limit attached to the value of this property, and it is called an exemption.
Then there is Chapter 11 bankruptcy, also known as reorganization. It is used by businesses and some individual debtors who have enormous debts. Chapter 12 is especially for family farmers. Lastly, one can file under Chapter 13, called wage earner’s plan which means that the debtor file a plan to pay debts with the earner’s current income. Usually, people file under chapter 7 or chapter 13. It also is possible to file as a married couple or as an individual.
Filing for bankruptcy in South Carolina
You must ensure that you are well informed regarding the different types of laws in your state and city. If you have moved recently from another state to Greenville or South Carolina, then your old state’s laws might be applicable.
South Carolina’s bankruptcy exemptions
South Carolina is one of the states where the federal law exemptions are applicable, unlike Illinois which is known as an opt-out state. You must be a resident of South Carolina for at least two years for the laws of the state to apply you.
The law states that you can only protect $5,000 of your primary residence as an individual; however, married couples can protect up to a maximum of $10,000 of a primary residence. It is vital to remember that a primary residence is a home where you live. Investment properties, beach houses, and other secondary residences are not exempt.
The state also offers an exemption of up to $1,200 for a car. There are other exemptions; it will be wise to do proper research on everything that can be protected before you file your application for bankruptcy. Understanding laws and discovering the things that can be protected is a benefit of retaining an experienced bankruptcy lawyer in Greenville. A skilled and knowledgeable bankruptcy attorney will be able to explain all the exemptions such as pensions and insurance to you.
The value of your property is the value that it is in the current market, not the value that you paid for it when you bought it. There is a big chance that your house value would have increased, but the value of your car and other belongings have probably lost value. The exemptions enable you to keep the property, but it does not take your obligation towards the lien or mortgage away.
The creditor holding your mortgage can still sell the property to recover costs if you are considerably behind on payments. If you file under chapter 13, you might be able to keep your property if your plan includes proper repayments. It usually involves a similar debt payment plan to what payment would have been if you hadn’t filed for bankruptcy.
Costs involved in filing for bankruptcy
There are different prices involved, depending under which chapter the application is necessary for the individual filing. The court can sometimes allow you to pay the costs in installments if you are unable to pay it all at once.
Choosing the correct chapter to file under
You must first decide what exactly you want out of a bankruptcy claim. If you want to keep property such as a home or a car, filing under Chapter 7 might not be the correct choice. If you file under Chapter 7, the property that is exempt according to the law is still exempt. Remember that Chapter 7 does not eliminate the creditor’s right to recover the money that is owed, especially if the property was the guarantee for the loan. Under Chapter 7 you apply for all your debts to be erased within limits.
Filing under Chapter 13 might be the right choice, especially if you want to keep the property. In the plan, you have the option to show that you will be able to pay off your past and current debt in a three to five year period. Chapter 13 is a good idea to use if you own property such as a house. It is important that you have enough income to cover all costs, which includes the cost of living as well as enough income to cover making the regular payments or extra payments.
I have filed for bankruptcy. Now what?
There are debts that bankruptcy will not erase. These debts include child or family support and alimony. Certain fines as well as taxes. All debts that you did not mention in your application. It is thus vital to make sure that you disclose everything you owe as well as any other pertinent information. If you give false information, especially if the information is critical to receiving a line of credit, the debt likely will not be erased. Debts that are the result of willful or malicious harm, as well as student loans, can not be removed through the bankruptcy process. Student loans will only be erased if the court decides that the payments will be an undue hardship. As mentioned, any mortgage or liens will also not be forgiven.
After filing for bankruptcy, it will be necessary and required to go to court. Typically, the court appearance is a simple and short meeting, where you will meet with the creditors (those who decide to show up) and the bankruptcy trustee. If you dispute any debts or there are complications, then you will be required to appear before a judge. It might be wise to hire an attorney whose is an expert in the bankruptcy law of Greenville or South Carolina, to represent you in court. The attorney will also be able to set the date and time for your hearing, and they will inform you well in advance to attend.
might be easy or it might be difficult. Since you are already not meeting your repayments on your debts, your credit record will already be affected. Bankruptcy stays on your credit record for ten years, so it is important to determine whether bankruptcy is the right option for the situation. An experienced bankruptcy attorney can help you make this decision and protect you throughout the claim process. After filing for bankruptcy, you might be in a better position to pay back credit. Depending on which chapter you chose to file. Just remember that creditors usually look at your credit record and bankruptcy will affect that record. Having a bad credit history will influence the choice to offer a line of credit.
Rest assured that your utility services will not necessarily be affected once you file the application. The companies providing the service might require a deposit for any future service. You will also be responsible for future bills after you have filed.
No one is allowed to discriminate against you because you have filed for bankruptcy. State law prohibits any employers, private or government, from discriminating against you.
Just remember that if you have had someone co-sign any credit agreement with you, they might be liable for your debt. If you have lost your driver’s license because you were behind on payments of court-ordered damages, bankruptcy will help you get your license back.
If you are married, you can file alone, but filing with your partner will increase your exemption amounts. If you do file alone, your partner will still be liable for any joint debts that you may share. One partner’s bankruptcy might show up on the other partner’s credit record, especially if you have had joint debts.
If you have not lived in South Carolina for 91 days, you must wait till you are living there for that period before filing the application. The exemptions that you will use then will be from the state in which you have lived for the better part of the remaining 180 days. Keep this in mind if you file, especially if you want to retain ownership of the property.
Filing for bankruptcy might be the best thing for you, or it can be the worst thing. Before you start the process, you must decide what exactly it is that you are looking to get out of the process. There are various factors and elements that must be taken into consideration. It is advisable to retain an experienced bankruptcy attorney that is familiar with the bankruptcy laws in South Carolina. A skilled and dedicated bankruptcy lawyer will help to ensure that you are in compliance with the law and you follow all the correct processes while making sure your rights are protected. If you have a lot to lose by filing bankruptcy, the Greenville bankruptcy lawyer will be able to help you make the correct choice, specifically to determine which chapter you must file.