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Montgomery County Bankruptcy

What is Bankruptcy?

Bankruptcy is a legal process that allows individuals and businesses to eliminate or reorganize their debt. The process is handled in federal bankruptcy court and designed to give filers a way to get back on stable financial footing.

There are several types of bankruptcy, including:

  • Chapter 7: Also known as “liquidation” bankruptcy, Chapter 7 allows individuals and businesses to eliminate their debt. Some of the filer’s assets may be sold to pay off creditors, but bankruptcy exemptions protect many assets.
  • Chapter 11: Chapter 11 bankruptcy is primarily designed for businesses, but individuals can also file for this type of bankruptcy. It allows filers to reorganize their debt and create a plan to repay creditors over time.
  • Chapter 12: Chapter 12 bankruptcy is only available to family farmers and fishers. It allows them to reorganize their debt and create a plan to repay creditors over time.
  • Chapter 13: Chapter 13 bankruptcy is only available to individuals and is similar to Chapter 11. It allows filers to reorganize their debt and create a plan to repay creditors over time.

How to File for Bankruptcy in Montgomery County

Filing for bankruptcy in Montgomery County is a complex and multistep process. Having an experienced bankruptcy attorney by your side is crucial to help you navigate the process and ensure you meet all filing requirements.

Here is a general overview of the bankruptcy process:

  • Determine if bankruptcy is right for you: Our Montgomery County bankruptcy lawyers can help you understand your options and make an informed decision.
  • Complete credit counseling: Before filing for bankruptcy, you must complete a credit counseling course. You will need to provide proof of completion when you file.
  • Complete the means test: This test is used to determine if you are eligible for Chapter 7 bankruptcy or if you will need to file for Chapter 13 bankruptcy.
  • Gather the necessary documents: This includes tax returns, pay stubs, and bank statements. You must also list your assets, debts, and living expenses.
  • Complete the bankruptcy petition: This lengthy document includes information about your debts, assets, income, and expenses.
  • File the bankruptcy petition: You must pay a filing fee unless you qualify for a fee waiver. If you file for Chapter 13 bankruptcy, you must also submit a proposed repayment plan.
  • Attend the meeting of creditors: During this meeting, the bankruptcy trustee will ask you questions about your financial situation and verify the information in your petition.
  • Complete a debtor education course: After the meeting of creditors, you will need to complete a debtor education course. If you do not complete this course, your debts will not be discharged.
  • Receive your bankruptcy discharge: This eliminates your obligation to repay certain debts.

What Can Bankruptcy Do for Me?

Bankruptcy can give you a fresh start and help you get back on your feet. Depending on the type of bankruptcy you file, you can eliminate or reorganize your debt and get the relief you need.

Some of the benefits of filing for bankruptcy include:

  • Automatic stay: As soon as you file for bankruptcy, an automatic stay goes into effect. This court order requires your creditors to immediately stop all collection actions, including foreclosure, wage garnishment, and repossession.
  • Debt relief: Depending on the type of bankruptcy you file, you can eliminate or reorganize your debt. With Chapter 7 bankruptcy, you can eliminate unsecured debts, including medical bills and credit card debt. With Chapter 13 bankruptcy, you can create a plan to repay your debt over time.
  • Property protection: Many people mistakenly believe that filing for bankruptcy means losing everything they own. However, many assets can be protected by bankruptcy exemptions. Our Montgomery County bankruptcy attorneys can help you understand which of your assets are protected.
  • Improved credit score: While bankruptcy will hurt your credit score, it is only temporary. By filing for bankruptcy, you can eliminate your debt and rebuild your credit.

What Debts Are Not Dischargeable in Bankruptcy?

While bankruptcy can provide significant debt relief, it is important to understand that not all debts are dischargeable. For reasons such as public policy and fairness, certain types of debt cannot be eliminated through bankruptcy.

Some of the debts that cannot be discharged in bankruptcy include:

  • Student loans (unless you can prove that repaying the loans would cause you undue hardship)
  • Child support and alimony
  • Debts you fail to list in your bankruptcy petition
  • Tax debts
  • Debts incurred through fraud
  • Debts incurred due to willful and malicious conduct
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