Van Tubergen and Treutler, PLLC represents consumers in filing two types of bankruptcy petitions - Chapter 7 and Chapter 13. In a Chapter 7 bankruptcy, the debtor surrenders all non-exempt property to a bankruptcy trustee who then liquidates that property and distributes the proceeds to the debtor's unpaid creditors. As a result, the debtor is entitled to a discharge of the unsecured debt, meaning the debtor is not legally responsible for further payment. Typical unsecured debt would include credit cards, medical or dental bills, retail accounts, etc. The debtor's secured debts are handled by reaffirmation (an agreement to continue regular payments with a creditor), redemption (payoff of an agreed amount owed the creditor) or surrender to the trustee of the item secured for disposal by sale. Secured items are generally homes, automobiles or large item purchases at retail stores. Further some debts are not dischargeable, such as student loans, spousal and child support, some taxes, etc. Debtors are also able to exempt a certain amount for particular items or in some cases the entire value of items in order to keep them.
In a Chapter 13 bankruptcy, a debtor retains ownership and possession of all assets, but must agree to a plan to repay some portion of debt to creditors from future income over a period of from three to five years. The amount of payment and the months of repayment vary among all debtors filing under Chapter 13. Consideration of the debtor's property value, income and expenses all determine the make-up of the plan. Unsecured creditors generally only receive a percentage of the amount owed by the debtor. This plan must be reviewed and approved by the bankruptcy judge at a confirmation hearing.
In order to evaluate a debtor's potential case, the debtor should bring the following items to the consultation meeting.
- A copy of every current bill from creditors or collection letters;
- A copy of any lawsuit in which the debtor is involved;
- Pay stubs for the last three months including your spouse's pay stubs even if you are not filing jointly;
- Recorded copies of deeds to any real estate you own or have an interest in;
- Original titles to any motor vehicle or mobile home you own or are purchasing;
- Appraisals of your home or recent property tax statements listing the SEV;
- Life insurance policies you own; current statements of IRA's, annuities, etc. you own;
- Any other financial information about yourself or your investments;
- Income tax returns for the previous two years;
- Bank statements for the last three months.
In order to file your bankruptcy, BAPCPA requires that each debtor obtain credit counseling prior to filing. This is done by telephone or over the internet. You will be given further information about this at your initial consultation.