Law offices of G A Flores

Bankruptcy Overview


If you find yourself among the millions of people struggling with overwhelming unpaid debt, know that you are not alone.  There are usually several explanations as to why well intentioned hardworking people can no longer continue to repay their debt.  You may have recently been laid off from your job or business due to the tight economy.  You might have been divorced or faced medical bills from an accident, injury or illness.  Whatever the reason behind your financial situation, there are usually different options available for overcoming your debts and achieving a fresh financial start.

Bankruptcy is a good way to overcome your financial burdens.  After you file, your creditors will no longer be able to contact you, harass you, or continue legal action against you.  If your wages are being garnished, this will stop (except in cases for child support, etc.)  Any repossessions or foreclosures of your property will also stop.

Chapter 7 Bankruptcy

In a Chapter 7 Bankruptcy, the debtor is not required to repay his unsecured debts.  This means that loans, credit cards, medical bills and other similar debts are wiped out.

The debtor is given a fresh start.  There are a few categories, such as child support, student loans and certain taxes which are not dischargeable in a Chapter 7.

In 2005, the Bankruptcy Code was changed and imposed additional requirements for a discharge.  Many people still qualify for bankruptcies, even thought a “means test” is now used to determine eligibility.  This test is based on your household sized and annual income.  Contact our law office to determine whether you qualify under the means test.  Even if you don’t, you could still qualify for a Chapter 13, or perhaps a debt settlement option.

Chapter 13 Bankruptcy

In a Chapter 13 Bankruptcy, debtors with non-exempt assets are allowed to pay an affordable amount back to unsecured creditors and possibly modify some of their secured debts.  A Chapter 13 Plan can protect your home from foreclosure, your car from being repossessed your wages from being garnished and lawsuits and collectors from continuing against you.  Depending on your circumstances, you may be allowed to pay only a percentage (a base plan) of what you owe to unsecured creditors (like credit cards).

If confirmed, a Chapter 13 plan will allow you to repay your debts in monthly payments from 3 to 5 years.  Your repayment amount is on your assets, income and expenses.

Guillermo A. Flores, Esq.

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