South Carolina Bankruptcy Lawyer
Serving Charleston, Berkeley, Dorchester, Colleton, Beaufort, Horry Counties
If you are having trouble keeping up with your bills and may be facing foreclosure or repossession action, bankruptcy may be the right solution to get you back on the right path. At the Steadman Law Firm, P.A., our bankruptcy lawyer works with clients throughout the Lowcountry to find the debt relief solution that meets their needs.
Our bankruptcy lawyer can help you file for Chapter 7 and Chapter 13 or provide alternative solutions if bankruptcy is not right for you. We will take the time to help you understand all your options and give you all the information you need to choose the right solution. Contact our office today to schedule your initial consultation.
What Is Bankruptcy and How Does It Work?
Bankruptcy is a legal vehicle that provides relief to individuals and businesses in serious financial trouble and protects their creditors to the extent possible. Generally, the bankruptcy process assesses the debtor’s assets and liabilities and provides a structure within which the debtor is allowed to keep some, and in most cases, all property and ordered to satisfy as many eligible debts as possible, according to an order of priority established by law. Remaining debts are discharged, except those of certain types, like domestic support orders, debt obtained by fraud and most tax debt.
The traditional stigma of bankruptcy has faded and been replaced by the view that it is a fresh start after a time of trouble. Most bankruptcy debtors have experienced unexpected and extreme financial shock, such as that caused by sudden events such as job loss, business failure, death, divorce or illness.
In such cases, filing bankruptcy may be the right answer. If you are facing serious financial challenges, contact Steadman Law Firm, P.A. in North Charleston, S.C., to schedule a consultation with an experienced bankruptcy lawyer who can help you assess your legal options.
What Are the Benefits of Filing for Bankruptcy?
Filing bankruptcy can give you a fresh financial start. You get an immediate stay from your creditors. In other words, the moment you file, the phone calls and threats should immediately stop. Furthermore, lawsuits, wage garnishments, repossessions, and foreclosures also stop. This gives you time to organize your finances and come up with a plan of attack without feeling the constant pressure of feeling threatened.
For many people this a scary and even shameful process. But life has a way of not working out the way we planned. Under ideal circumstances, no one would ever have to file for bankruptcy. But an untimely injury or sudden loss of income has a way of turning our best-laid plans on their head.
A bankruptcy lawyer can not only help you clear and settle your debts but may be able to save your home and other important assets.
We Can Help You With the Bankruptcy Filing Process
There are a number of forms that will need to be filled out and then filed with the court. This includes a petition for bankruptcy and a series of schedules. You will need to list every creditor that is making a claim against you. You will also need to list your income and your assets. Failure to file these accurately may result in your petition being denied.
As soon as the bankruptcy is filed, you get an automatic stay from your creditor’s attempts to collect on your debts. From there, the process varies depending on whether you file Chapter 7 or Chapter 13.
Understanding the Different Types of Bankruptcy
There are two different kinds of bankruptcy available for individuals: Chapter 7 and Chapter 13. A bankruptcy attorney can help you decide which one is right for you. We’ll discuss the particulars of each below.
Chapter 7 is known as liquidation bankruptcy. You can settle your debts quickly under Chapter 7. However, you may need to sell off or liquidate some of your assets in order to do that. A bankruptcy attorney can help protect some of your assets like your home or your car.
To file under Chapter 7 you must be able to pass a means test. The means test determines whether or not your income is low enough as well as whether your situation is dire enough.
If you are eligible for Chapter 7, you will have to attend a meeting called the 341 Meeting of Creditors. It is conducted by the bankruptcy trustee who neither works for you nor the creditors. The trustee will ask you a few questions and confirm your identity.
A bankruptcy attorney can help you decide if Chapter 7 is the right call for you.
The Means Test
The means test is used to determine if you qualify for Chapter 7 or not. There are two main parts.
Firstly, if your annual income is below the median for a family of your size in your state, then you pass the means test automatically.
It only gets complicated when your annual family income exceeds that of the median for your state. In that case, the court will determine how much disposable income you have against your necessary expenses. If paying back your creditors would eat up enough of your disposable income to put you in an unmanageable situation, then you may very well still pass the means test. A bankruptcy attorney can usually predict whether or not you’ll pass the means test.
Chapter 13 is known as reorganization bankruptcy. If you don’t pass the means test for Chapter 7, you may be forced to file under Chapter 13.
Reorganization bankruptcy entails developing a manageable repayment plan to satisfy your debts. The court will not require you to liquidate your assets, but you will have to repay your creditors under the revised plan. The benefit of this is that it’s reorganized to be within your means. In other words, it should be more manageable than it was before.
It’s important to note that Chapter 13 may be better suited to certain kinds of debt that cannot be discharged under Chapter 7. It’s also better for dealing with a default on a mortgage.
Are There Alternatives to Bankruptcy?
Filing for bankruptcy is often the best option for certain people in certain situations, but for others, debt consolidation may be a viable option. Debt consolidation means that you take all of your debts and combine them into one. You then pay a fixed rate on the one consolidated debt.
A bankruptcy attorney can help you through this process as well. Basically, a debt consolidator purchases your debt from your creditors. They give you a fixed interest rate, and (hopefully) a repayment plan that you can manage. The bankruptcy does not go on your credit record, and it will get your creditors off your back.
If, however, the repayment plan is more than your budget can accommodate, you will have to file for bankruptcy.
What Types of Debt Can Bankruptcy Discharge?
Chapter 7 can discharge the following:
- Medical debt
- Credit card debt
- Lawsuit judgments
- Debts under leases and contracts
- Personal loans
In addition, some types of debts can only receive discharge through Chapter 13. These include debts:
- That could not be discharged in a prior bankruptcy
- Arising from a divorce settlement
- Incurred via court fees
- Incurred to pay taxes
- Accumulated from an HOA
There are also some forms of debt that cannot be discharged at all. These include:
- Child support and alimony payments
- Fines issued by the government for unlawful acts
- Debts that arise from a DWI to an injured party
There is one last category of debt that cannot be discharged unless you petition the court. These include:
- Student loans
- Income tax debt
In some cases the court will discharge these debts at the behest of your bankruptcy attorney.
A Bankruptcy Attorney Can Help You Stop Harassment From Creditors
There are a number of actions that creditors can take that rise to the level of creditor harassment. This can include calling you more often than the law allows, calling you during prohibited times, contacting your friends and neighbors concerning your debt, or swearing at or threatening you.
There are certain behaviors that cross the line, even for creditors. If you’re getting phone calls that you feel violate your rights, then be sure to make your bankruptcy attorney aware of the situation.
Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), Bankruptcy Reform Law Requirements
In 2005, Congress passed and the president signed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), a bankruptcy reform law. One of the new requirements BAPCPA imposes on a bankruptcy debtor is to receive credit counseling from an approved credit counseling agency before the bankruptcy filing and the debtor is subject to a “Means Test” to determine if you are properly in bankruptcy.
Surviving the Emotional Effects of Bankruptcy
No matter what circumstances ultimately led to filing bankruptcy, both the practical and the emotional impact on the debtor will be enormous. Confronting the emotional and psychological issues surrounding bankruptcy and reaching an understanding and acceptance of the situation are essential to rebuilding and maintaining a successful financial life.