Do You Need a Rhode Island Bankruptcy Lawyer?
Bankruptcy is a legal means through which individuals and business can get relief from serious financial troubles. It also provides certain rights to creditors, allowing them a share of the debtor’s assets based on the priority of their claim to the funds.
While bankruptcy can give a person a fresh start, it is important to remember that bankruptcy can also negatively affect credit ratings and make it harder to obtain credit in the future.
If you are facing serious financial challenges, it is important to seek the counsel of a skilled bankruptcy attorney to help you assess your legal options.
For more than 45 years the skilled bankruptcy attorneys of Gemma Law Associates, Inc., have been helping families that have financial troubles – and we can help you. We represent clients throughout the state of Rhode Island including Providence, Newport, Woonsocket, Bristol, Pawtucket and Warwick.
Filing for bankruptcy results in an evaluation of the debtor’s assets and liabilities. Filing also imposes an automatic stay that prevents creditors from taking any action to collect debts. A structure is formulated that allows the debtor to keep some property while satisfying as many eligible debts as possible. The United States Bankruptcy Code provides several ways to file for bankruptcy. The most common methods are under Chapter 7 and under Chapter 13 of the Code.
Understanding Chapter 7 Bankruptcy
Chapter 7 is known as a liquidation proceeding while Chapter 13 is a reorganization proceeding. A debtor who files under Chapter 7 turns over all non-exempt property to a trustee who converts the property into cash and distributes it to the creditors. All eligible debts are quickly discharged and do not require repayment.
In contrast, the main purpose of filing for bankruptcy under Chapter 13 is to enable a debtor to keep certain assets that would otherwise be liquidated by a Chapter 7 bankruptcy. Most of the debts are repaid over a three to five-year period. To be eligible for filing under Chapter 13, a debtor must have predictable income that is sufficient to pay reasonable expenses, with enough remaining to pay outstanding debts.
The traditional stigma of bankruptcy has largely faded and been replaced by the belief that bankruptcy provides a new beginning after a period of financial trouble. Most bankruptcies result from unexpected and extreme financial disruptions caused by unemployment, business failure, medical expenses, marital splits, home mortgage problems and seriously overextended credit. In these cases, filing bankruptcy may be the best solution to financial woes. It is important to note that some debts are not dischargeable. They will remain after a Chapter 7 bankruptcy or must be paid during a Chapter 13 bankruptcy.
Non-dischargeable debts include:
- Debts not listed in the bankruptcy papers
- Child support
- Debts for personal injury or death caused by the debtor
- Student loans
- Fines and penalties imposed for violating the law
- Most tax debt.
A 2005 bankruptcy reform law has caused many people to mistakenly believe that they cannot file for bankruptcy. This is not true. However, the law did impose new requirements. For instance, a new bankruptcy debtor must receive credit counseling from an approved credit counseling agency before the bankruptcy filing. A state-by-state list of government-approved credit counseling organizations can be accessed at https://www.justice.gov/ust.
The Providence bankruptcy attorneys of Gemma Law Associates, Inc., can also help educate debtors about these new counseling requirements. We understand that circumstances exist that can result in financial problems for even the most conscientious and hard-working people.
We can guide you through the complicated legal, financial and emotional maze of bankruptcy and steer you in the right direction. If you are burdened with debt and need the help of an experienced bankruptcy lawyer, contact us today.