Elmer McDuffy: Bankruptcy Lawyer Midvale Utah

The Utah bankruptcy process is complex. If you want to file for bankruptcy in Utah, seek the assistance of an experienced Utah bankruptcy attorney. If you have a lot of debts to pay off, use bankruptcy as the last option. Try and negotiate with your creditors. If the debt is backed by a collateral, surrender the collateral. If you have exhausted all your options, consider bankruptcy filing. An experienced Midvale Utah bankruptcy lawyer is the one you should talk to when you are considering bankruptcy.

The exact Utah bankruptcy process will depend on your chapter of filing. Individual debtors in Utah usually file for bankruptcy under Chapter 7 or 13. Individuals can also file under Chapter 12 but Chapter 12 is exclusively for discharging the debts of a family farmer or fisherman. The process involved in a Chapter 12 bankruptcy is more or less similar to a Chapter 13 process. An experienced Midvale Utah bankruptcy lawyer will review your circumstance and advise you on the chapter you should choose. Choosing the wrong chapter can have serious consequences. Don’t take chances.

Chapter 7 is by far the most popular bankruptcy for individuals. A Chapter 7 bankruptcy is often called liquidation because the Chapter 7 bankruptcy process is essentially a liquidation process.

Bankruptcy is a legal recognition that an individual or a business cannot pay its debts. There are many sections, or “Chapters,” of the bankruptcy code. These different Chapters try to deal with the different situations debtors find themselves in. The most commonly used Chapters of the bankruptcy code are Chapters 7, 11, and 13. Debtors, assisted by the courts, must decide which Chapter best addresses their situation. Speak to an experienced Midvale Utah bankruptcy lawyer before you decide on the Chapter.

Chapter 7 Bankruptcy

Chapter 7 bankruptcies apply to individuals. Under Chapter 7, all of the individual’s assets are “liquidated”–sold off–by the courts to pay creditors. To determine what assets the debtor owns, a complete list must be supplied to the federal bankruptcy court. In addition, a full accounting of all liabilities must be presented to the court. Once the assets have been liquidated, creditors start getting paid. First in line is the government! Payment of taxes gets the highest priority.

Some financial obligations must be paid even after a Chapter 7 bankruptcy is finalized, including alimony and student loans. Naturally, few creditors will ever see their money because of the sad condition of the debtor’s finances. And the debtor now has the bankruptcy recorded in his credit file, which means that the likelihood of receiving additional credit is slight–at least for the next ten years. In a Chapter 7 bankruptcy, the bankruptcy trustee who is appointed by the court will take over the assets of the debtor. The assets will then be liquidated and the creditors will be paid off from the amount recovered through liquidation. Some creditors may not be repaid in full. But the debt will be discharged and the debtor will no longer be responsible for that debt. An experienced Midvale Utah bankruptcy lawyer can help you file a Chapter 7 bankruptcy in Utah. Chapter 7 filing can be complex. There are many complex forms to be submitted to the court.

Chapter 11 Bankruptcy

Chapter 11 bankruptcies apply to businesses. By filing under Chapter 11, a business is allowed time to reorganize the firm, and is shielded from persistent creditors. The hope is that through reorganization, the firm can return to profitability and thereby repay some of its debts. While the firm continues with its day-to-day operations, the bankruptcy court reviews the firm’s financial condition, and hears from the firm’s creditors–who may ask the court to investigate the firm for mismanagement or other wrongdoing. The Chapter 11 court proceedings may take years to complete and, even if the firm’s reorganization efforts are successful, there is a distinct possibility that the firm will pay its creditors only a fraction of what is owed to them. Speak to an experienced Midvale Utah bankruptcy lawyer if you are considering a Chapter 11 bankruptcy in Utah.

Chapter 13 Bankruptcy

Chapter 13 bankruptcies apply to individuals who are not in the hopeless financial situation that individuals filing under Chapter 7 find themselves in. Under Chapter 13, debtors turn their finances over to the bankruptcy court. After examining the financial documents, the court decides how to deal with the situation. Often, the debtor’s debts are rescheduled so that a portion of the debt can be repaid over time. In addition, a bankruptcy trustee may be appointed to oversee the case for the next few years. It is also common for the debtor’s wages to be tapped by the court to help repay creditors. The benefit to the debtor is that most of his assets are protected under Chapter 13. But the bankruptcy is recorded, and the prospect of receiving future credit is slim for a decade or so. In a Chapter 7 bankruptcy, the debtor submits a repayment plan. This repayment plan is placed before the creditors. Once the creditors approve the plan, the debtor has to make payments according to the plan. Once all the payments are made, the debts are discharged. Speak to an experienced Midvale Utah bankruptcy lawyer to know if you are eligible to file a Chapter 13 bankruptcy in Utah.

Credit Repair

Bankruptcy can remain on your credit. This will make it difficult for you to get loans, mortgage and credit cards. You should work on improving your credit score once you are out of bankruptcy. Some debts cannot be discharged in bankruptcy. You will have to pay them. Speak to an experienced Utah bankruptcy lawyer to know which of your debts can be discharged by bankruptcy and which debts will survive your bankruptcy.

Improving Your Credit After Bankruptcy

You have to deal with old and existing debt before you can truly move on. A Chapter 7 takes only 90 -100 days to discharge. A Chapter 13 gives you a full discharge as well, although it does take longer, the average being 3-5 years. If you don’t have enough debt to file a bankruptcy, then an attorney can help settle debt so you can get on a sustainable track with an end in sight instead of one where you are robbing Peter to pay Paul all the time.
Even if you file bankruptcy, not all debts are dischargeable in bankruptcy and have to be dealt with after the bankruptcy. Some of the debts that commonly survive a bankruptcy include:

• Debts you reaffirmed (agreed to keep paying), such as your mortgage or car loan

• Back taxes that were not discharged in your Chapter 7 bankruptcy (usually those less than three years old).

• Student loans (federal or private)

• Alimony, child support

Student loans are exceptionally difficult to discharge in bankruptcy. There is a separate legal proceeding called an “adversary proceeding” that you must file in addition to the underlying bankruptcy to attempt to prove that an undue hardship exists to justify the elimination of your student loans. The standard to discharge student loans is quite high although sometimes bankruptcy will help reduce student loan debt. That being said, there are often solutions to reduce your student loan payments to something that is both affordable and sustainable with an end in sight. Endless forbearances are only putting off the problem, and in fact, making it much bigger later in life. Consult a qualified Midvale Utah bankruptcy attorney regarding these solutions as soon as you can. The sooner you create a plan to deal with your student loans, the quicker they will be in your rearview mirror.
If you have federal student loans, there are many excellent income based programs with debt forgiveness.

It’s important to seek the advice of a qualified student loan attorney because these programs are not “one size fits all,” and the servicer is not required to give you all of your options or help to identify which option is best for you. They are merely debt collectors. For private loans, we recommend negotiating a settlement to put an end to this debt once and for all. This can include payment plans, but will usually only be effective upon a default so they are willing to negotiate. Often private lenders have poor documentation and many defenses exist to repayment. Finally, these lenders commit frequent consumer law violations that can be used as leverage in a settlement by a knowledgeable Midvale Utah bankruptcy lawyer.

Building and Maintaining Good Credit

The best time to start building your credit is when you don’t need it, so there is time for the small incremental increases to build over time. People with no credit will build their score faster than someone with bad credit – but either way it will happen faster than you might think. Many debtors are able to get back to high 600s, low 700s within two years of filing a bankruptcy, sometimes earlier.

Can you Re-establish Credit After Bankruptcy?

It is actually easier to re-establish credit after a bankruptcy than it is for a person who has not filed bankruptcy and has poor credit. In a way, while a bankruptcy will cause your credit score to go down initially, it also provides a base from which it can go up. Bankruptcy does not automatically make you a bad credit risk. Provided the rest of your credit information is good, bankruptcy can actually make getting credit easier. Your debt to income ratios following a bankruptcy may be the best they have ever been. You cannot file another Chapter 7 bankruptcy for over eight years, so many creditors will view you as a good credit risk. You are likely much less of a credit risk than someone who has a lot of debt on their credit report and could file a Chapter 7 bankruptcy at any time. Some people will say to you that you should be debt-free and pay cash for everything. I take a slightly different approach. Credit is important, there are things that you ordinarily can’t just pay cash for, such as a car or home, for instance. That’s why it’s important to re-establish your credit so it is there when you are ready to use it again.

Most negative information more than seven years old must automatically be removed. There are four exceptions:

1. A Chapter 7 bankruptcy will remain for ten years.

2. A Chapter 13 bankruptcy will stay on for seven years from the date you complete your repayment plan (which generally lasts three to five years from the date of filing).

3. Tax liens, paid lawsuits and judgments stay on seven years from the date you paid them off.

4. Unpaid lawsuits or judgments stay on your credit report for seven years from the date they were entered or the time allowed by law for collecting the judgment, whichever is longer. This period of time varies from state to state, but it can be as long as 20 years.

Getting Rid of Credit Report Errors

If you see discharged accounts that are still reporting on your credit report, you can file a “Dispute” to update your credit report. You may see debts still listed as delinquent, under collection, or charged off – all of which are negative entries that will continue to adversely affect your credit. You would also need to send a request to the creditor to correct their records and provide the updated information to each credit bureau. Send any request to a creditor via certified mail, return receipt requested, to ensure you have proof of when you sent your request. You will need to update each credit report. Alternatively, there are credit repair organizations that will send disputes on your behalf. An experienced Midvale Utah bankruptcy lawyer works closely with local credit repair agencies and can recommend them to you. If the credit reports are not accurately updated after you have filed a dispute and notified the creditor, you may have a violation of the Fair Credit Reporting Act. It takes approximately 45 days for a credit inquiry to be processed.

Midvale Utah Bankruptcy Lawyer Free Consultation

When you need legal help to file a chapter 7, chapter 11, chapter 9, chapter 12 or chapter 13 bankruptcy in Utah, please call Ascent Law LLC (801) 676-5506 for your Free Consultation. We want to help you.