debts From Our Springfield Bankruptcy Attorney

Pros and Cons of Chapter 7 Bankruptcy

September 19, 2019 By Shari DeArmon

The decision to file for bankruptcy is an extremely difficult one. Bankruptcy can potentially hurt your credit, your reputation, and even your future. Filing for Chapter 7 bankruptcy can be damaging, but it may also provide some relief and solutions to get your finances back in order. Because of this, the bankruptcy lawyers at Groce & DeArmon want to talk about the advantages and disadvantages of filing for Chapter 7 bankruptcy to help you make the right decision.

Disadvantages

Your Credit Could Take a Hit

One major disadvantage of Chapter 7 bankruptcy is that your credit score can go down significantly, especially if your credit was previously at a 700 or higher. In addition, a history of bankruptcy can remain on your credit report for up to 10 years. However, if you have poor credit, like most people who choose Chapter 7, your credit may actually improve.

You May Lose Some Property

Depending on what state you live in, you may lose valuable property such as a car or a house in order to repay your debts. Some property may be listed as an exemption and can be protected in Chapter 7 bankruptcy.

Not All Debts Will Be Erased

If you file bankruptcy, it will generally only erase tax debts that are over 3 years old. Debts like student loans can not typically be erased, but in rare instances of undue hardships, they may be included. Keep in mind that proving that your student loans are causing you undue hardship is a difficult task that requires consulting with a bankruptcy lawyer.

Advantages

Immediate Relief

When you file for bankruptcy, something called an automatic stay goes into effect. This prevents lenders from collecting their debts during a specific amount of time. In Chapter 7 bankruptcy, the automatic stay can last for as little as 30 days.

It Can Improve Your Credit

Since Chapter 7 bankruptcy is meant to erase many types of debt, it can actually help improve your credit score if it was below 600 before filing. There are many ways to start rebuilding credit after bankruptcy, like budgeting or signing up for a secured credit card. Lenders will be more likely to offer credit to those who have successfully completed Chapter 7 bankruptcy.

You Can Avoid Wage Garnishment

If you are behind on loan payments, creditors may try to get the money they lost back through wage garnishment. This is a court order that allows creditors to regain money lost by taking a portion of your paycheck. When you file for Chapter 7 bankruptcy, the automatic stay will prevent wage garnishment and ultimately improve your income.

Filing for Chapter 7 Bankruptcy

If you are thinking about filing for Chapter 7 bankruptcy, it is important to consult with a trusted bankruptcy attorney to make sure you are making the right choice. Shari DeArmon at Groce & DeArmon has worked on Chapter 7 and Chapter 13 cases in the Springfield, MO, area for over 30 years, and she can help you make the right decision. To get started, schedule a free consultation or call us at 417-862-3706 for more information.

Groce and DeArmon Explain: The Chapter 13 Bankruptcy Repayment Plan

June 17, 2019 By Shari DeArmon

If you have filed for or are thinking about filing for Chapter 13 bankruptcy, it’s important to understand how a repayment plan can help you find a clear path to getting out of debt. In today’s blog, Groce & DeArmon, P.C. explain what you need to know about the Chapter 13 bankruptcy repayment plan, and how their team of bankruptcy lawyers can help.

The Chapter 13 Repayment Plan

The Chapter 13 repayment plan is a legal document filed in bankruptcy court that will determine how you will pay back your creditors. It must be filed within 14 days of filing for bankruptcy, and after that, the judge and creditors have the chance to assess or challenge the plan. If the court approves your plan, then you are able to pay back the eligible debts you owe.

When creating a repayment plan, it is possible to do it yourself. However, the process is complicated and very detailed, so it’s best to work with your bankruptcy lawyer who can help hammer out all of the small details.

Categories of Debt

In a Chapter 13 repayment plan, your debts will most often be divided up into three different categories depending on what type of debt is being repaid.

Priority Debts

These debts must be paid off during your repayment plan, unless they are given specific exceptions. Priority debts include taxes owed, bankruptcy costs, and child support payments.

Secured Debts

These debts include secured loans backed by collateral such as a mortgage or auto loan. You may be required to pay back the collateral or pay the debt in full depending on the details of the loan.

Unsecured Debts

These are debts from credit cards, unsecured personal loans, and medical bills. Since these debts have the last priority in a repayment plan, they may not be completely paid off by the end of the plan. In this case, these debts may be discharged.

The Chapter 13 Means Test

The Chapter 13 means test will ultimately determine the structure of your repayment plan using two forms. Form 122C-1 will determine your monthly income and the length of repayment, and Form 122C-2 will determine how much of your disposable income you can use to pay back creditors. When taking the Chapter 13 means test, it is important to use accurate numbers and consult with your bankruptcy lawyer to avoid problems with the courts.

The Importance of Following the Repayment Plan

After your repayment plan is approved, you will be appointed a bankruptcy trustee who will aid you with payments on the approved schedule. It is important to closely follow the determined payment schedule because missing or stopping payment could result in a dismissed bankruptcy case. A dismissed case will ultimately cancel Chapter 13 bankruptcy, causing you to start over or convert to a Chapter 7 bankruptcy case.

A good way to keep current with your repayment plan is to use autopay or a payroll deduction to ensure they are turned in on time and in the right amount.

Chapter 13 Bankruptcy Help at Groce & DeArmon, P.C.

If you have filed for or are thinking about filing for Chapter 13 bankruptcy, keep in mind the benefits and the process of the Chapter 13 repayment plan. The trusted bankruptcy lawyers at Groce & DeArmon, P.C. can help with bankruptcy resources and repayment plan assistance. Visit us online or call us at (417) 862-3706 today!

Common Questions about Chapter 7 Bankruptcy

January 15, 2018 By Shari DeArmon

If you are filing for Chapter 7 bankruptcy, you probably have a few questions. Actually, you almost certainly have a lot of questions. Who wouldn’t? Filing for bankruptcy is never fun, but it’s often made more difficult because of mischaracterizations or misunderstandings. There are a few things that people are filing for Chapter 7 bankruptcy should know before filing and as they go through the process. In today’s blog post, Groce & DeArmon, P.C. addresses some of the common questions regarding Chapter 7 bankruptcy so that you are fully informed when you file.

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is the most common form of bankruptcy and, subsequently, it is also the simplest. With Chapter 7, a court-appointed trustee takes control of all of the debtor’s assets not protected by exemptions. The trustee may then sell those assets and distribute the revenue to priority creditors. In exchange for these assets, the debtor gets a discharge from his personal liability on qualifying debts.

What Debts Are Qualifying?

With Chapter 7, this answer is simpler than its sibling, Chapter 13. All debts are released by a Chapter 7 discharge except for a list of roughly 16 disqualified debts. These disqualified debts include certain tax debts, debts not listed in your Chapter 7 papers, alimony, and some loans.

Am I Eligible?

Any person who resides, does business, or owns property in the United States is eligible to file under Chapter 7. The only exception is for a person or persons who have been involved in another bankruptcy case that was dismissed within the last 180 days. There are more exceptions for those seeking a Chapter 7 discharge, however.

The bigger question is whether or not you should file under Chapter 7.

Should I File Under Chapter 7?

This depends completely on your individual situation. The immediate results are less than optimal, with you losing all of your assets, credit cards, and even perhaps your property.
Chapter 7 will also do a number on your credit score and can remain on your credit report for up to 10 years.

However, the long-term results are often worthwhile. For those worried about their credit scores, those scores are also impacted by missing payments, defaulting, and having assets repossessed, which will likely happen without debt relief.

Let Groce & DeArmon Help

At Groce & DeArmon, we specialize in Chapter 7 bankruptcy and want to help you find the best possible solution. Contact us at (417) 862-3706, call us toll-free in Missouri at 1 (800) 640-3706 or visit our website for more information.

Who is Eligible for Chapter 13 Bankruptcy?

November 29, 2017 By Shari DeArmon

Filing for bankruptcy is never an easy option, but for some debtors, Chapter 13 Bankruptcy may seem like the best for a bad situation. Unlike Chapter 7 Bankruptcy which requires you to liquidate your assets to pay off your creditors, Chapter 13 Bankruptcy allows you to make payments on your debt over a period of several years. Although this may sound like an ideal option, not everyone is eligible to file for Chapter 13 Bankruptcy. Below, a Groce & DeArmon bankruptcy attorney discusses the eligibility requirements.

You Cannot Be Business Entity For Chapter 13 Bankruptcy

Chapter 13 Bankruptcy only applies to individuals, not business entities. Instead of filing under Chapter 13, corporations and limited liability companies (LLC) must file under Chapter 11 Bankruptcy. However, sole proprietorships are the only exception to the rule. If you own your own business, you may be able to put the debts under your name and file under Chapter 13.

Your Debts Cannot Be Too High

If your debts are too high, you will not be eligible to file under Chapter 13. The amount of debt you can accumulate adjusts for inflation, but as of 2017, your secured debt cannot exceed $1,184,200 or your unsecured debts cannot exceed $394,725. If your debts are greater than the current limits, you may have to file for Chapter 7 Bankruptcy instead.

You Must Have Sufficient Income

To qualify for Chapter 13, you must prove to the bankruptcy court that you can pay back your debt in full. Therefore, you must have sufficient disposable income to make payments after taking into account your other required expenses, such as your car loan, mortgage, and any other payment obligations. As long as you have the ability to make your debt payments, your income can come from a variety of sources, including regular working wages, self-employment, pension payments, child support, and more. To see if you have enough disposable income, consult a bankruptcy attorney.

You Must File Your Income Tax Returns

Additionally, to file for Chapter 13 Bankruptcy, you must prove that you have filed your income tax returns for the last four years. When you apply for Chapter 13, be sure to provide a transcript of your most recent tax return filed with the IRS.

Contact a Bankruptcy Attorney

Filing for Chapter 13 Bankruptcy is a difficult and time-consuming process. To meet the eligibility requirements outlined by the bankruptcy court, you must provide proof of income and other necessary paperwork. To ensure you have the greatest chance of approval, consult a bankruptcy attorney at Groce & DeArmon, P.C.. At Groce & DeArmon, our team will work with you to develop a strong application and a convincing argument in court. To learn more about our services or schedule a consultation, contact us today.

How to Recover After Filing for Chapter 7 Bankruptcy

October 16, 2017 By Shari DeArmon

Many people assume that your financial future is ruined following Chapter 7 bankruptcy. This simply isn’t true. It is possible to reliably rebuild your finances and credit by proving your responsibility to creditors and financial institutions. This can take time and poses different hurdles than if you were trying to build credit for the first time.

The team at Groce & DeArmon, P.C. has been helping people through bankruptcy filing in the Springfield, MO area for over 25 years, so we know how to see you through the process efficiently and with as little fuss as possible. And while we aren’t experts in rebuilding credit, we have learned a thing or two over the years. Here are some tips for recovering your finances after filing for Chapter 7 bankruptcy.

Reflect and Exercise Patience

Once you’ve had a majority of your debts discharged through Chapter 7 bankruptcy, you may encounter a sensation of freedom that you didn’t feel underneath the weight of excessive debt. Be careful not to let this get to your head – you have a long road ahead of you if you want creditors to view you as responsible enough to build serious credit again.

It is probably a good time to reflect on your prior behaviors with money. It is worth considering how your relationships and lifestyle may have been causing you to use money in an irresponsible or irrational way. Even if your bankruptcy was not due to your behaviors, it will be important to examine the events leading up to it.

Clear Up Remaining Debts

While it is often said that Chapter 7 bankruptcy leaves the debtor with a clean slate, some debts will remain after filing. With the overall weight of debt reduced, you should focus on taking care of whatever debts are left, such as alimony, attorney’s fees, or child support.

Consider a Credit Card

They key word here is “consider.” If you’re not going to be making purchases like booking flights, then maybe it is not the right time for you to get back into credit spending.

You will likely have difficulty getting a credit card anyway, so the best option is to seek a secured credit card. These are secured by an amount that you will be expected to pay up front, and the credit limit will be only a percentage of your payment. These cards typically have lower limits than what you might receive from an unsecured card, but they will allow you to start rebuilding your credit. Be sure that whoever issues the card is reporting your credit to a credit agency.

Be aware that these cards will likely come with high interest rates, so it will be in your best interest to use them responsibly and to keep little to no balance.

Filing for Chapter 7 Bankruptcy with Groce & DeArmon, P.C.

While filing for bankruptcy can disrupt your life, it is often a good way to turn your financial life around, even if it means having to start over. Don’t go through the process alone – seek the help of a skilled and experienced bankruptcy lawyer. Groce & DeArmon, P.C. offers free consultations to help you plan your next move. Don’t let your debts pile higher, call Groce & DeArmon, P.C. today at 417-862-3706.

What Bankruptcy Protection Doesn’t Cover

April 19, 2017 By Shari DeArmon

Bankruptcy filing is a big step in the financial situation of any financial entity, whether personal or for a business. However, not all debt is discharged during a bankruptcy proceeding and you will not receive bankruptcy protection from all debts. It is important during the preparation period of a bankruptcy that you participate in full disclosure with your bankruptcy attorney so that you are not taken by surprise with nondischargeable debts at the end of the bankruptcy. Your bankruptcy lawyer can provide the best advice for your particular situation and can determine which of your debts are not covered by bankruptcy protection.

What Types of Debts are Nondischargeable in Bankruptcy?

Most unsecured debt – debt not guaranteed by a tangible asset, like a credit card – can be discharged as a result of a bankruptcy filing. However, some unsecured debt is categorized as “priority,” which mean it cannot be discharged and is not part of bankruptcy protection. This includes domestic support obligations (child or spousal support), income taxes and other government debts. Student loans, while not a “priority” unsecured debt, cannot be discharged unless there is evidence of a hardship like a disability preventing employment.

Full disclosure of your debt situation is imperative for a bankruptcy filing as failure to do so can result in an undisclosed debt becoming un-dischargeable and you will continue to be responsible for paying it. Fraudulent debt of any sort may also be non-dischargeable under certain conditions.

Debt items including property taxes, condominium fees and dues, pension or retirement fund loans, debts from violating securities regulations or laws, and debts from willful injury or as a result of a wrongful death are not dischargeable and do not qualify for bankruptcy protection.

While bankruptcy protection can provide an individual or business with financial relief and a ‘fresh start,’ it does not automatically provide complete relief from all debts that one may incur.

A Law Firm that Understands Bankruptcy Protection

Finding a reputable bankruptcy attorney can help you navigate the complex waters of bankruptcy to find a feasible solution to your financial challenges. Groce & DeArmon, P.C., one of southwest Missouri’s leading bankruptcy law firms, can provide you with the answers and guidance that will help make the best of a challenging situation. With over a decade of experience in bankruptcy law, Shari DeArmon and her bankruptcy attorney team are ready to assist you in managing your finances with a bankruptcy filing. Contact Groce & DeArmon, P.C., today for your free consultation!

Bankruptcy Lawyer Advice & Should I File for Bankruptcy?

December 21, 2016 By Shari DeArmon

When you’re in a situation where you feel like your debt has taken over your life, it may be time to file for bankruptcy. Bankruptcy has some negative connotations surrounding it, but it’s not necessarily a bad thing. Depending on your situation, bankruptcy could really help you out of a tough spot. Keep in mind, bankruptcy isn’t for everyone. In some circumstances, bankruptcy may not be the best option. In most cases, filing for bankruptcy is more of a last resort. If you’re confused as to what you should do, a consultation with a bankruptcy lawyer can help. Read on to learn more about what situations may warrant filing for bankruptcy and how a bankruptcy lawyer can help.

Look Through Your Debts

The first step to deciding whether or not to file for bankruptcy is to step back and take a look at your debts. Figure out what can and can’t be fixed by bankruptcy. Student loans, child support, tax debts, and other certain kinds of debt cannot be wiped clean by filing for bankruptcy. If you are unable to get rid of most of your debt with bankruptcy, you may be better off trying to figure out a plan with the creditors. After figuring out how much debt you owe, assess all of your assets. If your assets are less than your debt, you may have good reason to file for bankruptcy.

Figure Out How Safe Your Assets Are

Depending on if you’re filing for Chapter 7 or Chapter 13 bankruptcy, your home, and other property could be at risk for being taken. There are a number of factors that go into you keeping your home when filing for bankruptcy. Chapter 7 may clear up enough debt for you to make your mortgage payments, but if not, you could have your home taken away. If you file for Chapter 13 and you have a good, steady income, you’re likely to be able to work your mortgage payments into your plan for repayment. Keep in mind, when you first file for bankruptcy there will be an automatic stay in place to keep your things from being taken and to stop creditors from pursuing you, but this stay is temporary. You will need to have a plan in place in order to keep your things.

Contact a Bankruptcy Lawyer for More Information

Here at Groce & DeArmon, P.C. we can get you a bankruptcy lawyer who can work out the best case for you. When you work with a bankruptcy lawyer, they are able to give you your options and tell you which type of bankruptcy will work best for your unique situation. Being alone in your bankruptcy fight can be scary, and Groce & DeArmon, P.C. wants to make sure your rights are protected. Contact us today to set up a free consultation with a bankruptcy lawyer and to start getting your life back on track.

Navigation