BANKRUPTCY

Attorney Paul P. Rivera focuses on consumer bankruptcy issues, primarily Chapter 7 (liquidation) and Chapter 13 (repayment plans). He reviews with the client the circumstances that led to considering filing a bankruptcy petition. Although filing for protection has lost much of its stigma over the last several years, it is still an extremely serious step with major long-term consequences and should be considered only as a last resort. If in his professional opinion, he does not believe that filing for protection under the bankruptcy laws is the right thing for you, he will tell you so, tell you why, and offer practical alternatives.

The decision to file for protection from creditors under federal bankruptcy laws can be a traumatic one, preceded by months or years of economic (and accompanying emotional) distress. The factors leading up to this decision are as varied as the people who find themselves forced to make it. Loss of a job (or two), catastrophic illness and the accompanying high medical bills, or spending in anticipation of a promotion or a job that didn’t materialize are among the reasons people find themselves unable to meet their monthly financial commitments.

A couple things you should know about the bankruptcy process:

• It gives you a fresh start without starting from scratch. You come out of the proceedings debt-free. Most people who file under Chapter 7 don’t have to sell (liquidate) any of their possessions. You might surrender to a creditor something that you are still paying for but cannot afford to keep, such as a car or a house with little or no or negative equity. The corresponding benefit is that you don’t have to make any more payments.
• The moment your petition is filed with the Bankruptcy Court, creditors are stopped in their tracks. This is the effect of the “automatic stay of proceedings.” Creditors can’t call you, they can’t write you, they can’t sue you. If they’ve already started legal proceedings, those proceedings stop. If they’ve sued you and won, they cannot collect or levy or execute on a judgment. Everything remains frozen in place until the court acts on your petition, usually about 90 days later, discharging your debts.