Delaware Bankruptcy Information
Understand the differences of Chapter 7 and Chapter 13 bankruptcy and find how filing bankruptcy with a lawyer in Delaware is easier.
Filing Chapter 7 Bankruptcy in Delaware
The first step of Chapter 7 Bankruptcy is contacting a Delaware Bankruptcy Attorney who will file all of the bankruptcy forms (petitions, schedules, Statement of Financial Affairs). After the bankruptcy petition has been filed, an automatic stay will temporarily halt all debt collection efforts. A judge may reinstate collection efforts if he determines there is \"cause\". A trustee is assigned to your case to sell your assets and use the proceeds to repay your debt obligations. All debts are paid in the priority outlined under federal bankruptcy law.
Efforts were made under the Bankruptcy Abuse Prevention and Consumer Act (BAPCPA) of 2005 to change bankruptcy laws to encourage more individuals to file Chapter 13 Bankruptcy and if they were able, to repay most or all of their debt. Changes to bankruptcy laws under the BAPCPA included:
1. Individuals must take an income test to determine if they can file Chapter 13 Bankruptcy or Chapter 7 Bankruptcy.
2. Individuals make take a certified credit counseling course prior to filing Bankruptcy.
3. Individuals must pass a financial management course before their debts will be eliminated.
The most significant addition to the bankruptcy law is the use of an income test to decide if you can file Chapter 7 Bankruptcy. The income test will analyze your median income and compare it to comparable families with in your state to determine if you can file Chapter 7 Bankruptcy. If your median income is lower than other families in the state of Delaware, you may file Chapter 7 Bankruptcy. If your median income is higher than other Delaware families, you will have to complete more means testing.
Filing Chapter 13 Bankruptcy in Delaware
If your income is too high to file Chapter 7 Bankruptcy, or you have a home and other properties you do not want to liquidate, filing Chapter 13 Bankruptcy may be another option for you. Chapter 13 Bankruptcy will not immediately discharge your debts but it may allow you to: stop home foreclosure, end repossession, stop certain wage garnishments and allow you to restructure your debt payments. Your debt can be restructured under a 3 to 5 year repayment schedule and if you complete all of your debt payments, your debt will be discharged at the end of the plan.
If you are considering filing Chapter 13 Bankruptcy, you can contact a Delaware Bankruptcy Attorney who will be able to file all the necessary bankruptcy paperwork, answer your questions and argue your case in bankruptcy court. Your bankruptcy lawyer will also help you develop your bankruptcy repayment plan. A trustee will be in charge of managing your plan and ensuring all of your creditors are paid in accordance to the plan. If you are under Chapter 13 Bankruptcy protection, it is illegal for creditors to harass you for credit payments. There may be exceptions for non-dischargeable debt which is not part of the plan.
Certain assets called exemptions will not be part of the bankruptcy plan and can not be sold to repay your creditors. The federal government created these exemptions to allow you to start over after filing bankruptcy. These exemptions are defined under federal bankruptcy law, but some states have developed their own bankruptcy exemption lists. In many states you will have a choice to use either the state bankruptcy exemption list or the federal bankruptcy exemption list. Other states will only allow you to use the state bankruptcy exemption list.
In the State of Delaware you may not choose the federal bankruptcy exemptions, but must use the state of Delaware Bankruptcy Exemptions.
More Help on Delaware Bankruptcy Information
- Bankruptcy Petition - The bankruptcy petition is an official form filed by the person who wants to begin the Bankruptcy process. - read more
- Means Test - The means test, which is outlined in Section 707(b)(2) of the Bankruptcy Code, makes it more difficult for individuals to have their debts discharged through Chapter 7 Bankruptcy. - read more
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