If your financial situation has become completely untenable, filing for bankruptcy may be a useful course of action to consider. However, bankruptcy is a complex process, so it is worth discussing the advantages and disadvantages with a knowledgeable attorney before committing to this path.
To determine the right solution for your unique situation, speak with a Wilmington bankruptcy lawyer at Doroshow, Pasquale, Krawitz, and Bhaya. In a confidential consultation, an attorney can explain your financial options and help you reach a positive resolution. The first consultation is free.
Choosing the Right Chapter to File for Bankruptcy
For those considering bankruptcy, one of the most important decisions is which Chapter of the federal Bankruptcy Code would be best to file under. While there are a few rare exceptions, the vast majority of individuals who choose to declare bankruptcy file under either Chapter 7 or Chapter 13.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy involves a debtor giving all their non-exempt assets to a trustee, who then liquidates those assets and uses the profits from the sale to pay down unsecured debts. These debts are ones that do not have real property, like a house or a car, secured as collateral.
Once this process concludes, most of the debtor’s unsecured debts are “discharged,” meaning the debtor is no longer obligated to pay them. However, debtors must have a low enough income to pass a “means test” in order to qualify for Chapter 7 bankruptcy. A Wilmington bankruptcy attorney can help assess a person’s eligibility for bankruptcy under Chapter 7.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy revolves around the construction of a repayment plan, which allows a debtor to restructure certain debts and pay them off over a period of three to five years. If a debtor successfully completes their repayment plan, their remaining unsecured debts may be discharged, and they may be allowed to keep property associated with paid-off secured debts.
Bankruptcy Exemptions for Wilmington Residents
Since the State of Delaware has chosen to “opt out” of the bankruptcy exemptions established under federal law, individuals in Wilmington who choose to file for bankruptcy can only use the exemptions established under state law. Some of the most common exemptions that our local bankruptcy attorneys help debtors take advantage of include:
- Up to $125,000 of equity in property used as the debtor’s principal residence
- Up to $15,000 of equity in motor vehicle equity
- Personal property up to $25,000 value
- Certain retirement, pension, and life insurance benefits
- Unemployment and/or workers’ compensation benefits
Get Help from a Wilmington Bankruptcy Attorney
Bankruptcy can be a crucial and essential means for people struggling with their finances to get out of debt and make a fresh start with their lives. However, there are also significant consequences that can come from declaring bankruptcy, as well as numerous procedural requirements to successfully utilize this option for debt relief.
Filing on your own can result in disaster in your case. You should strongly consider seeking advice from a knowledgeable Wilmington bankruptcy lawyer. Call today to set up a free consultation with the knowledgeable legal team at Doroshow, Pasquale, Krawitz, and Bhaya.