Chapter 7 and Chapter 13
If you have a large amount of unsecured debt, bankruptcy may be a good option for you. The purpose of bankruptcy is to give people a clean slate going forward. If you are buried under an insurmountable amount of debt, bankruptcy can give you a way to clear all of your debt and move on with your life. An added bonus is that filing for bankruptcy means that debt collectors have to stop calling you. If you're at your wits end with collection calls, bankruptcy can give you much-needed relief.
If you have cold feet regarding filing for bankruptcy, consider this - if your creditors (banks, credit cards, etc.) owed more money than they could ever pay and would benefit financially from a bankruptcy filing, do you think they would hesitate to file for bankruptcy? The system exists for a reason - to help you get a fresh start.
If you think bankruptcy can help you, or are curious whether you should file, I can help you consider your options.
Adversary proceedings in bankruptcy court are generally litigated cases that are attached to an already existing bankruptcy filing. A creditor can file an adversary proceeding by paying the required fee and filing a Petition. A debtor can file an adversary proceeding without paying a fee. There are a number of reasons why you might consider an adversary proceeding, including:
- Determining whether liens are valid;
- Recovering property from the bankruptcy estate;
- Contest the debtors bankruptcy or attempt to revoke a discharge;
- Revoke a confirmed Chapter 13 plan;
- Attempt to have student loans discharged in a bankruptcy proceeding;
- Determine generally the dischargeability of a debt.
Adversary proceedings are very similar to standard litigation. There will be discovery, depositions, motions, and potentially a trial.
Contested Matters within a bankruptcy
There are also a variety of contested matters that can come up during a regular bankruptcy that do not involve any outside litigation. These types of contested matters are typically handled with motions and hearings. A few instances where a contested matter might arise are:
- Motions to dismiss a Chapter 7 case;
- Motions to dismiss a Chapter 13 case;
- Relief from stay motions, specifically where a creditor wants to foreclose on a home that is secured by a mortgage;
- Motions used for recovering or protecting certain property.
Bankruptcy & Student Loans
Discharging a student loan in a Chapter 7 or Chapter 13 bankruptcy case is very difficult. In order to be successful, you have to show that repaying the loan will cause "undue hardship." This is a difficult burden to meet. That said, if you are buried in student loans and have other issues that are preventing you from working, you may be able to secure a discharge. If you're interested, you should talk to an attorney who knows student loan law.