Debtor Rights When Filing for Bankruptcy in District of Columbia
Filing for bankruptcy protection can offer much-needed relief when you’re facing a difficult financial situation. You have certain rights as a debtor, especially while your bankruptcy claim is in progress. At Activist Legal LLP, we are passionate about asserting your rights when filing for Chapter 7 or Chapter 13 bankruptcy, keeping you informed of your options at all points in the process.
The automatic stay offers protection
Once you file for bankruptcy protection, a court will issue an automatic stay. This stay prohibits any of your creditors from pursuing the debt owed to them until you reach a resolution in your case. Therefore, you should be free from any phone calls or other forms of contact from your creditors or debt collection agencies—at least temporarily. This can provide a great deal of relief after you’ve experienced the constant pressure of creditors seeking payment from you.
If you have a received an automatic stay and creditors continue to harass you, speak with an attorney right away. You may even be able to take legal action against those parties, as they could be violation of state or federal law.
Chapter 7 versus Chapter 13 bankruptcy
There are two main forms of consumer bankruptcy: Chapter 7 and Chapter 13. In a Chapter 7 bankruptcy, you may seek the discharge of all or most of your debts. The court assigns you a bankruptcy trustee, who may liquidate any nonexempt remaining assets to help pay back your creditors.
Before you can move ahead with Chapter 7, you will need to pass a “means test,” which determines if you qualify based on your current income and assets. Failing the means test will leave you unable to file for Chapter 7—and you’ll likely need to explore Chapter 13 instead.
The process of a Chapter 13 bankruptcy is somewhat different. Rather than having your debts mostly discharged, you will need to develop a repayment plan, working with your creditors. Secured debts (such as mortgage and vehicle loans) take precedence, followed by unsecured loans like credit cards.
Common questions on debtor rights
At Activist Legal, our clients have a number of common questions regarding their rights in a bankruptcy. Below are a few of those questions and some answers you may find helpful:
Will you be able to keep your home in a bankruptcy?
In most situations, you will be able to keep your home, especially if you have built up substantial equity in the property. Chapter 13 tends to offer more assurance of this, as the Chapter 7 process may leave a significant portion of your assets up for liquidation or sale.
Can you keep a bankruptcy private?
Technically, all bankruptcy filings are part of public record. However, it is usually difficult for parties to find out if someone has filed for bankruptcy unless they run a credit check. Bankruptcies do remain on filers’ credit records for 10 years.
Why should you work with a bankruptcy attorney?
An experienced bankruptcy lawyer has in-depth knowledge of state and federal law—and especially your rights as a debtor. Your attorney will advocate for your best interests at every turn, while preventing creditors from harassing you during what is already a difficult period in your life. It’s also helpful to have a lawyer by your side during the means test and at the meeting of creditors.
Consult a dedicated Washington bankruptcy lawyer
To learn more about your rights and the process of filing for bankruptcy, speak with a skilled Washington attorney at Activist Legal LLP. We serve the needs of individuals throughout District of Columbia. Give us a call at (202) 869-0804 to set up an initial consultation.