Financial hardship can take its toll on anyone at any time. Regardless of the circumstances that caused your financial struggles, filing for bankruptcy can offer you relief and a fresh start.
Filing for bankruptcy in Kansas City can discharge your debt and in some circumstances, make a strategic plan to repay your debts without harassment or threats.
Our bankruptcy lawyers at Kentner Wyatt are experts at the filing process, and are here to provide you with a comprehensive overview of what it means to file for bankruptcy in Kansas City.
The Bankruptcy Basics
When filing for bankruptcy, you should familiarize yourself with the types of bankruptcy for which you can file. The types of bankruptcy that you can file for are referred to by their chapter in the U.S. Bankruptcy Code.
For example, the most common types of bankruptcy filed by individuals are Chapter 7 and Chapter 13 bankruptcy, which we will break down in this blog.
A bankruptcy case normally begins when the debtor files a Petition with the bankruptcy court. Seeking legal assistance to file for bankruptcy will ensure that you have the support and advice you need to get the relief you are seeking.
The bankruptcy chapter that you choose will depend on the specifics of your situation. Let’s break them down:
How to fille Chapter 7 Bankruptcy in Kansas City
People file for bankruptcy to discharge their debts and get an honest, fresh start in life. Discharged debts have no liability to the debtor; they are gone forever. Filing for a Chapter 7 bankruptcy offers a discharge of debt for individuals.
However, the people of Kansas City should realize that filing a petition under Chapter 7 may result in loss of property, as Chapter 7 bankruptcy may involve a liquidation of the debtor’s nonexempt assets.
Each asset of a person’s property is considered either “exempt” or “nonexempt.” The Bankruptcy Code will allow the debtor to keep certain “exempt” property and a trustee may liquidate the debtor’s remaining assets. On of our bankruptcy lawyers at Kentner Wyatt can guide you through the process to ensure know your rights and keep your property protected from liquidation.
To complete the official bankruptcy forms that make up the Petition, Statement of Financial Affairs, and Schedules, the debtor must provide the following information:
- A list of all creditors, as well as the amount and nature of their claims.
- The source, amount, and frequency of the debtor’s income.
- A list of all the debtor’s property.
- A detailed list of the debtor’s monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.
- Prior two years of tax returns, Federal and State
- Credit counseling from a pre-approved provider
- Copy of identification
In addition to the Petition, the debtor must also file with the court:
- Schedules of assets and liabilities.
- A schedule of current income and expenditures.
- A statement of financial affairs.
- A schedule of executory contracts and unexpired leases.
- A statement of intention.
Individual debtors with primarily consumer debts have additional document filing requirements. Partnering with trusted law professionals like Kentner Wyatt can help you with the bankruptcy documentation process.
Filing a Petition under Chapter 7 “automatically stays” (stops) most collection actions against the debtor or the debtor’s property. If the stay is in effect, creditors generally cannot initiate or continue lawsuits or telephone calls demanding payments.
Between 21 and 40 days after the petition is filed, the case Trustee will hold a Meeting of Creditors. During this meeting, the Trustee puts the debtor under oath, and both the Trustee and creditors may ask questions regarding the debtor’s financial affairs and property.
In most cases, unless a party in interest files a Complaint objecting to the discharge, the bankruptcy court will issue a Discharge Order generally 90 days after the Petition is filed.
How to File for Chapter 13 Bankruptcy in Kansas City
A Chapter 13 bankruptcy, also called a wage earner’s plan, enables individuals with income above the median income to create a payment plan to repay all or part of their debts. These payments are made in installments to the person’s creditors over 3 to 5 years.
Chapter 13 offers Kansas City residents several advantages over liquidation under Chapter 7, including:
- Protecting home from foreclosure.
- Rescheduling secured debts and extending them, potentially lowering the payments.
- Protecting liable third parties, such as co-signers.
- Retaining nonexempt property by paying back the nonexempt equity in the Chapter 13.
Any individual is eligible for Chapter 13 relief if the individual’s unsecured debts are less than $394,725 and secured debts are less than $1,184,200.
When you file a Chapter 13 Petition, an impartial Trustee is appointed to administer the case. The Chapter 13 Trustee both evaluates the case and serves as the dispersing agent. They will collect the payment installments and distribute them to the creditors.
Just like Chapter 7, filing under Chapter 13 stops most collection actions against you or your property. Creditors cannot initiate, continue lawsuits, or even make telephone calls demanding payments.
Between 21 and 50 days after the debtor files the Chapter 13 Petition, the Chapter 13 Trustee will hold a Meeting of Creditors. Just as in a Chapter 7 case, both the Trustee and creditors may ask you questions during this meeting about your financial affairs and the repayment proposal.
Unless the court grants an extension, you must file a repayment plan with the petition or within 14 days after the petition is filed. Fixed payments are then made to the trustee on a regular basis, typically bi-weekly or monthly. The trustee then disperses the funds to the appropriate creditors.
Any problems are typically resolved either during or shortly after the creditors’ meeting. You can avoid problems and make the process as painless as possible by ensuring that your proposal and documentation is accurate and accounted for with the help of bankruptcy lawyers at Kentner Wyatt.
Get a Fresh Start with Kentner Wyatt
Worried about filing for bankruptcy in Kansas City? We’ve got you covered.
Kentner Wyatt is the trusted, legal support you can count on for a fresh start in life. Our goal is to facilitate your legal process so that it’s as efficient and easy as possible.
With our years of experience, our Kansas City lawyers can help you become debt free. Contact us today to request a free consultation.