April 6, 2020 | Chapter 13, Chapter 7, coronavirus, COVID-19, General, Omaha Bankruptcy Lawyer

The novel COVID-29 pandemic has created hard times for people around the world, including Nebraskans. The outbreak has resulted in business closures, furloughs, and even job cuts. Not having an income is putting a lot of people in the difficult place of considering bankruptcy, despite the government’s efforts to help through the stimulus package.

Bankruptcy is a set of federal laws and rules designed to help people and businesses who owe more debt than they can pay.

It is important to note that bankruptcy cases cannot be filed in state court. Federal courts have exclusive jurisdiction over bankruptcy cases.

Bankruptcy laws are meant to help people who can no longer pay their creditors get a fresh start by liquidating their assets to pay their debts, or by creating a repayment plan. The laws also protect troubled businesses and provide for orderly distributions to business creditors through reorganization or liquidation.

COVID-19, or coronavirus, has led to job losses, closed business, pay cuts, and more financial hardship for many. It’s a troubled time, as COVID-19 has not only created fear of getting sick, but worries about money, bills, and the future.

Some bankruptcy cases are filed to allow a debtor to reorganize and establish a plan to repay creditors, while other cases involve liquidation of the debtor’s property.

The vast majority of cases are filed under the three main chapters of the Bankruptcy Code, which are Chapter 7, Chapter 11, and Chapter 13.

A bankruptcy case normally begins by the debtor filing a petition with the bankruptcy court. A petition may be filed by an individual, by a married couple together, or by a corporation or other entity. The debtor is also required to file statements listing assets, income, liabilities, and the names and addresses of all creditors and how much they are owed.

The filing of the petition automatically prevents debt collection actions against the debtor and their property. This action is known as a “stay.” As long as the stay remains in effect, creditors cannot bring or continue lawsuits, make wage garnishments, or even make telephone calls demanding payment.

Creditors receive notice from the clerk of court that the debtor has filed a bankruptcy petition. Some bankruptcy cases are filed to allow a debtor to reorganize and establish a plan to repay creditors, while other cases involve liquidation of the debtor’s property. In many bankruptcy cases involving the consumer’s property liquidation, there is little or no money available from the estate to pay creditors. As a common result, the debtor is normally granted a discharge of most debts without objection. This means that the debtor will no longer be personally liable for repaying the debts.

In other cases, disputes may give rise to litigation in a bankruptcy case over such matters as who owns certain property, how it should be used, what the property is worth, how much is owed on a debt, whether the debtor should be discharged from certain debts, or how much money should be paid to lawyers, accountants, auctioneers, or other professionals.

Litigation in the bankruptcy court is conducted in much the same way that civil cases are handled in the district court. There may be discovery, pretrial proceedings, settlement efforts, and a trial.

Filing personal bankruptcy under Chapter 7 or Chapter 13 takes careful preparation and understanding of legal issues, so it is important to have the representation of a skilled bankruptcy lawyer on your side. Let the attorneys at High & Younes fight for you. Misunderstandings of the law or making mistakes in the process can affect your rights. Court employees and bankruptcy judges are prohibited by law from offering legal advice. Don’t try to navigate the complexities of bankruptcy law on your own. Contact the Nebraska legal team at High & Younes today: 402-933-3345.

The following is a list of ways our lawyers can help you with your case.

• Advise you on whether to file a bankruptcy petition.
• Advise you under which chapter to file.
• Advise you on whether your debts can be discharged.
• Advise you on whether or not you will be able to keep your home, car, or other property after you file.
• Advise you of the tax consequences of filing.
• Advise you on whether you should continue to pay creditors.
• Explain bankruptcy law and procedures to you.
• Assist with completing and filing forms.
• Assist you with most aspects of your bankruptcy case.

 What is Chapter 7 Bankruptcy?

 Filing Chapter 7 bankruptcy wipes out most of the debtor’s “unsecured debts” such as credit cards and medical bills without the need to pay back balances through a repayment plan. To qualify for Chapter 7 bankruptcy, you must meet income requirements. If you make too much money, you’ll have to file under Chapter 13 bankruptcy.

When you file for Chapter 7, a stay immediately stops most creditors from pursuing collection efforts. Also, a bankruptcy trustee is appointed to administer your case. In addition to reviewing your bankruptcy papers and supporting documents, the Chapter 7 trustee’s job is to sell your nonexempt property (property that you can’t protect with a bankruptcy exemption) to pay back your creditors. If you don’t have any nonexempt assets, your creditors receive nothing.

While Chapter 7 bankruptcy works well for low-income debtors with little or no assets, it can also work for filers whose discharged debt exceeds the value of the property sold.

Like other aspects of  the law, understanding how Chapter 7 works and what the best course of action may be stressful and confusing. This is why it is so important to have an experienced attorney who specializes in bankruptcy law in your corner. The team of Nebraska law firm High & Younes are here to help you navigate the complexities of filing bankruptcy. We can help you. Call us today at 403-933-3345.

What is Chapter 13 Bankruptcy?

Chapter 13 is a “reorganization” bankruptcy designed for debtors with regular income who have enough left over each month to pay back at least a portion of what they owe through a repayment plan. Many debtors choose to file for Chapter 13 bankruptcy because it offers several benefits not available in Chapter 7 (such as the ability to catch up on missed mortgage payments or strip unsecured liens from your house).

In Chapter 13 bankruptcy, you get to keep all of your property. In exchange, you pay back all or a portion of your debts through a repayment plan, depending on your income, expenses, and type of debt.

Chapter 13 bankruptcy is for debtors who:

• Don’t qualify for Chapter 7 but need debt relief. This may be to lower credit card payments, stop litigation, or prevent a wage garnishment, or
• have non-dischargeable debts such as spousal or child support that they’d like to pay off over three to five years, or
• have fallen behind on a house or car payment and want to get caught up on missed payments and keep the property or vehicle.

Filing the petition under Chapter 13 will stay most collection actions against the debtor or the debtor’s property. However, filing the petition does not, stay certain types of actions listed under federal bankruptcy law, and the stay may be effective only for a short time in some situations.

The coronavirus pandemic has led to uncertain and scary times for Nebraskans and businesses alike. If the emergency declarations and closures have ultimately led to financial strain, don’t go through it alone. At High & Younes, our philosophy is simple: We get our clients the best results by working smart, communicating effectively, and maintaining integrity. This philosophy has earned us the respect and trust of judges and other lawyers alike. We take the time to listen to our clients and make the effort necessary to get them the results they need.

Call us today at 402-933-3345.

About Our Bankruptcy Team 

Wesley H. Bain, Jr. was born in Goldsboro, North Carolina, the son of a schoolteacher and future lieutenant colonel in the United States Air Force. After leaving Goldsboro, Wesley’s family spent years stationed at military bases in New York, Louisiana, Virginia, and Nebraska.

Wesley graduated from The Pennsylvania State University in 2004 with a bachelor’s degree in English. He earned his law degree in 2007 from Case Western Reserve University School of Law. Since then, Wesley has practiced extensively in the field of bankruptcy law and creditor-debtor rights. He represents Chapter 7 and Chapter 13 debtors in individual, joint, and small business bankruptcy cases. Wesley has successfully negotiated and settled dozens of breach of contract matters, which has saved his clients incalculable time, money, and resources that would otherwise have been spent on litigation. His steadfast work ethic and commitment to his clients continues in his role at High & Younes.

Wesley is admitted to both federal and state courts in Nebraska and Iowa. He is a member of the bar associations in both states. In addition to practicing law, Wesley has taught legal courses at both College of St. Mary’s and Metro Community College.

For Wesley, communicating, asking questions, and sharing information is the foundation of strong client relationships as well as client satisfaction. Outside the law office, Wesley loves to spend time with his family, including coaching his daughter and stepdaughter in soccer, basketball, boxing, and other sports. He and his wife enjoy playing card games with friends.  Email him at wesley@hyattorneys.com.

COVID-19, Job Loss, and Bankruptcy