Bankruptcy Attorney in Myrtle Beach, SC
If you are facing financial difficulties, you may consider filing for bankruptcy protection with the guidance of a bankruptcy attorney in Myrtle Beach, South Carolina. Specific guidelines were established through the 2005 Bankruptcy Act. The guidelines require anyone who files for bankruptcy protection in South Carolina to get credit counseling within the six months preceding the filing. After you have filed bankruptcy, you must attend and complete a financial management instructional course to help you avoid future financial problems.
Your expenses and your income will both be analyzed to see if you meet the qualifications to file a Chapter 7 bankruptcy or if you should file a Chapter 13 bankruptcy. The court will look at your average monthly income for the preceding six months and compare it to the median income in South Carolina to accurately do the means test. If you have an average monthly income that exceeds the state’s median income, the remainder of the means test will be applicable to determine which bankruptcy filing is appropriate for you.
Prior to filing your petition for bankruptcy in the South Carolina court, you must gather all the right paperwork and supporting evidence, which includes your sources of income in an itemized fashion, the last two years worth of major financial transactions, your average monthly living expenses, all debts that you owe and all real property – not just real estate, but also vehicles, collectibles, equipment, and anything of considerable value. You must also provide deeds for any real estate, loan paperwork, tax returns for the last two years, and vehicle titles.
How to Determine Exempt Property in a Myrtle Beach Bankruptcy?
Upon receiving all the documents, your Myrtle Beach bankruptcy attorney will help you determine which of your properties are exempt from being seized according to the South Carolina exemption rules. At that point, your bankruptcy attorney will file a two-page petition plus other forms in the South Carolina bankruptcy court for the Myrtle Beach district. Referred to as schedules, these documents show your financial transactions for the last two years and detail your current financial situation. If you aren’t honest or if you don’t provide accurate information, you could jeopardize your bankruptcy filing. In South Carolina, the cost of filing a Chapter 7 bankruptcy is $306, which cannot be waived but might be paid by installments. The Chapter 13 bankruptcy filing fee is $281, which is unable to be waived.
How Are Chapter 7 and Chapter 13 Bankruptcy Different?
Chapter 13 bankruptcy is a form of debt repayment. You submit a proposed repayment plan with your bankruptcy petition to the court. After all, your monthly expenses of a reasonable nature are paid, you must indicate how much money you have available to pay toward any of your other outstanding debts and how this money should be divided among your creditors. Priority claims, which are secured debts, such as mortgage payments, any taxes owed, and back child support, must be paid in full. Any unsecured debts, such as credit cards, medical bills, and unsecured loans are usually only partially paid.
While it can vary from one petitioner to another, unsecured debts might be paid at rates as low as 10 cents on the dollar. Any debt repayment plan must pass three tests – it is delivered in good faith; unsecured creditors will be paid at a rate equal to what they would receive in a Chapter 7 filing; and all of your disposable income is paid directly into your Chapter 13 plan for at least three years but as long as five years to meet the payment requirements to match the amount of unsecured debt payments that would be received through a Chapter 7 filing.
After you have filed your petition for Chapter 13 bankruptcy, you must begin making your regular monthly plan payments. More often than not, these monthly payments are automatically withdrawn from your paycheck. Your Myrtle Beach bankruptcy attorney will make the payment arrangements with the South Carolina bankruptcy court. After filing the petition, there will be an automatic stay in place which stops any creditors from contacting you directly or from filing a claim against your property as of the date of the filing or from that date forward. Any foreclosure proceedings are immediately stopped and the court will legally take control of your debts or any property that isn’t exempted.
A trustee will be appointed to your case by the court to make certain your creditors get as much pay as they possibly can. The trustee will carefully review all your paperwork looking at your exemptions and assets carefully. Any part of your case could be challenged by the trustee. The 341 Meeting is the first meeting of creditors, which takes about five minutes, and will require your attendance. If you have filed Chapter 13, only a creditor or two usually attends if there are questions. When there is a Chapter 7 filing, there are usually no creditors in attendance at this meeting. You will be sent a notice of the meeting, so you can make plans to attend.
A filing for Chapter 7 usually doesn’t involve any exempted property or assets. If you have any non-exempt assets when Chapter 7 is filed, this property is turned over to the trustee immediately after the meeting. If the property isn’t worth a significant amount or if it is challenging to sell, the trustee might abandon it, which means give it back to you. There is a 60-day time frame in which the trustee and the creditors can dispute the right for the debtor to have their bankruptcy discharged. If your case isn’t challenged, you should receive a notice from the court within three to six months saying all your dischargeable debts have been discharged. When filing a Chapter 13, you will attend a hearing where a bankruptcy judge will either deny or confirm your repayment plan. If confirmed and payments are made regularly and on time, any dischargeable debt balance will be eliminated when the plan ends three to five years later.
Chapter 7 bankruptcy is a kind of liquidation. You don’t pay into your plan or pay anything to your creditors for unsecured debts unless you have non-exempt assets that are sold. Federal statutes allow you to exempt as much as $21,625 for your primary residence and as much as $3,450 for a car. You also have the right for federal, state, and domestic support benefits. The court can sell any non-exempt assets and distribute any funds among the secured creditors. Any remaining debts are then discharged. You must pass an income eligibility test to file a Chapter 7 bankruptcy in South Carolina. If you want to avoid foreclosure proceedings on real estate, you must file a Chapter 13. Chapter 7 does postpone those proceedings, but the property is sold to satisfy the debt.
Alternatives to Filing for Bankruptcy in Myrtle Beach, SC
If you are hesitant about filing bankruptcy, South Carolina does offer some alternatives for those struggling financially. Before doing anything else, your first step should be to contact your creditors and ask them about working out a payment plan. You should explain your situation and ask them to set up a payment arrangement plan you can afford. Many creditors are willing to work with you in these situations.
Another option that might work is a debt consolidation loan. You will get one loan to pay off all your other debts so you will have only one payment each month. Another option that might benefit you is credit counseling. When you initiate a debt repayment plan with the help of a credit counselor, you might be able to get lower interest rates and lower monthly payments. You have to agree to stop using credit and not apply for additional so you don’t go deeper into debt until the plan is complete.
Will Filing for Bankruptcy Destroy My Credit Score?
If you realize bankruptcy is your best option, you don’t have to stress about your credit. While myths out there make you think your credit is ruined for at least 10 years, that is far from the truth. Filing bankruptcy can help you give your credit score a boost. Within two years of your bankruptcy discharge, you can improve your credit score to 700+. If you have a bad credit score because of past due payments, now is the time to take care of the problem and get your credit back on track.
Let our bankruptcy legal team assisting Myrtle Beach, SC, help you choose the right way for you to address your credit problems. Contact David Aylor Law Offices today.