Mandatory Disclosures

U.S. bankruptcy law requires all bankruptcy attorneys to provide consumers with certain disclosures, even if they do not decide to file for bankruptcy. At Vegas BK in Las Vegas, we believe it is important for our clients to understand these mandatory disclosures.

Types of Bankruptcy Available

It’s important to understand that there are several forms of bankruptcy available as a legal form of debt relief. There are four chapters of the Bankruptcy Code, although most people usually only require Chapter 7 or Chapter 13.

Chapter 7 bankruptcy, also known as liquidation, can discharge unsecured debt like medical and credit card debt. Under Chapter 7, a trustee takes over the debtor’s assets and liquidates them into cash to distribute to creditors, although there are many forms of property that are exempt from liquidation. The vast majority of Chapter 7 cases are “no asset” cases in which the debtor does not lose the property. Chapter 7 requires meeting a “means test.” If your income exceeds the median income in Nevada for a household of your size, even after allowed exemptions, you cannot qualify for Chapter 7.

Chapter 13 bankruptcy, also known as reorganization, creates a structured repayment plan to repay a portion of your debts over 3-5 years. To qualify for Chapter 13, your secured and unsecured debts cannot exceed allowed dollar amounts. This form of bankruptcy may be used to save your home from foreclosure by catching up on past-due payments or strip a lien from a vehicle or a home.

Chapter 11 is mostly used to reorganize a business whereas Chapter 12 allows “family farmers” or “family fishermen”with regular income to repay some or all debts over a period of 3-5 years.

Credit Counseling Disclosure

Filing for bankruptcy requires completing two credit counseling courses; one course is completed before you file and the other is completed before your bankruptcy is discharged. Our law firm can refer you to a reputable counselor who has been approved by the Office of the United States Trustee. A list of approved credit counseling providers is also available at the bankruptcy clerk’s office and the U.S. Trustee Program’s website.

You Are Not Required to Hire an Attorney

You have the right to file for bankruptcy on your own without legal assistance. Along with representing yourself, you have the option of hiring a lawyer to represent you or seeking help from a non-attorney bankruptcy petition preparer.

The Bankruptcy Code requires any lawyer or bankruptcy petition preparer to give you a written contract that specifies what the lawyer or preparer will do for you and the total cost.

The attorney at Vegas BK can provide a more in-depth explanation of these mandatory disclosures and provide additional information during a consultation. Contact Vegas BK for a free consultation to discuss your case.