Gambrell & Stone, PLLC limits its practice to consumer fraud, personal injury, worker's compensation, social security disability claims, and bankruptcy. The links on the in the column to the left will lead you to information about our attorneys or to information about each of the areas which we handle. We have attempted to provide answers to frequently asked questions in each of these areas and links to other sites which can provide information about bankruptcy and social security. However, if you have a question that is not answered, please feel free to contact us by phone, mail or our message center. Before reviewing the information contained herein or using our message center, please read the disclaimer concerning information on this site and email transmissions.
The links in the column to the left will lead you to information about our attorneys or to information about each of the areas which we handle. We have attempted to provide answers to frequently asked questions in each of these areas and links to other sites which can provide information about bankruptcy and social security. However, if you have a question that is not answered, please feel free to contact us by phone, mail or email. Before reviewing the information contained herein or using email, please read the disclaimer concerning information on this site and email transmissions. For FAQs in the area of bankruptcy, see below:
Robert Gambrell and Jon Thornburg are the attorneys in the firm that handle bankruptcy for Gambrell and Stone, PLLC. The firm represents consumer and business debtors in Chapter 7, Chapter 13, and Chapter 11 cases. Over the past several years the breakdown of the bankruptcy petitions filed by Gambrell & Stone, PLLC has been 60% chapter 7 filings and 40% chapter 13s.
Our firm provides an initial consultation at no charge which usually takes approximately thirty minutes to an hour. In this conference we explain how the bankruptcy laws apply in that clients particular case. We also look to see if there is another option for our clients such as consolidation of their loans through a bank or by using the services of a credit counseling agency that can assist some debtors who's financial picture has not reached the point where bankruptcy is necessary.
By the time we've been contacted, most people have no other option than to file for relief under the Bankruptcy Code. Since most clients who need to file bankruptcy do not have the capability to pay our fees up front, we will work with our clients with monthly payments in most cases. When a chapter 13 is filed we will place most of the fee in the plan.
For address, telephone, fax number or e-mail, see our main page.
Frequently Asked Questions.
To assist you in understanding the bankruptcy process we have tried to answer some Frequently Asked Questions below. Also there are a few links with other information about bankruptcy at end of this page. Those FAQs are:
What is the difference between filing bankruptcy under Chapter 7, under Chapter 13, and under Chapter 11 of the Bankruptcy Code?
Chapter 7:
This is a liquidation bankruptcy, sometimes called "straight bankruptcy". The principle advantage is that the debtor comes out without any future obligations on his discharged debts. However, bankruptcy does not wipe out most mortgages or liens. If a debtor wants to keep an item (Ex: house or car) which is security for a loan, he must continue these payments. If the debtor wants to discharge that car loan, then he must surrender the car to the creditor.
A chapter 7 debtor is seeking a discharge of his obligations to pay his debts. However, bankruptcy does not discharge most taxes, most school loans and some other debts. The ability to discharge such debts as taxes and school loans depends upon the age of the loan and numerous other factors. Thus, a complete review of each client's debts must be made to determine what debts, if any, will remain after discharge.
Chapter 13:
In a Chapter 13 proceeding, the debtor must pay all or part of his debts from the future income over a period of three to five years through his chapter 13 plan. If the court approves the plan of payment, the debts will be paid in full or partially by the chapter 13 trustee. However, most long term debt and home mortgages must be paid outside the plan. The plan can be approved, if it proposes to pay the debtor's disposable income over the life of the plan, even if the creditors do not agree with the plan. In most cases, the plan payment will be less than the combined payments of the debts prior to filing, and the debtor can retain all of his assets provided he makes the payments as required and maintains insurance on items, such as his home and car which are security for loans being paid through or outside of the plan.
Chapter 11:
Chapter 11 is the chapter used by lage businesses to reorganize their debts and continue operating. Corporations, partnerships, and limited liability companies cannot use chapter 13 to reorganize and must cease business operations if a chapter 7 bankruptcy is filed. Chapter 11 cases are by far the most complete of bankrupcty cases, and as a result, there are very few law firms that handle chapter 11 cases, but many times individuals and companies cannot obtain the relief they need under chapter 7 or chapter 13. back to FAQ
What about my Credit Rating?
A bankruptcy filing is noted by various credit reporting companies. Federal law limits the length of time that this information may be carried on a report to ten (10) years. A bankruptcy shown on a credit report will adversely effect one's credit. However, many of our clients have found that after filing bankruptcy, they can reestablish their credit over a reasonable period of time by promptly making the payments that they are left with, such as their car, house, or rent payments. This and most of your other questions about bankruptcy can be answered in an appointment with one of our attorneys at no charge. back to FAQ
Can I borrow money to buy a car or house after my bankruptcy case is completed?
Many clients come into our office with the belief that if they file bankruptcy; then they cannot obtain any credit for seven (7) years. Actually, your ability to obtain credit at any time is normally based upon three (3) factors. Those factors are (1) your ability to repay the loan, (2) the creditor's collateral position, and (3) your credit history. If you have filed a bankruptcy, then your credit history is clearly poor. This, however, does not mean that you cannot obtain credit. Individuals that show the creditor that they now have the ability to repay a loan can in many cases obtain the credit necessary to purchase a car. FHA and VA regulations provide that a person or persons can borrow funds to purchase a home provided that the discharge completing the bankruptcy occurred at least two years prior to approval of the loan and the borrower(s) meet the remaining necessary guidelines to borrow the funds to purchase a home. back to FAQ
What to expect in a Chapter 13 Bankruptcy.
Chapter 13 Bankruptcy is often referred to as a "wage earner plan" or a "debt repayment plan".
In Chapter 13 Bankruptcy, the debtor files a "Chapter 13 Plan" with the bankruptcy court agreeing to make the best effort to pay off as much debt as possible over a three to five year period of time. The plan will classify debts in different categories such as secured and unsecured debts. Some debts, such as taxes and secured debts may be paid in full while others may only be paid a portion of the amount owed.
The debtor makes a monthly payment to a bankruptcy trustee determined by monthly take-home pay less monthly living expenses. (For example, the debtor's after tax income is $2,200 per month, and the family's living expenses are $1,900 per month [this amount does not include debts that will be paid through the plan such as car notes], the payment to the trustee will be $300 per month.) As mentioned above, the trustee will first pay priority debts (such as taxes & back due child support) together with the secured debts. From the funds left over after payment of secured and priority debts, the trustee will pay the unsecured creditors pro-rata. Most unsecured debts remaining at the end of the case are discharged. One exception is the remaining portion owed on governmentally insured student loans will not be discharged in most cases. back to FAQ
What Are The Advantages Of Chapter 13 Bankruptcy?
Chapter 13, in some circumstances, can offer significant advantages over. The main advantages are:
What Are The Disadvantages Of Chapter 13 Bankruptcy?
While Chapter 13 can offer some real advantages to a debtor, there are significant disadvantages as well:
What to expect in a Chapter 7 Bankruptcy.
Chapter 7 Bankruptcy is often referred to as a "straight" bankruptcy or a "liquidation". In Chapter 7, most of the debtor's property or assets are protected by law (See explanation of exempt assets below). In rare cases, the bankruptcy trustee will take the unprotected or non-exempt assets and sell them to use the funds to distribute pro-rata among the unsecured creditors. In Mississippi, very few debtors in Chapter 7 are required to turn over any property to the trustee. On secured debts, the debtor either reaffirms the debt (continues to make payments), surrenders the property back to the creditor, or redeems the property (making a lump sum payment equivalent to the value of the merchandise). back to FAQ
What can I keep if I file Bankruptcy under Chapter 7?
State and federal laws provide what are called "exemptions" and Mississippi has opted to not allow a debtor to claim federal exemptions. An exempt asset is determined by our state law and allows a debtor to keep certain property up to a particular dollar value. Certain categories of assets such as money in bank accounts, stock, tax refunds and real property other than the debtor's home are assets which are considered "non-exempt assets.” In other words, exempt items are protected, which allows the debtor(s) to retain them and non-exempt items are not protected and can be taken by the trustee to be sold and/or converted to cash for distribution to the unsecured creditors in a chapter 7 bankruptcy proceeding
If the non-exempt (non protected) assets have a high enough value to provide for payment of the trustee's fees and expenses and have money remaining to distribute to the unsecured creditors, the trustee will take these non-exempt assets, liquidate them to cash, and distribute those assets pro-rata to the unsecured creditors. Although there is no magic dollar figure, the trustee rarely liquidates any assets unless he can receive at least $1,500.00, after any expenses, from the sale of the non-exempt assets. To avoid liquidation, a debtor can choose to file a chapter 13 or chapter 11 reorganization, which are explained in these FAQs.
The Exemptions in Mississippi consist primarily of the following items:
Although there are a few other items which may be exempted under the Mississippi Code, most people filing bankruptcy do not own or hold any exempt assets other than those listed above. The most common non-exempt assets that the bankruptcy trustee liquidates in chapter 7 proceedings are real property other than one's homestead, debts owed to the debtors such as pending tax refunds, personal injury claims or other potential claims or lawsuits in which the debtor holds an interest, and interest in estates. back to FAQ
What Happens to Collateral on My Secured Debts in Chapter 7?
A debtor has four options on secured debts, where the creditor is holding collateral to enforce the payment of the debt. The most common examples of secured debts are home mortgage loans, automobile purchase loans, seller's or vendor's liens retained at the time of purchase by retailers such as Sears or jewelry stores, loans by finance companies taking such items as vcrs, stereos as collateral.
First, the debtor can reaffirm the debt, meaning that the debtor agrees to keep making payments as if there had never been a bankruptcy filing. On most auto loans and house mortgages, the creditor will require that the entire loan be reaffirmed, the loan be current and that the regular monthly payment be maintained. Most loans secured by household goods (if valid) can be renegotiated, reducing the balance and the monthly payment.
If a debt is reaffirmed in either manner, the debtor is then entitled to retain the property. Failure to make payments following the reaffirmation of a debt can result in a repossession of the item(s) and collection of the deficiency after the sale.
Second, the debtor can "redeem" the collateral by making a one-time lump sum payment equivalent to the value of consumer goods. For example, if a debtor owes $10,500 on a car and it is only worth $6,000, the debtor can obtain clear title to the car by paying the creditor $6,000. Obviously, most debtors cannot use redemption as a method to retain the collateral.
Third, the debtor can surrender the collateral back to the creditor. The entire debt will then be discharged, and the creditor cannot collect a deficiency balance following the sale of the item.
Fourth, in some instances, a debtor may avoid the lien, retain the collateral and discharge the debt. If a creditor such as a finance company has a non-purchase money lien on household goods such as a microwave, lawn mower or furniture, the debtor can avoid the lien pursuant to 522(f) of the bankruptcy code. To do this the item must be exempt (See explanation of exemptions in Mississippi). Since most electronic equipment, sports equipment and firearms are not exempt in our state, this section cannot be used to avoid liens on these items. back to FAQ
Do I Have To Appear In Court?
In both Chapter 7 and Chapter 13 cases, each debtor must attend a "meeting of creditors". The name implies that all the creditors will attend that meeting. However, only a few of the secured creditors normally attend. The meeting usually takes between two and five minutes in the Hattiesburg Division and the Southern Division (Biloxi). At the hearing, the trustee will ask the debtor some basic questions about information in the schedules (papers filed with the bankruptcy petition). In a Chapter 7, the trustee will ask about the debtor's desire to retain the items which are collateral for the secured loans. In a Chapter 13, the trustee will review the Chapter 13 Plan and determine if payments have been made pursuant to the plan. Secured creditors that attend may inquire as to insurance on the collateral, how they are being treated in the chapter 13 plan or whether or not the collateral will be surrendered in a chapter 7. back to FAQ
When Will I Receive A Discharge Of Debts?
As a general rule, most unsecured debts will be discharged in a chapter 7 and the portion which was not paid pursuant to the chapter 13 plan will be discharged in a chapter 13. An unsecured debt is a debt where the creditor is not holding any collateral or security to enforce payment of the debt. The most common examples of unsecured debts are credit cards/credit lines, medical bills, and utility bills.
About 3 months after the Chapter 7 meeting of creditors, each debtor will receive a notice in the mail indicating that their debts have been discharged. This discharge, however, will not include secured debts to be reaffirmed, and any non-dischargeable debts (See Above). If a creditor objects to discharge of a debt or other litigation is filed, the discharge may be delayed.
In a Chapter 13 the case is audited after receipt of the final plan payment to ensure that it has been properly administered. Afterwards, the trustee sends a notice to the bankruptcy court, which in turn mails a discharge notice to all creditors and the debtor. This usually occurs about 3 months after the last payment is made. back to FAQ
>Links:
National Association of Consumer Bankruptcy Attorneys: This site provides information about the organization and provides copies of pending legislation before Congress. Some of this legislation will change the laws in favor of certain creditors.
American Bankruptcy Institute: This site has numerous sections which may be of interest, including Today's Headlines, Consumer Center, Bankruptcy Library, and Legislative News, among others.
United States Bankruptcy Code: Cornell University has this site set up with a copy of the Bankruptcy Code, section by section. The Bankruptcy Code is similar to a giant jigsaw puzzle since each section refers to several other sections. When reviewing any provision in the Code, it is important to remember that section 101 defines many of the terms used therein and section 102 gives the reader certain rules of construction to follow.
Findlaw Internet Resources Bankruptcy Sources: An excellent source of bankruptcy links.
back to FAQ