New Hampshire Bankruptcy Laws: What are the Laws Regarding Bankruptcies in the State of New Hampshire
Bankruptcy is a state of mind. Many individuals undergoing financial hardship feel like they have failed in life. The first thing an individual filing for bankruptcy needs is confidence. Bankruptcy is a legal procedure initiated by an individual or a business who are unable to pay their debts. The debtors file a petition and ask to have their debts discharged or reorganized by the court.
New Hampshire bankruptcy laws
Regardless of the income or the profession, bankruptcy can affect anyone. Divorce, unemployment, medical emergencies, and expenses are some of the common issues that give rise to bankruptcy. Despite the stigma, bankruptcy is a resource for many New Hampshire residents to start fresh. The U.S. federal bankruptcy laws govern new Hampshire.
How to file bankruptcy in New Hampshire
Following are the steps to file for bankruptcy in New Hampshire.
- The first and the most challenging part of filing bankruptcy is filing a petition at the New Hampshire district bankruptcy court. The debtor or the appointed attorney has to file the petition. The petition has to include the debtor's assets, income, liability, current financial status and the contact details of all creditors and the amount owed. The petition has to be filed under chapter 7 or chapter 13 of the U.S. Bankruptcy Code, which is determined by ‘means test.'
- Once the petition is filed, the bankruptcy court imposes an ‘automatic stay' which prevents the creditors from taking any action against the debtor. The creditors receive a notice regarding the debtor's petition from the court. The creditors cannot make wage garnishments, bring or continue lawsuits, or even call the debtor demanding money, as long as the stay is in effect.
- The appointed trustee calls for a creditor's meeting wherein the financial condition of the debtor is expressed. In most cases, there is little or no money or property available to be liquidated. In such cases, the debtor is granted a discharge of most debts without objection.
- If any creditor raises an objection where there is property is involved, the creditors are given a certain amount of time to file for Advisory proceedings. The most common reason to file an advisory proceeding is fraud. The discharge of debt is delayed until the adversary proceeding process determines the outcome.
- The debtor is granted a discharge if the court finds that there is no reason not to.
Bankruptcy means test
Under the 2005 Bankruptcy Act, the debtor's income and expenses are analyzed to determine whether the individual falls under chapter 7 or chapter 13 bankruptcy. To apply the means test, the debtor's average income of 6 months before filing the petition is compared to the median income of the state of New Hampshire. If the debtor income is lower than the state income, the debtor is required to file under chapter 7 bankruptcy. If the debtor income is more than the state median income, the debtor has to file bankruptcy under chapter 13.
Chapter 7 bankruptcy
Under chapter 7 bankruptcy, a trustee is appointed who liquidates all assets which are not exempt. The proceeds of the liquidation are distributed to the creditors, the debtor to start fresh and a pat is taken by the trustee for the services rendered. Certain secured debts such as a car, home or furniture can be kept by signing a voluntary ‘Reaffirmation Agreement.' The debtor has to continue paying the debt for the secured asset.
Chapter 13 bankruptcy
The debtor proposes a 3 to 5 years repayment plan to the creditors and offers to repay the debt in full or in part with future income. A ‘Repayment Agreement’ is signed by the debtor. If the debtor does not cheat on the repayment agreement, the remaining dischargeable debt is released at the end of the plan. Chapter 13 bankruptcy is filed by those individuals who would want to keep their secured debts such as a car, home, furniture, and other valuables.
Chapter 11 Bankruptcy
Business organizations usually file Chapter 11 Bankruptcy. A petition filed under chapter 11 of the Bankruptcy Code in New Hampshire lets the business to reorganize its assets and liabilities, and settle or discharge its debts.
In New Hampshire, federal bankruptcy laws help individuals who have suffered a heavy loss to repay their debts. Individuals having financial issues can give a fresh beginning to their lives.