Bankruptcy

Are you only paying the minimum amounts on your bills?
Are you using your credit cards to pay your utility bills or to buy groceries?
Are you withdrawing or borrowing money from your retirement account to pay your bills?
Are you unable to create a budget that will get you out of debt?
Have you been threatened with or in the process of a foreclosure or repossession?
Have you lost your job, been a party to a hefty divorce settlement or experienced an expensive illness?

If you answered “yes” to any of the above questions, you might consider looking into the relief offered by the Bankruptcy Code. Did you know that by declaring bankruptcy you can stop both foreclosure and repossession and even eliminate credit card and medical debt? Did you also know that Bankruptcy is provided for in the United States Constitution?

Filing Bankruptcy can be a scary thought, but many people don’t realize that the Federal Bankruptcy laws were created to help good people, and businesses, get a “fresh start” and pursue productive lives relieved from the stress of past financial difficulty. Bankruptcy can be an important alternative if you have more debt and stress than you can handle and contrary to popular belief, your name will not be posted in any newspaper or any other circulated publication informing the world that you filed bankruptcy. In most cases no one, other than your creditors, will ever know you filed.

If you’re like most people, you want to pay your bills. However, a major financial problem such as a significant decrease in income or loss of a job, divorce, family emergency, medical bills, or just plain bad luck can make that difficult, if not impossible. Everyone’s situation is different, and Bankruptcy is not always the solution, but under the right circumstances, and filed for the right reasons, a Bankruptcy may be the answer to your financial problems.

Your Options Under the Bankruptcy Code

The Bankruptcy Code is divided into chapters. A consumer debtor (as opposed to a business debtor), is most likely to file a Chapter 7, known as a “total liquidation” or “straight bankruptcy” or a Chapter 13, which involves a debt repayment plan. Business debtors will most likely file a Chapter 7 or a Chapter 11, referred to as “reorganization.”

Chapter 7

Chapter 7 is the part of the Federal Bankruptcy law designed for people suffering from financial difficulties who do not have the ability to repay their existing debts, such as credit cards, medical bills and payday loans. Chapter 7 can give you a fresh start by wiping out all your debts and allowing you to start over, debt free. In both Chapter 7 and Chapter 13, you will be able to keep most, if not all of your property and assets.

Chapter 13

Chapter 13 is for people who have a regular income but have gotten behind on bills and just can’t meet the payment demands of their creditors. We can create a plan to make payments on terms favorable to you, not your creditors. Chapter 13 can allow you to get caught up on back payments on your mortgage or car without losing your property. It can even help with money owed for child support, alimony or to the IRS.

Chapter 11

Chapter 11 is designed to help a business that wants to keep operating but needs to reorganize its debts in order stay operational. There are many different ways the bankruptcy code can help protect your business assets and minimize your liability to creditors.

Your Questions About Bankruptcy

Below you will find a number of Frequently Asked Questions and answers. Every case is different and what is best for one person may not be the best for the next. One of our experienced attorneys would be more than happy meet with you at no cost to evaluate your situation, answer your questions and help you determine the correct approach to solving your debt problems. Call our office today for your initial consultation and evaluation.

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Frequently Asked Questions

How Will Bankruptcy Affect my Credit?
Will I Ever be Able to Buy a House or Car After I File Bankruptcy?
Will I be Able to Get Credit After Bankruptcy?
If I am Married, Does my Spouse Have to File Bankruptcy?
Is Debt “Settlement” or “Consolidation” Better Than Filing Bankruptcy?
Will I Have to Go to Court?
Will Bankruptcy Discharge All my Debts?
Can I Discharge my Child Support or Spousal Maintenance in Bankruptcy?
Can I Discharge my Traffic Tickets and Other Government Fines in Bankruptcy?
Will Bankruptcy Help if I Already Have a Judgment Against Me?
Can I Keep my Car and/or my House if I File Bankruptcy?
Can I File for Bankruptcy if I am Not a U.S. Citizen?
Can I File for Bankruptcy More Than Once?
How Quickly Can I File Bankruptcy?
How Much Will it Cost?
How Can I Pay for my Bankruptcy?

How Will Bankruptcy Affect my Credit?

Bankruptcy will always reflect poorly on your credit report, and it will stay on your credit report for seven to ten years. However, by the time most people seek bankruptcy, their credit report has already suffered a number of negative marks. At that point, declaring bankruptcy can sometimes actually improve the credit report and score since, upon receiving your discharge, you are no longer legally liable for the discharged debts and they will no longer be reporting negatively.

Will I Ever be Able to Buy a House or Car After I File Bankruptcy?

Absolutely. There are a number of car finance companies that specialize in loans to individuals who recently filed bankruptcy amd many will finance a vehicle immediately after you receive your discharge. In fact, you will be eligible for most VA and FHA loans, as well as many conventional mortgages, two to five years after your discharge. Please understand, however, that you will still need to otherwise qualify for these loans and you will probably be charged higher interest than a person with good credit, but you will be given the opportunity to begin rebuilding a good credit rating and to get a fresh start.

Will I be Able to Get Credit After Bankruptcy?

Yes, you will be able to get credit after you file bankruptcy. Most people find that shortly after filing bankruptcy they receive MANY credit card offers which, if used properly, will help you rebuild your credit by providing positive reporting on your credit.

If I am Married, Does my Spouse Have to File Bankruptcy?

No. While a married couple has the right to file a joint bankruptcy, just because you are married doesn’t mean your spouse must file too. In many instances, the spouse has little debt and good credit. After speaking with you, our attorneys will advise you as to whether you should file jointly or for one spouse only. In most cases, a non-filing spouse’s credit will not reflect the bankruptcy of the filing spouse.

Is Debt “Settlement” or “Consolidation” Better Than Filing Bankruptcy?

Generally not. Most of these programs, over time, cost substantially more than a bankruptcy, most of them fail, and some are outright scams. They often take longer than a bankruptcy and can leave your credit scarred even after all the payments are made. Additionally, any amount “written off” by a creditor under this plan may have an obligation to report this amount to the IRS and you may end up owing taxes on the amount forgiven. Alternatively, the Internal Revenue Code contains special provisions which prohibit the IRS from taxing debtors for debts discharged through bankruptcy.

Will I Have to Go to Court?

Yes. All filers must attend a 341 hearing (the Meeting of Creditors) that occurs approximately 30 to 45 days after the case is filed. Your attorney will have prepared you for this meeting and will be there with you. It does not actually take place in a traditional “courtroom” and there is no judge present. The hearings normally are held in office building cubicles or meeting rooms at a hotel or conference center. In virtually all Chapter 7 cases this is the only appearance that you will attend and in many Chapter 13 cases there are no other appearances needed.

Will Bankruptcy Discharge All my Debts?

The answer to this question depends on the types of debts you have. Bankruptcy discharges your personal liability all dischargeable debts. There are a number of “non-dischargeable” types of debts that you will remain liable for after you bankruptcy. Additionally, even if your personal liability on a debt is discharged, if you fail to make payments on a secured debt, such as your house, car, or furniture, that creditor, though they cannot come after you personally, still has the right to repossess its collateral.

In Chapter 13, these secured debts can often be restructured or the past-due payments paid back through your Chapter 13 plan. Also, not ALL unsecured debts are dischargeable in bankruptcy. For example, many taxes, child or spousal support, most student loans, and restitution obligations are not dischargeable in any Chapter in bankruptcy, although they may be repaid through a Chapter 13 Plan.

In Chapter 7 bankruptcy, there are even more debts that are not dischargeable. When you come in for your consultation we will review these ‘problem’ debts and decide what Chapter will help you the most.

Can I Discharge my Child Support or Spousal Maintenance in Bankruptcy?

No, these debts are “non-dischargeable” and you will remain liable for these obligations after your discharge. However, in Chapter 13, past-due child support and spousal maintenance can be paid through your plan over 3 to 5 years and the code blocks the holder of the claim from garnishing your wages or taking any other collection activity to collect the past-due amounts during your case.

Can I Discharge my Traffic Tickets and Other Government Fines in Bankruptcy?

Generally, fees and fines owed to a governmental entity are non-dischargeable, e.g., taxes, fees for traffic violation, parking tickets, and criminal restitution.

Will Bankruptcy Help if I Already Have a Judgment Against Me?

In many cases, yes. How much it will help and what options you have will greatly depend on the type of judgment and what has been done with the judgment since the time it was taken. After your consultation with one of our attorneys, we will be able to more accurately advise you.

Can I Keep my Car and/or my House if I File Bankruptcy?

Yes. In a Chapter 7 case, if you are current on your car and/or your house and you want to keep them, your filing will indicate your intention to “reaffirm” the debt and you will sign and file a “reaffirmation agreement” stating that you want to keep the property and continue making payments.

A Chapter 13 case is very similar, however, it may be possible to reduce your car payments to a more affordable amount though your Chapter 13 Plan. This is because in some situations the interest rate can be lowered, and also the amount paid back can be either the current Blue Book value of the vehicle or the amount owed on the vehicle, whichever is lower. This is very helpful for someone who owes more on the car than it is worth (“upside-down”).

Can I File for Bankruptcy if I am Not a U.S. Citizen?

Yes. You must be a resident of the United States, but citizenship is not required. People holding Green Cards are also eligible to file bankruptcy. All persons filing bankruptcy must present a Social Security card at the 341 meeting. If you have lost your card, you should request a replacement card from the Social Security Administration as part of your bankruptcy preparation.

Can I File for Bankruptcy More Than Once?

Yes. The time period between filings depends on whether you received a discharge in the previous case or your case was dismissed prior to discharge. It also depends on the Chapter you previously filed and the Chapter you want to file, and on any special timelines the Court issued in an order of dismissal.

If you received a discharge in your prior Chapter 7 bankruptcy, you may file another Chapter 7 eight years following the date you filed your first case; if you want to file a Chapter 13 after a Chapter 7, you may file four years after the date you filed your first case.

If you received a discharge in a Chapter 13, you may file a Chapter 7 six years following the date you filed your first case, and may file another Chapter 13 two years after receiving a discharge in the prior Chapter 13 bankruptcy.

If you filed a Chapter 13 and it was dismissed, you may file another chapter 13 bankruptcy at any time as long as you can show a change in circumstance since the prior filing unless the order dismissing your case indicated a time period during which you were barred from refiling.

How Quickly Can I File Bankruptcy?

Though it is possible to file your case the same day you come in for your consultation, it may not be your best course of action. When you come in for your consultation, we will review your problems and decide what strategy best suits your specific needs.

How Much Will it Cost?

Our fees depend on the facts of your individual case. Some of the fees we may charge are regulated by the Bankruptcy Courts to ensure that they are fair and reasonable.

How Can I Pay for my Bankruptcy?

The short answer to this question is “any way you want.” Our firm will accept just about any payment plan that works for you subject to these few limitations. In a Chapter 7 case, the full fee must be paid prior to the filing of your case and your payment plan must be completed within 12 months of your first payment. In a Chapter 13 case, only a portion of the fee must be paid prior to the filing of your case and your payment plan for that amount must be completed within 12 months of your first payment.

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