For many, there is a negative stigma attached to the word bankruptcy. Many of the negative perceptions associated with one filing for bankruptcy comes from negative stereotyping from the media.
In my 28 years of bankruptcy experience, when a person, company or couple files for bankruptcy relief, particularly a Chapter 7 proceeding, circumstances have drastically changed to create the need for a bankruptcy filing. Some of these circumstances include:
LOSS OF EMPLOYMENT
A LONG ILLNESS
A FAILING PERSONAL BUSINESS; OR BEING
A CO-SIGNER ON A DEFAULTED LOAN
Prior to filing for bankruptcy, you will need to acquire credit counseling through a United States Trustee-approved credit counseling company. You will need to do credit counseling BEFORE the filing of your bankruptcy case and a credit management course upon the filing of your petition and prior to your DISCHARGE DATE as noted on your 341 Notice Sheet.
The documents evidencing your counseling through any of the authorized agencies , must be filed with the Court. There are fees for these counseling sessions, which can either be done online or by phone. The fees for these sessions range anywhere from $15.00 – $25.00. Our offices will assist you in contacting an appropriate agency for both of these mandated credit counseling sessions.
Prior to the 2005 Bankruptcy Reform Act, a student loan could be discharged if they were more than seven (7) years old and met certain other conditions pursuant to the United States Bankruptcy Code. In comparison, at this time, the ability to discharge a student loan is quite difficult. One must file a separate bankruptcy action with the court and the determination must be made that the debtor is disabled and unable to work.
There are two types of student loans: Federal loans like Stafford and Perkins loans, and private loans from profit lenders such as Sallie Mae and banks, such as Citibank.
CONSIDERABLE AMOUNT OF UNSECURED DEBT: (CREDIT CARDS, LOAN DEFICIENCIES AND MEDICAL BILLS)
COLLECTION ACTIONS, INCLUDING GARNISHMENTS AND EXECUTIONS ON PROPERTY
FORECLOSURES ON HOMES
COLLECTION LAWSUITS AND JUDGEMENTS
CONTINUOUS CALLS FROM COLLECTION CREDITORS
If I have a bill that is more than 5 years old and I have not heard from the creditor by phone or by mail then I no longer owe the debt.
A judgment, if not renewed for an extended period of time, is good for ten (10) years. You should list all of your debts. The best method of acquiring your debt is from several sources, including Credit Reporting agencies, such as Expedia, Trans Union and Credit Karma. It is crucial that you list all debts; again noting that you must give notice to all of your creditors in order to discharge such debts.
Once a person files a bankruptcy case, you cannot acquire any further credit.
After filing for bankruptcy protection, you can acquire credit card debt. Your credit cards initially may be at a higher rate of interest; however, over a period of time, with timely monthly payments, you will not only be able to acquire credit a lesser rate of interest, but will see your credit score significantly increase.
If I file bankruptcy, I will not be able to keep my home, car or other possessions.
You can keep your home and car upon fling a bankruptcy. You must pay the secured creditors after filing if you wish to keep your house or car. You will be able to keep your possessions due to the fact that the bankruptcy court allows each person filing, certain exemptions in their property. At the onset of our offices representing you, at your initial interview, we sit down with you to carefully review all of your assets and liabilities.
The filing of a bankruptcy case initiates an automatic stay, which stay stops any and all collection actions by creditors. When you file a bankruptcy case, all collection actions, including garnishments, are stopped. You may be able to acquire the monies garnished, within the 90 days prior to filing your bankruptcy petition with the court back from that creditor. The collection calls are halted and there are no more court appearances for any of your collection actions. You can pick up your phone again, knowing that a creditor is no calling you at home or at work in an attempt to acquire monies from you.
These unfortunate circumstances create financial problems. These circumstances are the catalysts for significant stress and sleepless nights. These unfortunate circumstances are the reasons for many to be subjected to:
LIENS ON PROPERTY
CONTINUOUS, HARASSING COLLECTION CALLS FROM CREDITORS
These listed circumstances, and the many other items that cause a significant change in one’s ability to pay bills and debts, creates the undeniable need for financial relief. To restructure one’s finances or to eliminate unsecured debt, is commonly referred to in the world of bankruptcy as a FRESH START.
At the onset, to determine whether or not you can or should file a Chapter 7 Bankruptcy or a Chapter 13, which is the restructuring of your finances with a debt repayment plan, we will sit down with you to determine, when reviewing and analyzing your monthly household income and your reasonable monthly expenses, if you have any disposable income, in order to make payments into a repayment plan, which is a Chapter 13 Proceeding. You will be able to file a Chapter 7 after we determine that your income and expenses met the national requirements for qualification.
YOUR GOAL IN A CHAPTER 7 BANKRUPTCY CASE IS TO GET RID OF YOUR LEGAL OBLIGATION TO YOUR UNSECURED DEBTS. YOU WANT TO LEGALLY DISCHARGE YOUR DEBTS.
It should be noted that a business can file a chapter 7 to liquidate its assets and to close the doors of its operation.
If a business wishes to restructure its debt and assets, as well as to move forward, then you must file a Chapter 11 Bankruptcy proceeding.
From the debts listed on your petition, if you decide to keep, for example, your car or your house which creditors for such debts hold a perfected lien on the property for that debt, you must give that collateral or property back in order for that debt to become unsecured and dischargeable.
Pursuant to the United States Bankruptcy Code, and the Bankruptcy Information Sheet which document we will review in our offices, the following debts are non-dischargeable:
Debts owed from drunk driving accidents
Student loans (generally)
Court fines and restitution
Debts acquired after the debt of filing your bankruptcy case
For the most part, most chapter 7 bankruptcy cases are no-asset cases. This means there is usually no non-exempt assets that are acquired by a Trustee in order to give funds, on a pro-rata basis to your creditors.
Our offices will guide you through your entire bankruptcy process. This process includes your initial interview, the analyzing of your assets and debts, the preparation of your bankruptcy petition and schedules, attendance at your 341 first meeting of creditors on to the point of completion (receiving your bankruptcy discharge).
This Discharge Order discharges you of all of the unsecured debts that you have properly listed on your bankruptcy petition and schedules. It is important to note that you must give notice to all of your creditors of your bankruptcy filing in order to ultimately discharge that unsecured debt.