Preliminary Evaluation and Pre-Filing Preparation

bankruptcy

One part of the preliminary evaluation for any bankruptcy is to look at and determine exactly what type of debts you have. Many times this will guide a lawyer in which kind of bankruptcy will be most effective for your situation.

We offer a no-cost preliminary evaluation interview for anyone considering a bankruptcy. However, under the new Bankruptcy Law passed in October 2005, there are many items of documentation that are needed for this interview to be the most productive. To assist in evaluating your situation, you need to provide us with the following at the time of your first interview:

a) Pay history or income history for the past 6 months – This can consist of copies of your paystubs, a payroll history printout from your employer, or other documentation, such as a Social Security award letter where you receive the exact same amount every month. The law requires this information so we can determine if you qualify for a Chapter 7 or a Chapter 13 bankruptcy.

b) A credit report – This can be acquired on the internet by going to www.annualcreditreport.com and filling out the required information. You can secure a credit report from each of the three major reporting agencies: Experian, TransUnion, and Equifax. You can download these off the internet and print them out. These credit reports allow us to verify all reported debts, determine if you are the victim of credit fraud, and provide accurate name, address and account information for your listed creditors.

bankruptcy

c) Copies of any bills that you owe that are not listed on one of your credit reports. (Not all creditors report their debts to a credit-reporting agency.)

d) Copies of installment sales contracts (as well as a title) on any vehicle or other item of personal property (i.e. boat, 4-wheeler, camper, trailers) that you own or are making payments on.

e) Copies of deeds or mortgage papers on any real estate that you own or on which you are making payments.

f) Copy of your county tax appraisal sheet for both real and personal property showing the assessed values.

Bankruptcy Facts

Bankruptcy Facts

How often can I file bankruptcy?

The Bankruptcy Reform Act of 2005 changed the time frames within which an individual can file a bankruptcy and receive a full discharge of his or her unsecured debts. Also, the new law changed how some debts are discharged. Time frames are judged from the date of filing of the last bankruptcy to the expected filing date of the new bankruptcy. A Chapter 7 bankruptcy can only be filed once every eight (8) years. A Chapter 13 can only be filed once every two (2) years. If a person had a previous Chapter 7, then a Chapter 13 can only be filed after four (4) years. Due to the change in the law, a personal interview is required to determine exactly which time frame may apply in your case.

When will creditors stop harassing me?

Generally, a Debtor is “fair game” for a creditor until a bankruptcy is actually filed with the Court. As a practical matter, however, most creditors will cease collection efforts once the attorney has been retained to file.

I’ve already been sued. Can bankruptcy help me?

A bankruptcy filing will automatically stop all collection efforts. If you have been sued, but the bankruptcy is filed before a judgment is entered, no judgment can be entered. If a judgment has been entered, collection of the judgment is stopped.

How long will bankruptcy stay on my credit report?

For 10 years. No one can legally remove a bankruptcy notation from a credit report, if 10 years have not elapsed. Do not trust anyone who says that bankruptcy notations less than 10 years old can be removed, especially if they want to charge you a fee to do this.

Will I ever be able to get credit again? Will I be able to buy a home?

There is no magic formula to rebuild credit after a bankruptcy. Obviously, a Debtor who has just completed bankruptcy will want to make timely payments on continuing obligations such as utilities, rent/mortgage payments, car payments, etc., in order to rebuild the credit record. Another way to help rebuild credit is through the judicious use of a secured credit card. Generally, once two (2) years have elapsed after the discharge, creditors start to look favorably about granting credit. Obviously, the reason why someone files for bankruptcy comes into play here. Home mortgage loans are generally available to a Debtor after two (2) years have elapsed, assuming the person otherwise qualifies for the loan.

What are the ramifications of filing bankruptcy?

Quite frankly (in our personal opinion), aside from one’s ability to get future credit, the primary negative aspect of filing bankruptcy is the personal and emotional feelings a person may have about bankruptcy.

Bankruptcy Facts

Can I leave some creditors off of my bankruptcy petition? Do I have to list all of my debts?

All debts owing as of the date of the filing of a bankruptcy petition must be listed on the schedules; no creditor can be left off. This applies even to debts owed to friends and relatives. When a person signs a bankruptcy petition, he or she is certifying under penalty of perjury that all assets and liabilities (debts) are listed on the petition. Additionally, at the time of the meeting of creditors, a debtor will be asked, under oath, if all assets and liabilities have been listed. This does not mean, however, that certain debts cannot be reaffirmed. Even if a debt has been discharged, the Bankruptcy Code is very specific that nothing prohibits the voluntary repayment of a discharged debt. On secured debts such as car loans and home loans, the Debtor still lists that debt on the petition, but can reaffirm the debt in order to keep the property.

Do many people file for bankruptcy protection?

Absolutely. According to the American Bankruptcy Institute, filings nationwide increased from over 1.4 million petitions in 1997 to over 2 million in 2005. As a result of the passage of the new bankruptcy amendments in October of 2005, new filings for 2006 reduced to 617,660; but gained in 2007 to 850,912. Bankruptcy is still a viable option for many individuals.

General Bankruptcy

General Bankruptcy

Many people today are suffering under a mountain of debt and expenses while their income has not kept pace. In many instances, people experience job loss, corporate downsizing, reduced work hours, divorce, serious illness or accidents that cause an interruption of their income. Bill collectors are very unsympathetic to many of these life-changing events. All they want is “their money.”

Federal bankruptcy law provides a legal and respectable way to gain control over your life and your finances again. The law provides a mechanism to stop your debt collectors from filing a lawsuit against you, garnishing your wages or bank accounts, repossessing your vehicle or foreclosing on your home. The law allows you to restructure your finances in a manner that provides relief from a lot of your debts as well as providing a framework for paying for the debts you want to keep.

One of the most important features of a bankruptcy is something called the “automatic stay.” This is the legal requirement that ALL creditors must stay away from you and stop ALL debt collection activity once an individual has filed for bankruptcy and received an official case number. The automatic stay stops all foreclosures, lawsuits, garnishments or other legal actions taken by a creditor in their efforts to collect on a past due debt. It also stops all creditors from taking any new action to collect on a debt while in a bankruptcy. Harassing phone calls, rude debt collectors and nasty mail or emails should stop as soon as a creditor receives notice that an individual has filed for bankruptcy. However, in the real world it may take a little time for the big corporations to make sure that the knowledge of a bankruptcy filing is properly communicated to the proper collection department or the proper subsidiary in charge of collections. It is a violation of Federal bankruptcy law for a creditor to continue to make collection attempts once they have received actual notice of a bankruptcy filing.

Most average Americans utilize either a Chapter 7 bankruptcy (see Overview) or a Chapter 13 bankruptcy (see Overview) to take back control over their financial lives. Overviews of each type of case are included in the following information. Because you owe debts, the law refers to you as a Debtor. The person or company that extended credit to you and to whom you owe the debt is referred to as a Creditor.

General BankruptcyUnderstanding Your Debts

There are generally three kinds of debts involved in a bankruptcy:

a) Secured Debts – These are debts for which the repayment is secured by a lien on a physical piece of property called, “Collateral.” Some examples are: car loans, boat loans, 4-wheeler loans, real estate mortgages, bank loans secured by CD’s, bank accounts or other property. Generally, if you default on the repayment of this type of debt, the Creditor can repossess or foreclose on the collateral, sell the collateral at auction, apply the proceeds to the balance owed, and sue you for what is left owing, called “a deficiency.” If a Creditor obtains a judgment against you for the deficiency, then that Creditor can garnish (take money) from your paycheck or bank account. In some instances, the Creditor can force the Sheriff to sell some of your property to satisfy the judgment.

b) Priority (unsecured) Debts – These are generally unsecured debts that are considered by the law too important to just forgive so they must be paid in full. Some examples are: taxes and certain other debts owed to the federal or state government, and alimony, maintenance or child support payments. There are other types of priority debts but most average debtors will generally not encounter those.

c) General Unsecured Debts – These are the most common type of debts that most debtors experience. These debts are not tied to any specific collateral and are just general obligations to repay the debt owed. Some examples are credit card debts, medical bills, hospital bills, local merchant charge accounts, etc. As a general rule, unsecured debts are “discharged” after the completion of your bankruptcy. They simply “go away” and a Creditor is forbidden by law from ever trying to collect that debt.

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