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Credit Cards?
Medical Bills?
Harassing Phone Calls?
Talk To A Lawyer
On Your First Call! |
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If you answer “YES” to any of the following questions, you may need to explore Bankruptcy:
Are you getting harassing phone calls and letters from creditors who you cannot pay?
Do you have credit card debt that you cannot pay?
Do you have medical bills that you cannot pay?
Has a creditor filed a lawsuit against you?
Is your credit report full of collection accounts, foreclosures, and repossessions?
Are you facing a foreclosure?
Did you personally guarantee business debts for a business that has failed?
Are you a real estate investor who needs to “walk away” due to poor market conditions?
Are you being held responsible for a lease or for someone you co-signed for?
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What is Chapter 7 Bankruptcy?
Commonly referred to as “straight Bankruptcy,” in this kind of Bankruptcy the debtor does not set up a plan to pay creditors. The debts are simply eliminated (with some exceptions), and if the debtor owns anything that is not protected, it will be sold for the benefit of the creditors. In most consumer cases, everything is protected and the debtor
does not lose any property.
What Kind of Debts can Chapter 7 Eliminate?
- Credit Card Debt
- Medical Bills
- Unsecured Loans
- Lines of Credit
- Foreclosure Deficiencies
- Repossession Deficiencies
- Most Judgments
- Some Taxes
How Long Does a Chapter 7 Take?
Approximately 4 weeks after our office files your petition, you will attend a short meeting called a “341 Meeting” or a “Meeting of Creditors.” At this meeting you will be asked a few simple questions about your financial situation. Approximately 2 months after that meeting, the court should issue a Discharge Order that will eliminate your dischargeable debts.
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Chapter 13 is Bankruptcy intended for an individual or family with a regular
income. Chapter 13 allows you to keep all of your property, and to set up an
affordable payment plan with the Bankruptcy Trustee. The payment plan is
typically 3-5 years. At the end of the payment plan, most debts are considered
paid in full.
Chapter 13 Bankruptcy is the only kind of Bankruptcy that will stop a
foreclosure or repossession. If you are facing a foreclosure or repossession, please call our office immediately.
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In most Chapter 7 Bankruptcy cases, the debtors keep everything they own. This is because exemption laws protect your basic assets such as your house, your cars, your clothes, your household items, your retirement accounts, etc. However, there are limits. Please call our office and speak with Rich Reister about your situation to see if you are at risk of losing anything. Your house and cars are discussed below:
Your House
• If you are current on your mortgage payments, you can “reaffirm” the debt. This means that you can keep your house and continue making your regular mortgage payments.
• If you cannot bring your payments up-to-date, and you have regular income, you may want to consider filing a Chapter 13, which will give you 36-60 months to pay the arrearages.
• If you cannot bring your payments up-to-date, and have no income, the mortgage company probably cannot be stopped from foreclosing on your house. The Chapter 7 Bankruptcy gives you the opportunity to “walk away” from the house and the mortgage with no penalty. This is called “surrendering” the house.
Your Car
• If you owe money on your car, and are current on your payments, you can reaffirm the debt and keep your car.
• If you cannot bring your car payments up-to-date, the auto finance company cannot be stopped from repossessing your car unless you file a Chapter 13 and set up a payment plan. However, if your payments are high enough that you cannot afford them, you should consider surrendering the car back to the creditor. The Chapter 7 Bankruptcy allows you to do this with no penalty.
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A Chapter 7 Bankruptcy gives you an opportunity to rebuild your credit. The Bankruptcy filing will initially lower your credit score, and then it is up to you to rebuild it. Your score can be raised considerably in only 12 months after the Bankruptcy (see “After Bankruptcy” below).
Dischargeable debts will be removed from your credit report, or will show a $0.00 balance and say “Discharged.” This is good because it shows new creditors that you are out of debt. Under the Public Records section at the back of your credit report, a Bankruptcy filing will be reported. That notation will remain there for up to 10 years.
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After Bankruptcy, Now What?
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You have received your Discharge Order, which means your dischargeable debts have been wiped out. Now it is time to reclaim your life.
Rebuild your Credit
The way to rebuild your credit is by acquiring new credit and using it wisely. It is recommended that you obtain 3 new credit cards after your Bankruptcy. Obtain actual bank credit cards (Capital One, Chase, Bank of America), not department store cards. Use each card a little bit each month and pay off the balance each month ON TIME. Paying the creditors on time is what will raise your score. When Rich Reister pulls your credit report, he will show you what your new credit score can be 12 months after the
Bankruptcy.
Contrary to popular belief, you will be able to obtain credit after your Bankruptcy. Creditors know that you have been relieved of your debts, and they also know that you cannot file for Bankruptcy for another 8 years. When obtaining new credit cards, you may have to obtain a secured credit card, which works just as well for purposes of rebuilding your credit.
Change your Financial Habits
After you are out of debt, start building safeguards to prevent falling into debt again. Focus on living below your means and increasing your income so you can start saving money and investing for your future.
Avoid Debt
Except for the purpose of rebuilding your credit, do not buy things on credit cards. Avoid all other unsecured debts as well, such as payday loans and lines of credit. Try to find ways to pay for things with cash instead of on credit.
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The price of a Chapter 7 Bankruptcy will vary depending on the complexity of your case. Price is affected by factors such as the amount of your debt, the nature of your debt (credit cards, medical, etc), the amount of assets you have, the type of case (individual, married couple, business), and the difficulty of your case (debtors with higher income present a more difficult case under the new Bankruptcy law).
The filing fee for a Chapter 7 Bankruptcy is $299.00. Attorney fees for a Chapter 7 generally start at $1,500.00 for a simple case, and then go up from there. For an exact quote, please call our office and explain your situation to Rich Reister.
PAYMENT PLANS: Keep in mind that our office can design a payment plan to meet your needs, and we will file your case BEFORE all your payments have been made.
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