Bankruptcy information is crucial for those who feel that their debt is overwhelming them. For those considering personal bankruptcy, you’re going to need complete and helpful bankruptcy information. So I put together this FAQ about bankruptcies.
See also: “What type of debt do you have, and will BK eliminate it?”
Below are some FAQs for bankruptcy. However, before you get there, you’ll want to review the “Should I File Bankruptcy” page, that addresses some of the feelings of guilt or other issues you’ll be dealing with in this struggle.
Q – What does a bankruptcy attorney cost to file bankruptcy?
A – It’s like asking what it costs to build a web site. Will it be minimal work with 10 words and a picture, or a lot of time to produce another Amazon. It depends; every case is different. This isn’t coupon carpet cleaning where one price fits all (until they tell you it was just 2 rooms). A single unemployed renter and a married employed homeowner with a family are different situations, and yes, will have a different bankruptcy cost because there’s a lot more in play in the latter. Once we have a chance to talk and we find out what we’re getting into, we’ll give you a flat fee in writing, and there won’t be any hidden costs or surprises later.
Q – My case is easy, now can you tell me?
A – Not until we meet and talk. Oddly, everyone says they have the easiest case ever, but they don’t know the law and how it could really muck things up. But we promise that if your case really is the easiest one ever, trust that we’ll and give a very competitive fee since we want your business.
Q – How can I pay you if I can’t pay my debts?
A – Yes, we have a flexible payment plan. And we’ll accept a lot less than your credit card minimum payments will take. When you finish paying, we’ll finish working, then file your case. We don’t charge interest. We’re patient. And affordable, especially when you consider the value you’re getting. We’ve stayed in business for years helping people who have no money. It’s totally doable. You got this!
Q – What is the difference between Chapter 7 and Chapter 13 bankruptcy?
A – A Chapter 7 means you can’t pay your debts, so you don’t have to… but beware, you can lose things. Chapter 13 means you keep all your stuff, but you can afford to make a debt consolidation payment that stops interest and lawsuits. I’m working on a Chapter 13 bankruptcy FAQ.
Q – Why do a Chapter 13 if I can pay my debts myself?
A – The magic of interest. A Chapter 13 bankruptcy freezes interest accrual, so you’re not spinning on the treadmill forever paying minimums. In Chapter 13, you make a set number of payments and the rest is forgiven. Here’s more information about Chapter 13 bankruptcy.
Q – Do I pay all my debts in Chapter 13 bankruptcy?
A – Usually, no. You don’t pay all debt in a Chapter 13 bankruptcy, unless you can. In most cases, clients pay one set monthly payment for a set time, and after that time the unpaid credit cards go away forever. So no, most don’t pay all debt in a bankruptcy.
Q – Why would someone choose Chapter 13 again?
A – Lots of reasons. It’s a way to force your mortgage lender to stop foreclosure while you pay back the lates. It’s a way to stop the IRS and Franchise Tax Board from hounding you while you pay back your tax debt. It’s a way to lien-strip a second mortgage. Or sometimes it’s your only option as a debt consolidation to repay what you can afford without getting sued.
Q – Who wrote this bankruptcy FAQ?
A – Glad you asked. I did.
Q – Can anyone qualify for Chapter 7?
A – No, you have to be eligible to qualify for Chapter 7. It’s mostly based on income. You can’t choose Chapter 7 if you make too much money. The higher your income is, the harder it is to qualify for Chapter 7. The means test decides.
Q – What is this bankruptcy means test?
A – The bankruptcy means test is a long form that reminds some people of a tax form. It calculates things based on a mixture of your actual expenses and others that the Department of Justice allows to you spend. If you’re close to the borderline of income, you can retain us to run your numbers to see if you qualify before you commit one way or the other.
Q – Is your bankruptcy office still over by Boot Barn?
A – We were in the Boot Barn Plaza for over ten years. We added a second office as the economy got worse in 2008-2010. However, as the economy has been recovering, bankruptcy filings nationwide have decreased for about 8 years in a row now. This is a great thing, but caused us to make some of the tough decisions we’ve counseled clients over the years. So, to manage expenses and cut overhead, we kept the Palmdale office, and closed the Santa Clarita one, as storefront office space in the SCV isn’t cheap. We still consult with potential clients in the SCV by having casual chats in a coffee shop, or of course at our AV office.
Q – Will I keep my car and house in Chapter 7 bankruptcy?
A – Yes, most of our clients keep their car or home when they file Chapter 7 bankruptcy. Typically it involves staying current on payments, reaffirming the car. But beware of having too much home equity!
Q – What is your success rate?
A – Our track record is a 99% success rate on Chapter 7 cases, and our success rate for getting Chapter 13 bankruptcy cases confirmed is much higher than the national average. What we can assure you is that we’ll try our best to answer your questions in a way that’s easy to understand, while treating you with dignity, compassion, and respect.
Q – Do I have to go to court? Does your fee include full service?
A – Yes, and yes. You have to testify that the papers you signed under oath are true. And don’t worry, you’ll be totally prepared for it, and the same attorney you consulted with and who signed your papers with you will be by your side. That’s part of the full service. Our one flat fee covers all the services covered in a typical bankruptcy. There are no hidden fees or surprises.
Q – I’m excited to start over. What’s the next step?
A – Easy. Just contact us, and we’ll call you ASAP to arrange a no-pressure consultation with an attorney. We’ll explain how it works, go over your options. Then we give a quote for our fee. And then you go home and talk to people you trust, and then, when you’re ready, return to hire us. And then the ball is rolling!
Q – Will I be able to re-establish credit after I file bankruptcy?
A – Yes, to the surprise of many. You’ll find that the credit card applications start arriving within 6 months. BE CAREFUL and only take on what you can afford. You will have a fresh start with your debt. Don’t blow it, because you cannot file BK again for another 6 years. For more, see our article: Credit after Bankruptcy.
Q – Can I keep my home in a bankruptcy?
A – Maybe. See the above link.
Q – That reminds me – I’ve filed bankruptcy before. Can I file again?
A – Yes, it just depends when. Chapter 7 bankruptcy requires you wait 8 years between filings. There are fewer restrictions on Chapter 13.
Q – Do I have to pay taxes (1099c form, etc) on discharged debt?
A – Generally, no.
Q – Isn’t it better than filing bankruptcy to hire a debt consolidation or debt management company?
A – No. See my list of reasons to be very wary of credit counseling places.
Q – Can you tell me how to file bankruptcy?
A – Hey now. That’s my job!
Q – Will I have to give back my computer and stereo?
A – Probably not. A good bankruptcy lawyer can help you with California’s bankruptcy exemptions for personal bankruptcy.
Q – How do I stop my creditors from harassing me at work or calling me at home?
A – Once you retain us as your bankruptcy attorney, refer your creditors to us. This will be the very first benefit you see from having a bankruptcy lawyer. Also, once you file bankruptcy, all attempts to collect on debts must stop.
Q – What if I’m about to have my car repossessed, or want to stop a house foreclosure. In fact, I’m being sued by some law firm by my creditor, or a lawsuit has already turned into a judgment and a wage garnishment. How to stop all of this?
A – Once you file your bankruptcy papers, all collection activities stop. Don’t waste time. Contact a bankruptcy attorney who is also a Santa Clarita bankruptcy lawyer right NOW.
Q – What does a “simple” bankruptcy cost?
A – All cases are different, but generally the attorney fee is about $1400 to $2500 (plus $335 for filing fee). Once we learn about your situation in detail, we’ll put it in writing with a flat fee for all services in a typical case. It covers everything. No nickel and diming.
Q – How am I supposed to afford that? I’m filing bankruptcy, remember?
A – Yes, of course. Ask about our flexible payment plan. All our clients are struggling. Yet, we can make a living helping people who don’t have money by being flexible with an affordable payment plan. We’ll work as you pay, with payments as low as $250 a month. This is how we make it easy.
Q – How much is pi?
A – 3.1415
Q – How does the process work?
A – You submit a contact form, we contact you, we learn about your situation, we provide a flat fee and contract, you sign the contract and return it with your payment. After we’re paid in full, we file your Bankruptcy Petition & Schedules at the bankruptcy court. (I’m funny that way, but I don’t want people who are about to file bankruptcy to owe me money!)
Q – How do I contact the bankruptcy lawyer and start the process?
A – Glad you asked. Click on the contact link at the top .. right now!