1. How much does it cost to do a Bankruptcy?
Filing for bankruptcy includes separate fees, 1) the filing fee paid to the court and 2) the attorneys fee. There is also a $20 fee for doing a required credit counseling fee, but that is taken from the attorney fee.
Chapter 7: The filing fee for a Chapter 7 case is $306, this fee is the same regardless of the case being individual or joint. The attorney's fee with Richards & Godfrey, PC., generally starts at $799, however, it can be case dependent and we have filed for less and even for more. Regardless, it is free to talk with us about your potential case, let us see what we can do for you and let us show you how we can work with you.
Chapter 13: The filing fee for a Chapter 13 case is $281, this fee is the same regardless of the case being individual or joint. The attorney's fee is set by the state and depends on a few factors such as your income and debt load. However, this fee does not need to be paid up front but can be paid through your bankruptcy plan. You can file for Chapter 13 with no money down today!
2. If I file for Bankruptcy what happens?
The moment you file, it's like a protective force field is put up around you, this protection is known as the "automatic stay". The automatic stay stops creditors from being able to contact you, continue to garnish your wages and even stops a pending foreclosure. All of your assets and debts become part of what is called the bankruptcy estate. What happens after these two things automatically happen depends largely on the type of case you file.
Chapter 7: In Chapter 7, all of your debt is wiped out. You can't pick and choose between things you want to get rid of and things you don't. If you have a car or home for example that has a loan on it, you can choose to keep that item by signing what is called a "reaffirmation agreement" if you were current on your payments when you filed. Generally if you can show the ability to keep making the payment you will be able to keep that item. Some exceptions do apply. Between 60-90 days after you file you will have a hearing with the bankruptcy trustee, this meeting is known as a 341 Meeting of Creditors, in this short hearing the bankruptcy trustee will ask you some questions regarding why you filed, your assets and debts. After this hearing, there may be a few things that your attorney will need to take care of. Once these items are taken care of, you will wait for your "discharge", this usually takes place within another 90 days. Generally you are in a Chapter 7 Bankruptcy for 6-8 months.
Chapter 13: In Chapter 13, your debts are treated differently depending on what kind of debt it is and whether or not the debt is secured by some piece of property. A plan is presented to the court which shows how your debts will be repaid over the next 3-5 years. The length of your Chapter 13 plan depends on a computation or your debt and income. Chapter 13 allows you to get caught up on house payments which your are behind on, car payments, back taxes owed, amongst other things. Chapter 13 is a great option because it gives you leeway to propose a plan to the court which is affordable AND can allow you to keep things you have fallen behind on. Also, remember, unlike in a Chapter 7, you can get filed right away, with no money down. Your fees and costs for filing can be paid through the bankruptcy plan you propose to the court.
Obviously this is just a brief overview but the kind of case to file really depends on your situation. The process can be done without an attorney, but research shows that cases filed without the help of an attorney are less successful, if successful at all. Besides all that, you don't need the added stress. Let us use our experience to help you.
3. I am losing my house in foreclosure, can filing for bankruptcy help me keep my home?
If you are behind on your house payments and your lender is foreclosing or you fear they will soon, filing for relief under Chapter 13 can help you keep your home. Chapter 13 allows you to make payments on the "arrearage" or the amount you are behind over the next 3-5 years. As long as you can continue to make your house payment once you file, the back portion you owe will be made up in small installments over the course your bankruptcy. We can file up to the morning of your foreclosure sale to stop the sale. Remember, for this to work, you will need to be able to make your ongoing normal house payment.
4. I am afraid of my car being repossessed , can filing for bankruptcy help me keep my car?
Chapter 13 can allow individuals who are behind on car payments to keep their car and get caught up. Once you file, your car payment will be made through your Chapter 13 plan payment, the payments will be made over the next 3-5 years, and by the time you are done with your bankruptcy, your car should be paid off.
5. I owe little on my car loan or I own my car outright, will I lose it if I file for Bankruptcy?
No, however what will be required for you to keep your car through a Chapter 7 will vary depending on the amount of equity you have in your car. If there is no equity you will be able to keep it. If there is $3,000 or more equity in the car the trustee may be able to access the amount of equity over the $3,000. Remember, if you still owe money on a car, you can choose to "reaffirm the debt" and continue to make payments under the existing terms of the loan; or you can buy the car from the lender in a single payment for its present value, this is called "redemption". You can always choose to surrender the car to the lender without any responsibility to pay anything more for it.
6. Should I file for Bankruptcy?
People who file for bankruptcy generally have experienced a job or income loss, divorce, or accident or injury. However, there are many reasons people are forced into filing bankruptcy. There are times in our lives when we wish we could just start over, if we just had another opportunity to do it over again we would do it better the next time around. Filing for bankruptcy can be this second chance for many people. When you file for bankruptcy and get a "discharge" of your debts, your debts are erased, you are not responsible for paying them any longer. Imagine if you actually got to keep all the money you are paying to creditors, do you think you would be in a better spot financially? When you file for bankruptcy you get an opportunity for a fresh start.
7. How bad will filing for bankruptcy effect my credit?
Initially, filing bankruptcy will have a negative impact on your credit. However, if you are thinking about filing your credit is probably less than stellar as it is, for many people filing for bankruptcy is a tool which can help to rebuild credit.
- How long will it take to rebuild credit?
- You can begin to rebuild your credit right away by obtaining a secured loan or credit card. Many people are able to obtain these while going through the bankruptcy process. Interest rates will understandably be a bit higher for a while but by making on-time payments and using credit responsibly your credit will strengthen and your rates will come down.
8. Do I really need a lawyer to help me file bankruptcy?
The simple answer is no, there is nothing which states that a person must have an attorney when filing for bankruptcy. However, research shows that many who choose to file for bankruptcy without the help of an experienced bankruptcy attorney will be unsuccessful in completing their bankruptcy. Aside from this, the paper work and calculations can be complicated and stressful. No one would chose to do surgery on themselves, everyone wants the best doctor when they are sick to make sure they get better. Why should filing for bankruptcy be any different? Using an experienced bankruptcy attorney puts the odds more in your favor, probably best to let an expert help you.
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