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- When should I file for a bankruptcy?
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There are many factors to consider when deciding if a bankruptcy is right for you. These will vary in importance
for different people, but some of the most common are:
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Am I at risk of being hurt financially by my creditors? Am I at risk of wage or bank account garnishment,
repossession or even foreclosure?
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Have my consumer debts (credit cards, medical bills, payday loans) reached the point where I can't afford to
pay them all each month, or is that time coming soon?
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Have I been living on my credit cards, and paying the minimum payments with my income?
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Am I being harassed by creditors, by phone calls, letters and threats of lawsuits and garnishments?
If the answer to any of these questions is yes, you should contact me to discuss your options, either bankruptcy or
an alternative solution.return to top
- I heard the bankruptcy laws recently changed. Can I still file bankruptcy?
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Yes. While the laws did get changed in 2005, it did not make it impossible to file. In fact, most people aren't
affected by the law change—it only has changed the ability of a few to file.
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- What is the difference between a Chapter 7 and a Chapter 13 bankruptcy?
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A Chapter 7 Bankruptcy is used primarily for people who have an average-to-below average income (and some businesses)
to get rid of consumer debts. Consumer Debts include the following:
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Credit cards
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Medical bills
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Payday loans
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Automobile repossession deficiencies
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Old utility bills
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Judgments
Chapter 7 Bankruptcies can also discharge certain taxes, and allow you to walk away from a bad car or house loan,
should you desire. The process is usually over within 6 months of filing, and you leave the Chapter 7 with a "fresh
start."
Chapter 13 Bankruptcies are structured differently than Chapter 7s. We work together to craft a Chapter 13 Repayment
Plan, which can help you get back on your feet. A Chapter 13 can help you do the following:
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Stop a foreclosure or repossession
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Pay back taxes and domestic support obligations
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Keep property you might lose in a Chapter 7 bankruptcy
Chapter 13 also provides bankruptcy protection for higher income debtors, allowing them to create an affordable
repayment schedule that is fair to all sides.
Deciding which chapter of bankruptcy, if any, is right for you can be difficult. It is best to consult with an
attorney before deciding.return to top
- Will I lose my property if I file bankruptcy?
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Most people go through bankruptcy and do not lose their personal possessions.
State law provides for protection (exemptions) of certain assets, which attempt to cover those items necessary for
reasonable living. Some assets are difficult or impossible to protect, and we will be happy to help you find out
what you can keep and what you might lose.return to top
- Does a bankruptcy get rid of all my debts?
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Not necessarily. Certain debts are non-dischargeable unless paid in full. Common examples include certain taxes,
child support obligations, and most student loans. Bankruptcy can help you be able to afford those obligations,
however.return to top
- Will filing bankruptcy ruin my credit forever?
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Actually, some clients have improved their credit scores immediately upon completion of a bankruptcy. Your access
to prime rates of credit will be impacted for some time, but many of my clients are now successful homeowners even
after a bankruptcy discharge. Your credit practices after bankruptcy are more important than the bankruptcy the
farther from the discharge you go.return to top
- I have filed a bankruptcy before. Can I file another one?
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It depends on what type of bankruptcy you filed, how long ago it was filed and discharged, and what chapter you are
thinking of filing, but yes. You have the option of filing another bankruptcy. Contact us for more detail.
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- What if I don't want to file bankruptcy on a specific debt?
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Federal law requires that all your debts and assets be listed in your bankruptcy
schedules. Listing a debt does not determine how you treat it after bankruptcy. If you wish to pay back a creditor
(perhaps a family member to whom you feel a moral obligation), you are free to do so voluntarily. Bankruptcy only
keeps the creditors from chasing you for the money.return to top
- Will everyone know that I filed bankruptcy? What if my boss finds out?
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Technically, a bankruptcy filing is a public record. But there are very few "lists" of bankruptcy filers that still
exist, and none published in significant circulation. It is unlikely that anyone not mentioned in the paperwork will
find out you have filed unless you tell them.
At work, it is generally illegal for an employer to discriminate against you because you filed a bankruptcy. More
importantly, you should not feel ashamed that you filed a bankruptcy. It is legal, and more common than you think.
You are taking steps to regain control of your finances, which is something to be proud of, even if you feel bad
about the circumstances that led to your filing.return to top
- Is bankruptcy morally wrong?
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That is not a question I can answer definitively, but I do not believe so. The American economic system is based in
part on the existence of bankruptcy. It is what allows for risk-taking and entrepreneurship, giving a safety net when
things go awry. Bankruptcy was so important to our founding fathers that it is enshrined in the Constitution itself.
Abuse of debtors' prisons was a problem under King George III. Forgiveness of debt is mentioned in several places in
Hebrew and Christian Scripture, including Deuteronomy 15:1-2:
At the end of every seven-year period you shall have a relaxation of debts,
which shall be observed as follows. Every creditor shall relax his claim on what he has loaned his neighbor; he must
not press his neighbor, his kinsman, because a relaxation in honor of the LORD has been proclaimed.
You may feel bad about reaching the point where you are considering filing a bankruptcy. That is understandable. But
doing so does not make you a bad person. You are simply using the available law to do something hundreds of thousands
of people do every year. Most creditors understand this, which is why they charge interest.return to top
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