5 Things Your Bankruptcy Lawyer Should NOT Say

November 21, 2012 - 04:55 by bankruptcylawyer

With any legal process it is typically best to hire an attorney to help with the complex rules that our laws contain. The same goes for filing bankruptcy; having a bankruptcy lawyer on your side may be in your best interest. However, you should be prepare yourself with tools that ensure that your lawyer is the best bankruptcy lawyer for you. There are dozens of chapter 7 bankruptcy rules as well as very different chapter 13 bankruptcy rules. Here are 5 things that your bankruptcy attorney should not say:

  1. "Which Chapter do you want to file?"

    This question is not typically asked by bankruptcy attorneys because a lot more goes into choosing a chapter of bankruptcy. In most cases the chapter of bankruptcy that you file will depend on your household income, the type of debt that you have, and if you have ever gone bankrupt before.
  2. "I can get rid of all your debt."

    Yes, going bankrupt plays a part in erasing debt, but in most cases it is difficult to say that all of your debt will be eliminated. The reason is because there are certain types of debt that the bankruptcy law does not allow to be erased such as: student loans, child support, alimony, or debt owed to the government.
  3. "Don’t worry about any other civil court hearings."

    Hearing any attorney say this would be a red flag, but especially from a bankruptcy attorney. If you are receiving summons to go to a court hearing because one of your creditors is suing you it should not go unattended. Court summons are very important, no matter who they come from.
  4. "Don’t worry about any extra overtime that you are working."

    Filing bankruptcy depends on your income so it is typical for a bankruptcy attorney to ask you to notify him/her if your income drastically changes in one direction or the other. A drastic change of income could mean the difference between filing a Chapter 7 bankruptcy or a Chapter 13 bankruptcy.
  5. "I’ll do your bankruptcy for no money down."

    Just like with any legal process, going bankrupt costs money. In most cases attorneys require a “retainer” fee to be paid at the time you sign the contract for service and then a larger amount of attorneys fees to be paid before the case is filed. There are attorneys that do “pro bono” work that is free of charge, but in most cases bankruptcy doesn’t fall into that category.

Going bankrupt is a process that many attorneys specialize in and know very well, however there are just as many attorneys, if not more, that know very little about the practice of bankruptcy. Take your time finding the best bankruptcy attorney for your situation and don’t be afraid to ask questions throughout the entire filing process. If you hear one of the phrases listed above, don’t panic; just try to get a second opinion from another bankruptcy lawyer, friends or family that have filed, or even your local bar association.


What I Learned from Bankruptcy Court 

November 7, 2012 - 04:51 by bankruptcylawyer

Throughout my time as a personal bankruptcy paralegal I spoke to debtors as they were going through every step of the process. Whether they were filing a Chapter 7 bankruptcy or a Chapter 13 bankruptcy the emotions and questions were very similar. My goals were always the same: make sure they were paired with the best bankruptcy attorney for their situation and help them feel prepared for what was next. After preparing many debtors for their bankruptcy court hearing I would get calls or emails letting me know how it went. Here are some of the things that debtors said they learned from bankruptcy court.

  1. It Wasn’t Like TV Court: Many of us picture a judge, jury, and crowds of people when someone mentions a “court appearance,” but bankruptcy court isn’t like that at all. The hearing is performed by a bankruptcy trustee and there is no need for a jury. One similarity is that in most cases your bankruptcy lawyer will be present with you.
  2. My Creditors Weren’t There: Although the bankruptcy court appearance is also known as the “Meeting of Creditors” there are rarely any creditors present, and even if they are the bankruptcy trustee does not allow them to badger or harass the debtor. If some of your creditors choose to attend the hearing they will most likely speak directly to the trustee and not to you.
  3. It was Over Quickly: One of the most surprising things about the bankruptcy court hearing is the speed of which it takes place. Depending on the type of bankruptcy, a standard bankruptcy hearing can last anywhere from 8-20 minutes!
  4. The Questions Were Harmless: As mentioned earlier the “Meeting of Creditors” is performed by a bankruptcy trustee who will ask the debtor a series of questions to ensure that no fraud has been committed. In most cases, these questions will be simple ones like: “do you own a home,” “are you expecting to inherit any money in the next few months,” and “have you listed all of your debts and assets?”
  5. I’m Not Going Through This Alone: In most cases bankruptcy hearings all take place in 1 or 2 specific courtrooms within the district courthouse; this typically means that those courtrooms have quite a few people in them at one time. It is typical for your hearing to be one of many that is taking place that day.

There may be certain levels of worry associated with filing Chapter 7 bankruptcy or Chapter 13 bankruptcy, but your court hearing shouldn’t be one of them. Remind yourself that after the 10-15 minutes you spend answering questions for the bankruptcy trustee you will just be waiting for your bankruptcy discharge: the paperwork stating that your debts have been eliminated and your bankruptcy is fully completed. If you are still feeling anxiety about your bankruptcy hearing as your bankruptcy lawyer to go through some typical questions with you to give you an extra confidence boost.


Signs You Have Recovered From Your Bankruptcy 

October 31, 2012 - 03:48 by bankruptcylawyer

Picture this: your personal bankruptcy is completed and you are opening your mail to discover your bankruptcy discharge papers stating that all of your debt has been eliminated through a chapter 7 bankruptcy. Sounds great, right? The best part about it is that the idea isn’t so far fetched; it happens to thousands of Americans every day. The day that you receive your bankruptcy discharge in the mail is the day the credit recovery process starts. Here are some signs that you have recovered from your bankruptcy:

  1. You Aren’t Hearing from Creditors: Before you filed personal bankruptcy you may have been one of millions of Americans that are plagued every day by creditors calling them. Depending on who your creditors are it could be legal for them to contact you at home 5-10 times a day asking for some kind of payment. This is enough to stress anyone out, and it’s sometimes just unbearable. If you are no longer being harassed by creditors every day then it probably means that they received notice of your bankruptcy and have correctly reported your account to the credit bureau as having a zero balance.
  2. You are Able to Save Money: Typically, when a chapter 7 bankruptcy is complete most unsecured debts are wiped away and you are able to start fresh financially. In most cases the debtor goes from having dozens of bills each month to simply the necessities like rent, utilities, and groceries. This allows individuals coming out of bankruptcy to do something they may have never had the chance to do before: save money! Treat your savings like you would any other necessary payment and put something towards it with every paycheck. Before you know it you will have a savings account to really be proud of.
  3. Your Credit Score is on the Rise: You may have heard the myth that filing bankruptcy drops your credit score to zero and it’s impossible to ever bring it up again, but don’t believe everything you hear! Although filing personal bankruptcy does affect your credit score it does not drop it to zero and you will have the ability to increase it the day your discharge papers are in. You can rebuild your credit score by making timely payments on secured debts like vehicles, utilities and student loans. Increasing your credit score after filing bankruptcy does not happen overnight, but with positive financial decisions it typically becomes better than it has ever been.

Filing bankruptcy is a process; before filing you are looking for an affordable bankruptcy attorney, during the filing process you have to decide Chapter 7 vs. Chapter 13, and after your bankruptcy is completed you have to continue on the road to financial recovery. Just remember that you aren’t alone in this process and make sure to ask your bankruptcy lawyer plenty of questions each step of the way. Although bankruptcy may seem like a daunting process, in most cases the outcome is well worth the wait.


How to Control Credit Card Debt

October 24, 2012 - 03:41 by bankruptcylawyer

For decades credit card debt has been at the root of bankruptcy. It has been the main cause of Chapter 7 bankruptcy and is slowly becoming a key reason that people are turning to Chapter 13 bankruptcy. The question remains, why are credit cards and bankruptcy constantly tied to one another and how can we stop it? Here are a few ideas to help you control your credit card debt:

  1. Utilize Auto-Pay: Virtually all credit card companies have an “auto-pay” option available because it ensures that they get paid each month. That may seem like only a perk for the credit card companies, but you can use it to your advantage too. By signing up for auto-pay you do not have to worry about being late on a payment and you will be instantly building credit. Just make sure to set your auto pay to deduct your minimum monthly payment around the time you know you will have the money in your account and you will begin building healthy credit immediately!
  2. Pay Attention to Fees and Interest: Whether you are just now applying for your first credit card or have a wallet full of them you should always be aware of what you are being charged in interest, annual fees, and late fees. Be wary of cards with high annual fees and high APR% because these are the types of fees that push individuals over their credit limit without them even knowing. Once you are over your credit limit or are using more than 70% of your credit line it could possibly reflect negatively on your credit report. As much trouble as it may seem, reading the fine print before signing up for any credit card is the best place to start.     
  3. Only Spend Money that you Really Have: Some people say that this rule is the most important and is what gets most debtors into the kind of trouble they can’t overcome without bankruptcy help. Remember that credit cards are not just free money; these credit lines have very strict due dates on when you must pay them back and if you will not be able to pay them at that time do not use them at all. A great way to get in the habit of only spending what you have is to start with small and repetitive purchases such as gas. Use your credit card at the gas pump 1 or 2 times a month and when you get home pay it off immediately so that you can be building credit, but not going overboard and spending what you don’t have.

Despite what a lot of our society thinks, credit cards are not evil. Yes, they may lead to a slippery slope of tons of debt, but if used the right way they can be truly beneficial. The key is to be careful and not to overspend because credit cards can lead to the simplest do it yourself bankruptcy or the most complex Chapter 13 bankruptcy depending on how they are used and abused.                          


Bankruptcy and Age Restrictions

October 17, 2012 - 04:39 by bankruptcylawyer

While working as a bankruptcy paralegal I had a surprising number of young adults call to ask the same question: “How old do I have to be to file bankruptcy?” The answer is fairly simple: there is no specific age restriction, but typically you have to be 18 to incur most types of debt (i.e credit cards and personal loans) so in most cases filers are 18 or older. There are tons of reasons why going bankrupt soon after your eighteenth birthday is not the smartest thing to do, but lets just start with the top 3:

  1. Troubling Your Mid 20s: According to the United States Bankruptcy Code, an individual can only file for Chapter 7 bankruptcy protection every 8 years. This means that if you file bankruptcy at the age of 18, you are putting your finances at risk until you are at least 26 years old. We all know that dozens of life changing events happen to people between the ages of 18-26 including college, marriage, children, and in some cases even purchasing a home and/or vehicle; these things will be more difficult to finance if you already have bankruptcy on your credit record.
  2. Risking Student Loan Eligibility: If an individual files for bankruptcy protection at the age of 18 and then seeks the help of federal or private student loans to pursue higher education they may face tougher eligibility requirements than other students who do not. Federal student loans are not likely to discriminate based on a bankruptcy, and in most cases they do not; the trouble with eligibility typically comes when students apply for private student loans after filing personal bankruptcy. Many private student loan companies have credit criteria that preclude people with a bankruptcy within the past 7 or 10 years from borrowing without a creditworthy cosigner.
  3. Harming Your Fresh Credit Report: Like I mentioned earlier the age of 18 is the earliest that most credit card companies will allow individuals to receive credit lines, so by filing bankruptcy soon after that you will have the mark of bankruptcy on your credit report for 7-10 years and negate that clean record you had as an 18 year old. Although that bankruptcy mark will not make it impossible to be approved for new credit, it does make things more difficult.

All of this is not to say that going bankrupt in your early 20s is a terrible decision, and it may be exactly what you need to jump start your finances in the right direction. You should just be aware of the effects bankruptcies have on individuals during and after their case is completed and also the alternatives to filing at all. Contact your credit card companies if you are a new customer and feel yourself starting to struggle with payments, or as friends or family for sound financial advice. If you are young and considering bankruptcy protection for the first time it may be in your best interest to not try to file bankruptcy yourself, and instead hire a bankruptcy lawyer to help you throughout the process.                   



The Fastest Way to File Bankruptcy

October 10, 2012 - 04:34 by bankruptcylawyer

America is a fast paced society, and that’s a fact. We can look things up with the touch of a few buttons and have the world at our fingertips, but when it comes to legal processes everyone knows they take a bit longer and bankruptcies are no different. Many bankruptcy lawyers will agree that the debt didn’t all occur overnight and it won’t be erased overnight either. However, just like with any system in America there are loopholes to expedite the process. If you or someone you know is claiming bankruptcy and want to speed things up, here are some key tips:

  1. Know the Bankruptcy Rules: Before you start the bankruptcy process, take a few weeks to gather some general information about exactly which Chapter you should file and why. Doing this research will enable you to skip a few steps when meeting with attorneys and get right to the heart of your case. Remember, Chapter 7 bankruptcy is typically used for individuals with high amounts of unsecured debt (like credit cards and medical bills) and little to no high value assets. On the other hand Chapter 13 bankruptcy can be used to stop a home foreclosure or vehicle repossession by allowing the debtor to pay back a percentage of their unsecured debt over a 3 to 5 year period.
  2. Don’t File Bankruptcy Yourself: Although you may think it will be the quickest and most painless way to file, going through bankruptcy without an attorney is tough and can be extremely confusing. If filing quickly is your goal, then hiring an experienced bankruptcy attorney may be your best option. Think about it this way, for you the process of bankruptcy may be brand new and daunting, but a typical bankruptcy attorney handles anywhere from 30-40 cases a month and he/she may specialize in all of the fine print bankruptcy laws that your state may have. Let the specialization and experience of a local bankruptcy attorney be your advantage to a speedy process.
  3. Have Your Paperwork Ready: During my time as a paralegal I saw hundreds of bankruptcies screech to a halt because of a lack of paperwork from the client. As the debtor you will be responsible to provide your bankruptcy lawyer with all the necessary paperwork that the court requests. This paperwork will consist of: tax returns, pay stubs, bank statements, mortgage or lease agreements, vehicle ownership paperwork, and in some cases even the same information from your spouse. Because this paperwork is requested by the bankruptcy court it is vital that you have it readily available to your attorney when he/she asks you for it.

It is rare for a bankruptcy case to be filed in a day or a week, but I have seen it happen for extreme circumstances. However, if claiming bankruptcy is what you truly need to get your finances back on track then don’t worry yourself with the logistics of how long it will take. Focus on finding a great attorney, communicating with them effectively, and taking the process one step at a time to ensure a fresh financial future for you and your family. 



Common Problems After Filing Bankruptcy 

October 3, 2012 - 04:32 by bankruptcylawyer

Whether you are filing chapter 7 or filing chapter 13 bankruptcy, it is always best to be prepared with the knowledge of what happens after your filing is complete. The typical paperwork you will receive to let you know that your case has legally been completed are known as the “discharge” papers. Discharge papers explain to you that your case was both completed and successful. It is always best to keep any bankruptcy forms you receive from the bankruptcy court in a personal file that you can easily keep track of. It doesn’t matter if you hired a lawyer to file your case or if you utilized a do it yourself bankruptcy, you could easily contract one of these 2 common problems after filing bankruptcy:

  1. Immediately Accepting New Credit: It is typical for credit card companies to offer new credit lines to individuals coming out of bankruptcy, and in some cases debtors say they are bombarded with offers in the mail every day after their discharge. Don’t be fooled though, this isn’t the credit card company trying to be generous; in fact it is quite the opposite. The companies that offer this immediate credit relief know that the US bankruptcy code only allows a debtor to file a Chapter 7 case every 8 years, so the sooner they can get your hooked on for more debt, the better for them. Instead of readily accepting these offers, think about smarter credit choices such as gas or grocery store credit cards, or even secured credit cards through your local bank. These options will allow you to rebuild credit in a healthy way and stay away from another bankruptcy 8 years down the road.
  2. Not Understanding Your Credit Report: It is well known that bankruptcy will stay on your credit report for 7-10 years depending on the type of Chapter that you file, but many people don’t know exactly how that will affect their life after bankruptcy. While it is true that having “bankruptcy” on your credit report does not make it impossible to purchase items, it does make things a bit more difficult. For instance, your credit will be checked if you want to do any of the following: buy a car, rent an apartment, apply for a mortgage, apply for a personal loan, apply for certain government or bank jobs. Because of your bankruptcy mark you may not be given the best interest rates, but those types of hurdles will decrease with time; many debtors say that they have no trouble purchasing a vehicle 1 year after bankruptcy, and financing a new mortgage 2 years after.

As you can see, both of these common post bankruptcy problems have simple solutions. Be sure to discuss any anxiety you are having with your bankruptcy attorney and write down any answers he/she gives you so that you feel prepared if that worry starts to set in again. If you are choosing a "do it yourself bankruptcy"and do not have an attorney, just try googling the phrase “bk info” for helpful information from knowledgeable sources. Either way, it is always best to know the options before diving head first into an unknown process.


Top 5 Celebrity Bankruptcies

September 26, 2012 - 02:57 by bankruptcylawyer

It may sound cliché, but you are not the only person today that is thinking about going bankrupt. Bankruptcies affect thousands of people who are living in the same stressed economy that you are and are having a hard time financially. The decision to declare bankruptcy happens to all types of people all over our country, and it has been that way for decades; to put it in perspective for you, here are some famous celebrities that have made the tough decision to file bankruptcy:

  1. MC Hammer: The 1990’s hit single “U Can’t Touch This” put MC Hammer over the top as an icon and also as a millionaire. It is estimated that at the end of 1990 MC Hammer was worth $33 million dollars. As “secure” as that may seem, MC Hammer’s bank account could not keep up with his lavish spending habits, and in 1996 he filed for bankruptcy.
  2. Mike Tyson: Throughout his career Mike Tyson was always ready to put on a show. His athleticism and ability to entertain earned him nearly $400 million dollars over his 20 year career. Nevertheless, in 2003 Mike Tyson was forced to declare bankruptcy because his outstanding debts all over the world were far exceeding his income.
  3. Larry King: One of the United States most popular television and radio personalities once found himself wrapped up so far in a scandal that bankruptcy quickly became his only option. In 1978 after being accused of stealing money from his Wall Street business partner Larry King had nowhere else to turn besides bankruptcy.
  4. Latoya Jackson: Being from the outrageously musical family that she is, Latoya Jackson longed for her vocals to help her soar to fame too, but that plan did not work out as she intended. In 1995 Latoya Jackson spent all she had to launch her singing career and the only place it lead her was to bankruptcy.
  5. Michael Vick:  Despite being one of the most athletic quarterbacks the NFL has ever seen, Michael Vick couldn’t stay away from financial struggles. After being convicted of involvement in an illegal dog fighting ring Vick lost his lucrative NFL salary and was forced to face the hard truth that he was in nearly $20 million dollars of debt. He filed for Chapter 11 bankruptcy in 2008.

You see, even the individuals that seem to have it all together financially hit rock bottom sometimes. Financial issues arise in everyone’s life that are unexpected and most definitely unwanted, but there are ways to cope! In most of the cases above, going bankrupt helped to jumpstart a new financial future and it can do the same for you. Whether you are asking “how does bankruptcy work” or if you have already found the best bankruptcy lawyer for your case you should be encouraged that the decision to file bankruptcy isn’t just happening to you, and it could be the beginning of you and your families’ financial fresh start.



Top 5 Surprising Bankruptcies

August 28, 2012 - 23:06 by bankruptcylawyer

It’s easy to get bogged down and discouraged when you think that you are the only one dealing with the decision to declare bankruptcy. It may be encouraging to know that some of history's most successful names dealt with the same struggle you may be dealing with today. Bankruptcies can happen to anyone, and if you don’t believe me just take a look at some of these names.

  1. Abraham Lincoln: Our revered 16th president fell into overwhelming debt because of a failed general store he opened in 1823. He owed about $1,000 after the store closed and he didn’t have the money so his creditors took him to court and won the right to his last valuable assets: a horse and some surveying gear.
  2. H.J. Heinz: If it wasn’t for the ideas dreamed up by H.J. Heinz all of our hot dogs, hamburgers, and french fries would be lacking to say the least. The condiment king was only 25 years old when his struggling business failed to sell enough of a horseradish sauce to pay the bills. The company declared bankruptcy in 1875.
  3. Milton Hershey: America’s favorite chocolatier knew that his candy was great, but unfortunately didn’t quite know how to run a business. In 1882 his first candy shop attempt in Philadelphia fell because he couldn’t cover the expenses any longer. He decided to declare bankruptcy and head back home to Lancaster, PA to try again.
  4. Henry Ford: Although Henry Ford was a mechanical innovator, even he couldn’t stay away from the financial struggles that come with a failed business. He started his first motor company in 1899 and because of his need for perfection the company had only produced 20 vehicles in a years time. The business owed much more than it made that year and went bankrupt in 1901.
  5. Walt Disney: Many of us owe countless family vacations and memories to Walt Disney, but at the start of his career he owed his creditors more than he had. Walt Disney opened his first film studio in Kansas City in 1922 and barely kept it alive for a year. After a failed deal with a New York company that promised to distribute his films, Walt didn’t even have enough money to cover his small overhead. The studio ended up going bankrupt in 1923.

There are startling similarities between all five of these men: each one struggled financially, each one filed bankruptcy, and each one of them went on to be wildly successful. Although this isn’t a guaranteed recipe for success, it does show that going bankrupt can put you back on track financially. So find the best bankruptcy lawyer for your situation (keeping in mind that there are cheap bankruptcy lawyers available) and ask “how does bankruptcy work?” If you discover that it may be in your best interest to declare bankruptcy, remember that you aren’t the only one to struggle, and you will come out of the process with a fresh financial future.


Toni Braxton’s Bankruptcy Woes

August 21, 2012 - 20:23 by bankruptcylawyer

Although it may not seem like it, financial struggles happen to everyone no matter what they job title is, where they live, or how much money they make. The truth is that no one ever plans to file bankruptcy, but if debt becomes overwhelming it may be one of the only available options. Just ask one of the 90’s most popular R&B singers Toni Braxton, who has now filed for bankruptcy twice in the past 15 years. How does bankruptcy work for an award winning and apparently wealthy musician? The same way it can work for you.

The 1990’s gave Toni Braxton a critically acclaimed international tour, 5 Grammy awards, and unfortunately her first Chapter 7 bankruptcy. Many close to her said it was due to her extravagant lifestyle and spending habits, but she told the press that it was due to a myriad of circumstances including her record label not compensating her well enough and the unforeseen costs of show business. No matter what the cause, Toni Braxton’s 1998 bankruptcy reported $3.9 million dollars worth of debt and caused the court seized the majority of her household possessions and awards to pay off as many creditors as possible. According to the Public Access to Court Electronic Records Braxton’s 1998 bankruptcy was “dismissed or settled without entry of judgment” so whether or not she was freed of her debts is unknown.

More recently, in 2010 Braxton once again filed for Chapter 7 bankruptcy relief in the California federal court, this time listing more than $50 million in debt. Unlike her previous bankruptcy the courts records show that this case was discharged normally on 8/26/2011. A discharge means that the Chapter 7 bankruptcy was completed and successful in wiping away all qualified unsecured debt.                   

You may be wondering how someone who was making millions of dollars off of hit records and sold out tours was eligible to have their unsecured debt (like credit cards and medical bills) completed wiped away. The answer lies in a system of equations known as the bankruptcy means test. Put simply, the bankruptcy means test is a way to determine which Chapter of bankruptcy an individual qualifies for by deducting necessary monthly expenses from overall monthly income. Both times Toni Braxton filed for bankruptcy the court used the means test to determine that her expenses outweighed her income each month and that she was entitled to Chapter 7 relief.

So whether you are in the early stages of looking for a cheap bankruptcy lawyer, or you have already found the best bankruptcy attorney for your situation, remember that you aren’t alone! Hundreds of thousands of Americans from all walks of life file bankruptcy every year, and as you can see from Toni Braxton some people even need bankruptcy help more than once to completely ensure a financial fresh start. Filing bankruptcy is nothing to be ashamed of and may be the option you and your family need to consider if you continue to be plagued by debt.                       


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