Bankruptcy
Three Ways Filing
for Bankruptcy Can Help You
Are you worried about the possible negative outcomes of a bankruptcy
declaration, such as inability to obtain credit or loss of assets?
Fortunately, many of the things you hear about filing bankruptcy simply
are not true.
The benefits of finding debt relief through bankruptcy almost always far
outweigh the risks. When you are facing financial crisis and you have
exhausted all your other options, bankruptcy may be your only source of
relief from mounting debt and creditors' threats.
Remember, bankruptcy is nothing more than a financial strategy.
- Asset Protection
You want to protect your home. You need your vehicle to drive to work and fear repossession. We can help you evaluate your assets and debt and stop wage garnishment and foreclosure proceedings through an automatic stay, a process that results from your declaration of Chapter 7 or Chapter 13 bankruptcy. - Improved Credit
You probably have heard that after declaring bankruptcy, your credit is shot. This is simply not the case. On the contrary, filing bankruptcy provides you with the opportunity to begin to rebuild credit. You can gradually improve your credit score over time. - End Harassment
One of the most debilitating results of incurring a high amount of debt is harassment. We understand the emotional toll this takes on you, leaving you drained and unable to make any change for the better. When you declare bankruptcy, harassing letters and calls from creditors stop.
Is
Bankruptcy the Best Choice for You?
Bankruptcy may be the best option to resolve your financial
difficulties, stop those harassing telephone calls, and get a start
fresh. However, if you are facing unpaid taxes or foreclosure problems,
other programs are available. We can review your financial situation
together and discuss your options.
What if Bankruptcy is the Choice You Make?
If bankruptcy is your best option, depending on your circumstances, you
would most likely file either a Chapter 7 or a Chapter 13 case.
Chapter 7 Bankruptcy
Chapter 7 is uncomplicated and the most straightforward bankruptcy
process. When you are buried in debt, facing garnishment, seizure,
creditor harassment, or fearing foreclosure or repossession of property,
Chapter 7 is often the only way to stop the damage
Under Chapter 7 a debtor discharges his debts, most times without any
requirement to repay creditors. The primary purpose of Chapter 7 is to
discharge the legal obligation to pay in order to provide debtors a
financial fresh start.
The good news is that even with the new "means test" required by the
bankruptcy law changes in 2005; most debtors needing the protections and
fresh start of Chapter 7 still qualify.
Chapter 7 bankruptcy usually takes about four months from filing to
discharge. For most debtors there is no requirement that you appear in
court before a judge. You only attend a short meeting of creditors
before a court-appointed trustee.
The filing of a bankruptcy case puts an "automatic stay" into effect.
The automatic stay immediately stops your creditors from trying to
collect what you owe them. It also stops creditor calls, lawsuits,
garnishments, and foreclosure on your property.
The bankruptcy discharge eliminates a debtor's personal liability on
dischargeable debts. However, the right to a discharge is not absolute
and some types of debts are not dischargeable. Further, a discharge does
not eliminate certain liens on property.
Most debtors can keep property they own if it is exempt. We have the
experience to identify dischargeable debts and to properly exempt your
property.
You’ll be able to maximize what you can keep and pay the least amount of
debt lawfully possible under Chapter 7. When the process is completed,
you will have a financial fresh start.
Chapter 13
Bankruptcy
The alternative to Chapter 7 is a Chapter 13 bankruptcy.
Chapter 13, sometimes known as a Wage Earner Plan, is a type of
bankruptcy relief that allows debtors to repay creditors to the extent
they can afford to do so, many times paying only a fraction of what is
owed (credit card companies, medical bills and other unsecured debts).
Chapter 13 may also be appropriate when there are past due car payments
or unpaid and non-dischargeable debts such as federal taxes. Chapter 13
provides debtors the opportunity to repay past due mortgage loans in
foreclosure and save their home, especially when attempts to work out
repayment with the lender have reached a dead end.
If you have a steady income, the Bankruptcy Court can approve a payment
plan lasting from 36 and up to 60 months. Every month a payment is made
to a Trustee who then distributes the money to the creditors. The part
of your debt which is not required to be paid to the creditors is
discharged.
What about Private Debt Consolidation
Companies?
You may ask, "Can't I do the same thing through a debt consolidation
company and avoid the stigma of declaring bankruptcy?" While this is
an option, I frequently counsel clients that private debt consolidation
often only makes the situation worse. Just signing up with some debt
consolidation companies can have a negative effect on your credit.
Unlike Chapter 13 bankruptcy, debt consolidation through a private
company does not guarantee debt relief within three to five years.
Private debt consolidation companies are typically underwritten by the
banks you already owe—there is an inherent conflict in this kind of
arrangement that results in huge fees.
Furthermore, Chapter 13 bankruptcy will put an end to creditor
harassment and the threat of repossession and foreclosure—private
companies cannot promise this. In our experience helping clients find
debt relief, we have never seen a single success story when people have
opted to have their debt consolidated through a private company. Why
take the risk?
Do I Really Need a Bankruptcy Attorney?
Bankruptcy is complicated. The decision of whether to file bankruptcy
requires planning with an experienced bankruptcy attorney. If you file
the paperwork incorrectly or use a petition preparation service, which
cannot legally advise you on bankruptcy law, and make errors, the
problems you may face could exceed the cost of hiring an attorney. Your
lawyer's advice can make a big difference as to how much property you
may be able to keep and how much debt you can eliminate.
Hiring a bankruptcy attorney is inexpensive when you compare it to your
other options —paying all of your bills, dealing with collection
agencies, and dismal credit scores.
We can help you properly list all of your obligations, maximize your
exemptions to help you keep all your property, and eliminate as much
debt as possible. The bottom line is you’ll save money and enjoy peace
of mind.
What’s the Cost of Filing a Bankruptcy Case?
Your initial consultation/review is free. It takes 20-30 minutes for me
to understand your specific situation and advise you on the best course
of action.
To file a bankruptcy case, there are basically three costs: 1) a filing
fee, currently $274 for a Chapter 13 case and $299 for a Chapter 7 case,
2) the attorney’s fees, and 3) a fee for the consumer credit counselling
which can range from no cost to $50.
We have flat fees so you’ll know up front what your costs will be.
Attorney fees are based on a number of factors and all cases are
different. We base your fees only on the work we do for you. To
determine the appropriate attorney fee we ask that you complete a
questionnaire at your free initial consultation so that we get a clear
picture of your financial situation. The less complicated your
bankruptcy case is, the lower your attorney fees will be.
When your fees are determined in advance, you know the total cost of our
services before your case is filed. As our client you’ll receive
personal, one-on-one assistance - with an attorney. Our fees are very
competitive with, and in fact quite often, times less than, what other
bankruptcy firms charge.
The Law Offices of Rebecca Dao Cornia is a debt relief agency under federal law.