Bankruptcy Q & A

Q. What is bankruptcy?

A. Bankruptcy is a constitutional right created for people to eliminate or reduce their debts.

Q. What is Chapter 7?

A. Chapter 7 is a typical bankruptcy that wipes the slate clean. Chapter 7 eliminates most types of debt, to give you a fresh start.

Q. What types of debt does Chapter 7 eliminate?

A. Chapter 7 eliminates credit card bills, personal loans, medical bills, judgments, lawsuits, broken leases, repossessed car debts, and even in some cases, personal income taxes.

Q. What type of debts are not eliminated in Chapter 7?

A. Generally, government debts such as parking tickets and student loans are not eliminated in a Chapter 7. Court ordered debts such as child support and alimony are not eliminated either.

Q. Can I file a Chapter 7?

A. Eligibility requirements to file a Chapter 7 are somewhat complicated but, can be explained by an experienced bankruptcy attorney.  If you have no major assets that are not protected by the bankruptcy exemptions, and your household income falls below the allowed levels (which vary based upon the amount of people in the household), you will be eligible to file Chapter 7.

Q. How much does it cost to file a Chapter 7?

A. It depends on the complexity of your case, we normally take an initial deposit of no less than $300 and then set up a payment plan for the remainder of the fee. Call for a Free Consultation and fee quote at (800) 806-1136.

Q. Can I keep my house if I file Chapter 7?

A. YES, so long as you do not have more than $341,650.00 equity for a jointly held primary residence, and stay current on your mortgage payments.

Q. Can I get credit after filing a Chapter 7?

A. YES, in fact you will receive credit card solicitations almost immediately following the bankruptcy process. Moreover, you can purchase a new home or a car as soon as you get your discharge from the bankruptcy court (Subject to credit approval, Discharge usually occurs 4 months after filing).

Q. What amount of debt is needed to file a Chapter 7 bankruptcy?

A. If you cannot foresee any way to pay off your debts in a reasonable amount of time, you should file a Chapter 7 bankruptcy if you are eligible. The amount is not necessarily relevant, what matters is your ability to pay the debts back.

Q. Can I file another Chapter 7 if I have already filed one before?

A. You must wait eight years from the filing date before filing another Chapter 7. However, Chapter 13 bankruptcy may be an option for you.

Q. What is Chapter 13?

A. Chapter 13 is a repayment plan that pays back a portion of your debt based on your income and assets. You must have regular income to file a Chapter 13, this can include rent, social security, unemployment or regular help from family.

Q. Why would someone file a Chapter 13 instead of a Chapter 7?

A. Chapter 13 is necessary to stop the foreclosure process on your home or the repossession process on your car if you want to save those assets. In addition, if you earn too much money, or have assets with too much equity to qualify for a Chapter 7, you must file a Chapter 13 and propose a Plan to repay the past due payments over a period of up to 60 months.

Q. What form of payment do you accept for services?

A. We gladly accept debit cards as well as checks, cash and money orders.

Q. How can I get in contact with an attorney who can help me?

A. Contact us at Berger, Fischoff, Shumer, Wexler & Goodman, LLP, through email hberger@bfslawfirm.com or by telephone at 1-800-806-1136 for a Free Consultation.

What is Chapter 7 Bankruptcy?

A Fresh Start. . .

Chapter 7 is a form of debt relief by which you may eliminate most forms of unsecured debt such as credit cards, medical bills and personal loans. In most cases, you can keep your home, car and other personal belongings. Or a Chapter 13 is a debt repayment plan through which you consolidate your debts over a three-to-five year period. The creditors cannot collect from you during the term of the plan.

If you are being harassed by creditors who are bothering you at work, harassing your family, friends, and neighbors, you can stop them immediately simply by hiring our law firm to represent you. Upon the filing of a bankruptcy petition, our lawyers provide you with a docket number so that you can refer your creditors to us, which will stop the harassment.

In a Chapter 7 bankruptcy we can eliminate any balance due after a vehicle financing company has repossessed your car and auctioned it. This can remove the risk of a lawsuit or garnishments as the finance company might seek to recover the difference between the balance owed and the auction price. Or in Chapter 13, debts that are generally consolidated are mortgage arrears, balances on vehicle loans, student loans, credit card debts and other unsecured debts.

If you have cosigned a debt for a friend or relative, and their failure to pay the debt has resulted in legal action against you, we can eliminate your liability as a cosigner through a Chapter 7 bankruptcy.

Stop Garnishments and End Lawsuits

A Chapter 7 is one of the most effective ways to immediately stop garnishments. Garnishments can diminish your hard-earned income making it almost impossible for you to afford life’s basic necessities. By filing a Chapter 7 and stopping the garnishment, you will be able to use your income for more important necessities and start saving for your family’s future. We can also help you get your drivers license reinstated if it is suspended due to an uninsured car accident, and stop any lawsuit related to that car accident.

Chapter 7 is one way for you to begin re-establishing your credit by reducing your debt to income ratio. With little or no remaining debt lenders may feel that you will be better able to repay your debts in the future. Many people who file chapter 7 buy homes within one year, or finance cars after discharge. Many discharged debtors receive solicitations for unsecured credit within a few months.

Contact us now. Our lawyers are available to discuss your options. You will find our rates for bankruptcy very competitive and reasonable.

What is Chapter 13 Bankruptcy?

Chapter 13 is an interest free debt repayment plan through which you consolidate your debts over a three to five-year period. The creditors cannot collect from you during the term of the plan. Debts that are generally consolidated in a Chapter 13 are mortgage arrears, balances on vehicle loans, student loans, credit card debts, and other unsecured debts.

One important thing to remember about Chapter 13 is that you must be working or have a consistent source of income for your repayment plan to be approved by the court. Not only must you be able to pay for your monthly living expenses, but you must also be able to make a payment to the court to consolidate your debts.

Chapter 13 will stop a foreclosure any time prior to a foreclosure sale, and allow you to repay your mortgage arrears. You will still be obligated to make all future payments directly to the mortgage company, but they may not proceed with the foreclosure. Call us now because once your home is sold at auction, there is nothing we can do to stop the sale.

Although you may not eliminate student loans in a Chapter 7 bankruptcy, you can consolidate student loan debts with your other bills in a Chapter 13, and stop a collection action against you. We can stop the collection action and garnishments related to student loan debts.

Your cosigners get protection too-in fact the same protection that you receive under Chapter 13 may protect your cosigners from collection activity while you are in your repayment plan.

Our law firm can use Chapter 13 to stop a finance company from repossessing your vehicle. The past due payments will be consolidated into the Chapter 13. The finance company cannot repossess your car, but you will be obligated to make future payments directly to the finance company. In some instances, we can even get your car back if it was recently repossessed.

Beware of Refinancing

If you have equity in your home, you can file a Chapter 13, protect your equity, and repay your mortgage arrears over time. Refinancing or taking out a second mortgage may just create an additional mortgage payment that you cannot afford. You should explore all your options. With our quality legal representation, you become aware of your rights, and become less vulnerable to people trying to take advantage of you in a time of distress. 

What is Foreclosure?

Home foreclosure, in simplest terms, is the process by which the bank or mortgage company that has a lien on a piece of real property takes that property back because the borrower / property owner hasn’t complied with the terms of the mortgage agreement. Most often, this is because the borrower has fallen behind on payments.

The exact foreclosure process differs somewhat from state to state, but the real problems usually begin when mortgage payments are 16 days past due.

Although it is still possible to work out a repayment plan with the lender at that point, many homeowners do not. This may be because they’re still in the midst of the financial difficulties that caused the past-payment, or simply because they’re hoping things will get better with the next paycheck or the next month or some other change in circumstances.

Unfortunately, many people delay too long while hoping for things to get better. If a homeowner has significant equity, usually at least 15 – 25 percent, in the home and is less than 90 days past due, there may be a variety of possible ways to stop foreclosure, including refinancing.

However, once a loan is more than 90 days past due, or if the homeowner doesn’t have significant equity, which is often the case due to creative financing options, refinancing can be difficult.

In those cases, Chapter 13 bankruptcy may still allow the homeowner to stop foreclosure.

Can Chapter 13 Bankruptcy Stop Foreclosure?

Many people file for Chapter 13 bankruptcy specifically to stop foreclosure.

In most cases, an automatic stay is entered as soon as a Chapter 13 bankruptcy petition is filed. The automatic stay should temporarily stop foreclosure, along with all other collection action, regardless of the stage of the foreclosure proceedings.

With the automatic stay in place, the debtor and his attorney have the breathing room to work out a Chapter 13 repayment plan.

What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is a reorganization of debts that allows a debtor to make payments to creditors over a period of three to five years. Chapter 13 is sometimes called a “wage earner’s bankruptcy” because it requires that the debtor have a steady source of income for the duration of the repayment plan.

Chapter 13 bankruptcy is an option for those who do not qualify to file Chapter 7 bankruptcy due to the means test. However, many people choose Chapter 13 when filing bankruptcy because it may allow debtors to keep their home, car, and other types of secured debts.

How Does Chapter 13 Bankruptcy Work?

A debtor must file a proposed plan, setting forth his income, allowable living expenses, and proposed payments to the trustee for the benefit of creditors. Current payments must be kept current after the Chapter 13 bankruptcy petition is filed.

Homeowners must make all mortgage payments that come due during the Chapter 13 bankruptcy repayment plan, and failure to make current payments on time may mean that the bankruptcy court lifts the automatic stay and allows the mortgage company to resume foreclosure proceedings.

Assuming that all plan payments are made in a timely manner, the homeowner may catch up the past due mortgage payments over the 3-5 years of the repayment plan, or may discover that he is eligible to refinance the property after a period of repayment.

Generally, a homeowner can file a Chapter 13 bankruptcy to stop a mortgage foreclosure if the homeowner:

• Is employed or has another regular source of income
• Has sufficient income to make Chapter 13 plan payments as well as all current
• Mortgage payments and living expenses
• Does not have debts in excess of the statutory caps for Chapter 13 bankruptcy