3. What is credit counseling?

We create an individualized plan to help you reduce stress and still pay off your debt. You make monthly deposits to our credit-counseling agency, which will then distribute these funds to your creditors. By participating in this program, you may benefit from reduced finance charges, lower balances, and/or lower monthly payments.

4. What are debt settlements?

Debt settlements are negotiations with your creditors to reduce the balance of the debt. For example, you may pay a lump sum of $6,000 to pay off a $10,000 credit card.

5. What is a proof of claim?

It is a written statement filed by a creditor describing the reason a debtor owes the creditor money and the amount of the debt. There is an official Bankruptcy form for this purpose. The creditors will have a deadline to file claims. If an unsecured creditor does not file a claim, the creditor will not be paid through the bankruptcy.

6. How long does it take to complete my bankruptcy?

Generally, a chapter 7 no-asset case will be closed approximately 60-90 days after the 341 Meeting of Creditors, and a chapter 7 asset case will be closed approximately 90-120 days after a Final Report is filed and after all assets have been administered. Generally, a chapter 13 case will be closed approximately 60-90 days after the Final Report is filed. Chapter 13 cases last from 36 to 60 months before closing begins. Although, your case technically remains open for the 36-60 months of payments, a Chapter 13 Bankruptcy is essentially completed at confirmation (approximately 6 months after your case is filed).

7. Why is it a good idea to hire a competent bankruptcy attorney?

In a Chapter 13 Bankruptcy, a good attorney will help you minimize your payments to unsecured creditors. In a Chapter 7 Bankruptcy, a good attorney will help you maximize the property that get to keep. Timing of your case may be very important; an attorney can advise you of the best time to file. Each Debtor filing an individual bankruptcy has a right to represent him or herself (Pro Se Debtor); however, the use of an attorney is highly recommended. Ignorance of the law may cost an individual far more than an attorney’s fee. By law, a Corporation is required to have an attorney. Individuals who choose to represent themselves will not be able to obtain legal advice from court personnel or from the trustee appointed to their case.

8. Does the new Bankruptcy Law affect me?

Procedurally yes. The new law requires that you obtain credit counseling before filing. There are also new forms required. The new Bankruptcy Law probably does not change your eligibility to file bankruptcy. In fact, the new Bankruptcy laws are at times more favorable to Debtors. For example, many Chapter 13 Debtors are paying nothing to unsecured creditors. Under the old Bankruptcy Laws, Debtors were required to pay 20% of their unsecured creditors back. The only way to know for sure if the new law affects you is to seek assistance from a competent bankruptcy attorney.

9. If I have an adjustable rate mortgage, can Bankruptcy help me?

Maybe. If you are in debt and behind in your payments, a Chapter 13 Bankruptcy can help you catch up those past due payments and avoid foreclosure. After a year of paying the Chapter 13 Trustee, you can probably qualify to refinance your adjustable-rate mortgage into a fixed-rate mortgage. Once filing bankruptcy, you must be able to make your ongoing mortgage payments. A Bankruptcy can also help you surrender your home without further liability on the note.