Frequently Asked Questions:

How do I pick a bankruptcy attorney?

When you contact my office or hire me to file your bankruptcy case, you will receive personal attention you won’t find with any other bankruptcy law firm. Unlike other attorneys, I encourage you to email me whenever you have questions, and I will usually respond within an hour. I personally review and file every case myself, and I only use assistants for simple tasks like data entry. The true measure of my personal service is the high percentage of referrals I receive from former clients and other attorneys in the bankruptcy community, and I frequently receive thank-you notes from clients who’ve successfully completed their cases. When you look for a bankruptcy attorney, don’t shop by price alone because I never want to be known as the “cheapest” bankruptcy attorney. Instead, ask the attorney how long she or he’s been practicing, whether bankruptcy is the only kind of law they practice, and what kind of payment plans they offer.

Stay away from firms that require you to give them post-dated checks or authorization to debit your bank account! Avoid bankruptcy “mills” that have to file hundreds of cases every month in order to pay for expensive TV advertising – your case is not likely to receive much personalized attention in those “tall building” law firms. Ask the attorney what professional organizations he or she belongs to, and whether they ever provide service to the community by taking pro bono cases. If you’re on Social Security, ask whether sliding scale fees are available.

What about my student loans?

Bankruptcy laws have changed in recent years, making student loans nondischargeable in most cases. While collection activities will be suspended during a Chapter 7 case, you must usually resume your student loan payments when your case is concluded. During a Chapter 13 case, your student loan creditors will receive pro-rata payments along with your other unsecured creditors. At the end of your Chapter 13 case, you will resume your student loan payments according to the terms of the loan.

Can I keep my car?

You will be able to keep your car in almost all cases. In fact, in 15 years of bankruptcy practice, I have never had a client lose his or her vehicle in their bankruptcy.

Can I get rid of my car? My payments are killing me!

Bankruptcy also provides an excellent opportunity to get out from under a "bad" lease or "killer" loan payments. For example, early surrender of a leased vehicle outside of bankruptcy usually results in a deficiency balance for the unpaid amount owed under the lease agreement. In a Chapter 7 bankruptcy, however, you can surrender the vehicle and any deficiency balance will usually be discharged. In a Chapter 13 case, you can often pay off your vehicle by paying for only the vehicle's fair market value - not the entire amount of the loan payments.

What's the difference between Chapter 7 and 13?

Chapter 7, or "straight" bankruptcy, is for those people whose monthly take-home pay is just enough (or not enough) to cover basic living expenses such as rent, food, car insurance, etc. In other words, there's no money left to pay non-essential debts such as credit cards. Chapter 13, sometimes called "debt consolidation" or "debt reorganization" bankruptcy, is for those who have some money available to pay unsecured creditors - just not enough to satisfy everyone. In those cases, we submit a plan to the bankruptcy court specifying just how much you can afford to pay into your case every month. In most cases, your payment plan does not need to extend for more than 36 to 40 months, and when you successfully complete all of your plan payments, most unsecured debt you weren't able to pay will receive a discharge.

What will a bankruptcy do to my credit? I might want to buy a house some day.

If your financial situation has gotten to the point where you're considering bankruptcy, your credit history is probably already pretty bad, and it's my opinion that a bankruptcy won't make it worse in most cases. While there are no set rules about rebuilding credit, many of my clients tell me that they are able to buy houses or receive new credit card offers within a few years after their bankruptcy is over. If you think about it, you're a pretty good credit risk after a Chapter 7 bankruptcy, because most or all of your debt was discharged, and the law prevents you from filing another Chapter 7 case for six years. Credit reporting agencies are permitted to leave your bankruptcy filing on record for 10 years in a Chapter 7 case, and seven years after you receive a discharge in a Chapter 13 case.

What will it cost me to file bankruptcy?

The bankruptcy court charges $274 to file a Chapter 13 case, and $299 to file a Chapter 7 case. My fees will vary, depending on the chapter and complexity of your case. In a Chapter 13 case, I will be paid the majority of my fees automatically as you send your monthly payments into the Trustee. For a Chapter 7 case, I can usually get your case started and contact your creditors for a small up-front retainer. The balance of your Chapter 7 fees, however, must be paid in full before your case is actually filed.

In either chapter, I will always do my best to work with you on the payments so that the cost doesn't prevent you from seeking relief. One bit of free advice: If your credit is already "shot" and you're reasonably certain that you'll file bankruptcy, go ahead and stop making credit card payments. Save a month or two of those payments to cover your attorney fees and costs of filing. In my opinion, it's bad planning to be current on your credit card bills on the day your case is filed.

Will I have to go to court?

In most cases, no. The court will appoint a Trustee to oversee your case and review the papers we file. Approximately 30 days after your case is filed, you and your attorney will have a very brief meeting with the Trustee, at his office in a downtown office building. Although you will be sworn in and will answer the Trustee's questions under oath, it is an informal proceeding and it's unlikely that any of your creditors will be there.

Will I lose any of my property?

In fifteen years of bankruptcy practice, I have had only one client who lost property. He inherited $35,000 and had to turn it over to the Trustee for the benefit of his creditors. He owed much more than that, so it was still to his benefit to turn over the money and pay his creditors, because the unpaid balance of his debt was still discharged. In your bankruptcy case, you always retain the right to terminate it at any time if your financial situation changes drastically.

What about the changes in bankruptcy laws that I keep hearing about?

Since the new bankruptcy laws went into effect in October, 2005, less than 5% of my clients have been negatively impacted. The credit card companies wanted you to believe that bankruptcy wouldn’t be available any more, or that it would be much harder for you to file. The truth is that it’s now more complicated, but unless you make well over the median income you won’t be negatively impacted by the new laws. If you have doubts, please give us a call so we can run the numbers for you. Remember: the lower your income, the better your chances for qualifying for a fresh start.

What about income taxes? Will they "go away" if I file bankruptcy?

The laws concerning income taxes are very complicated in bankruptcy. In a Chapter 7 case, some income taxes may receive a discharge if you filed the returns and gave the government a few years to try and collect from you. A Chapter 13 plan generally must provide for the full payment of delinquent income taxes, but penalties and interest are not added during the time you are in Chapter 13.

How long will my case last?

A Chapter 7 case usually lasts a little less than four months, ending with the court mailing a discharge notice to each of your creditors. Chapter 13 cases generally last from 36 to 60 months, depending on the particular financial circumstances in each case.

So how do I get started with my case?

Unlike most bankruptcy attorneys, I prefer to do most of my "free consultations" by phone. I don't make you listen to a pre-recorded tape - I want to talk to you myself, in person. I will always be available to answer your questions, but I'm not ready to have you come into the office until you're ready to begin filing your case. That way, you can be fully prepared with your initial fee payment, and all of the documents I will need in order to begin working on your case.

By scheduling fewer office appointments for free consultations, I can make myself more available to personally work on your case once you decide to file. If your particular financial situation is unusually complicated, I may ask you to come into the office for your initial consultation in order to more accurately analyze your various options.