Frequently Asked Questions

Frequently Asked Questions

Can I get rid of back taxes through bankruptcy?

Yes. We get rid of old “income” taxes for our clients all the time. By “old”…I mean income taxes more than 3 years old. Under the law, there are 3 or 4 qualifications that have to be met but once these are met these taxes are gone. Please note: Filing bankruptcy does NOT get rid of withholding or sales taxes no matter how old they are.

Can I pick and choose which debts and property to list in bankruptcy?

No. We have to tell the Court about all property and all debts. Then we tell the Court what you plan to do about the property and debts. If you want to keep your house and car but get rid of the motorcycle, that’s fine. If you want to discharge everything but continue paying friendly doctor so-and-so, that’s probably fine too.

One of the few things you can get in trouble for is failing to disclose things to the Court. Make sure to always tell everything to your attorney and let us help you determine what the Court wants to know.

Can I still file for bankruptcy if I have filed before?

Yes. There are limits to how often you can file, but no limits on how many times you can file. Our attorneys can help you to determine your eligibility.

That being said, it is my goal to do more than just discharge your debt. We will help you analyze your finances in order to make sure that this is your last bankruptcy. Not your first.

Can I still file for bankruptcy under the new laws?

Yes. The news media overcooked the whole story when the laws changed. The truth is that you can do almost everything under the NEW law that you could do under the OLD law. In some ways, the new law actually increased the benefits of filing bankruptcy.

As it turns out … and you need to hear this … clients are getting a better break under the NEW law, than they would have gotten under the OLD law.

Does filing a bankruptcy mean I'm a bad person?

No. There’s a reason over 1,000,000 Americans file bankruptcy each year…and it’s not because they’re bad people. Lots of good, honest, hard-working people fall on hard times. Let’s face it, life can be brutal and sometimes the money’s just not there. The bankruptcy laws were created to make sure you have a way to get free from the burden of debt so that you and your family can have a second chance at a “fresh start”.

Does my spouse have to file with me?

No. In many cases where both husband and wife have a lot of debt it makes sense and saves money for them to both file but it is never a requirement under the law. We have many cases where only one spouse has filed. The good news is that generally, if it makes sense for both spouses to file together they can both file for the price of one filing.

Is it hard to file a bankruptcy?

No. The decision to file may be hard, but once the decision is made an experienced bankruptcy attorney can make the process very easy on you.

Is it true that certain creditors are still allowed to harass me and my family after I file bankruptcy?

No. In fact, nothing could be further from the truth. The minute you file bankruptcy, the Bankruptcy Court issues an injunction called the Automatic Stay. This is an order to all creditors prohibiting the commencement or continuation of any collection action. No phone calls. No letters. No bills. No collections. No lawsuits. No garnishments. No repossessions. No foreclosures. Nothing.

A creditor’s violation of these prohibitions may be considered contempt of court and punished accordingly.

Is it true that only deadbeats file bankruptcy?

No. Most of the people who file bankruptcy are good, honest, hard-working people just like you and me. They file as a last resort after months or years struggling to pay the bills that are left over from some life-changing experience, such as a divorce, the loss of a job, a failed business venture, a serious illness, or some family emergency. Sometimes they honestly and mistakenly fell into debt at a young age before they knew better. Before they knew anything about budgeting or how to manage money.

What happens to the person that co-signed on my debt?
Lets assume that we are talking about a house owned by both the debtor wanting to file a bankruptcy and his fiancée. Chapter 7: The debtor’s obligation to pay the mortgage will be discharged in the chapter 7 bankruptcy. He has the option to reaffirm the debt which will reestablish a personal obligation, but he doesn’t have to. Fiancée is now the only one required to make the payments but as long as she is current, the mortgage company has no reason bother her. The mortgage company wants the money, not the house. Chapter 13: In a vast majority of chapter 13 payment plans, the mortgage will be paid through the trustee. This allows the court to stay involved in the protection of the debtor. Part of that protection includes preventing creditors from continuing to collect from the co-debtor fiancée. The court wants to stop creditors from indirectly pressuring the debtor. As long as you are making the payments, as required by the payment plan, the co-debtor stay protects the fiancée in the same way that theautomatic stay is protecting the debtor. Also, the debt may not be reported as being in bankruptcy for the non-filing fiancée because that person did not file bankruptcy. Creditors will often report an account as being in bankruptcy for both the debtor who filed bankruptcy and for the non-filing co-debtor. The account should not be reported as being in bankruptcy for the non-bankruptcy filing debtor and this situation can usually be fixed with a letter to the credit reporting agencies.
Will bankruptcy ruin my credit for 10 years?

No. You are getting 2 completely different concepts confused with each other. You are getting the fact that a chapter 7 bankruptcy is reported on your credit report for 10 years mixed up with the effect that reporting will have on your credit. Just because something is reported on your credit report does NOT necessarily mean it will have a negative effect on your credit standing.

First, let’s get one thing out in the open. By the time you need to make an appointment to see a bankruptcy attorney your credit is already messed up or maxed out…or both. This being the case, you have no credit for bankruptcy to hurt.

Bankruptcy gives you the opportunity to start over and leave any mistakes or other problems in the past.

If you have not re-established good credit in 2 to 4 years after you file bankruptcy it most likely has nothing to do with the fact that you filed bankruptcy and it certainly has absolutely nothing to do with the fact that your credit history still shows an old bankruptcy.

Will everyone know that I have filed for bankruptcy?

No. Unless you’re a prominent person or a major corporation and the filing is picked up by the media, the chances are very good that the only people who will know about a filing are your creditors and the people who you tell. While it’s true that your bankruptcy is a matter of public record, the number of filings is so massive, that unless someone is specifically trying to track down information on you, there is almost no likelihood that anyone will even know you filed. However, telling someone that someone else filed bankruptcy is good gossip just like telling someone you heard so-and-so is getting a divorce. So if you don’t want everyone you know to know you filed bankruptcy you need to keep the information to yourself. As for newspapers, my experience is that most papers don’t include information about who filed bankruptcy and even if they did…think about it….who would be interested enough to read that stuff.

Will filing for bankruptcy hurt my credit?

No. By the time you come to a bankruptcy attorney your credit is already either messed up or maxed out. And if it’s already messed up or maxed out how can bankruptcy hurt it?

The big surprise for my clients is when I tell them that filing bankruptcy can actually help them re-build their credit. Bankruptcy gets rid of debt and getting rid of debt puts you in a better position to handle new credit, if only someone will give it to you. Therefore, bankruptcy can be the first step in the process of re-building your credit.

We normally see people’s credit score increasing 50-100 points in the first 12 months after filing.

Will I ever be able to borrow money again?

Yes. Filing bankruptcy gets rid of debt and getting rid of debt restores your ability to make payments and this makes you look more attractive to would-be lenders. You will, unfortunately, be getting credit card offers again sooner than you would think. I say “unfortunately” because I don’t want you to get right back into debt again. At first, the would-be lenders will want more money down and will want to charge you higher interest rates. However, if you take advantage of this fresh start and are careful, and keep your job, and start saving money, and pay your bills, and do things that will put good marks on your credit report….the quality of your credit will get better and better. Generally, if a client has not re-established good credit sufficient to buy a car or even a house in 2 to 4 years, it’s not because they filed bankruptcy. It generally means that something else has happened after the bankruptcy to hurt their credit.

Will I lose my property?

Not likely. The fact is most people who file bankruptcy don’t lose anything.

First, while laws vary from State to State, every State has exemptions that protect certain kinds of property. Using Missouri as an example…..there are exemptions to protect such things as your house, your car, your truck, household goods and furnishings, IRAs, retirement plans, the cash value in life insurance, wages, and personal injury claims. There is even a “wildcard” exemption of $600 per person that can be applied wherever you want it. In those rarer situations where you have more property than can be protected by available exemptions…there is Chapter 13. In Chapter 13…you can even keep this property by setting up a payment plan with the Trustee and the best part is that the court will continue to protect you from your creditors as long as you are making your payments.

Second, filing bankruptcy does not generally wipe out liens. Therefore…if you want to keep a car, truck, home or business equipment that serves as collateral for a loan….you need to keep paying on the debt. If you make these payments and have exemptions to cover any value above what is owed….you can rest assured you will be able to keep these items.

Will I still be able to own property?

Yes. You will retain all of the same rights to own property that you have now. In the future you can buy, own and possess whatever you can afford.

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