Frequently Asked Questions Regarding Bankruptcy

Sep 23, 2015 by

Frequently Asked Questions Regarding Bankruptcy

If you find yourself unable to pay your bills, it’s likely you will have questions about filing for bankruptcy. Jim Gold and Norma Hammes are happy to provide you with information about some of the most commonly asked questions.

Should I start a debt management or credit counseling plan instead of filing for bankruptcy?

Many people turn to a debt management or credit counseling firm when they can’t afford to pay their bills. These agencies often charge expensive up-front fees and high monthly payments that are supposed to go to the creditors to repay the debt. Unfortunately, the debt management company sometimes keeps the money instead of paying off the debt. Throughout the years, we have counseled many people who have used these agencies and then were sued by a creditor they thought was being paid by the debt management company. So, after wasting thousands of dollars, they hired us to get them the relief they really needed.

My wages are being garnished by a credit card company that sued me. Is it too late to file bankruptcy and stop the garnishment?

No, it is not too late to file a bankruptcy and stop a garnishment. In some cases, you can receive a refund of some of the money that was recently garnished.

If I still owe money on my car, can l keep it if I file for bankruptcy?

The threat of repossession is a scary matter and a concern for many of our clients. If this is the case for you, filing for a Chapter 13 bankruptcy may be a good option for you. Chapter 13 can protect you from repossession and excuse you from catching up on past due payments. The vehicle loan is paid through a Chapter 13 plan over up to five years and can often reduce your interest rate and monthly payments.

I owe income taxes. Can I wipe out taxes I owe to the government?

Sometimes you can wipe out older taxes and some tax penalties. Newer taxes that can’t be wiped out can be included in a Chapter 13 plan that stops the Internal Revenue Service and state Franchise Tax Board from garnishing your wages, provides for their repayment, and often stops interest and penalties from accruing on them.

Do I need to spend all of my retirement funds and other savings before I can file bankruptcy?

No, you do not. It is normal for people to not want to file bankruptcy. In an effort to avoid bankruptcy, they often will resort to selling stocks, withdrawing money or borrowing against retirement plans, borrowing money from friends or relatives, or getting a second or third job to pay bills. Usually they don’t even consider bankruptcy until most of their limited assets are used up. If this sounds like you, don’t wait any longer. Please contact us for a free consultation before you use up all of your retirement money or other assets; we can usually protect those assets if you file for bankruptcy.

I filed bankruptcy a few years ago, and now I have more bills I can’t afford to pay. Can I file bankruptcy again?

Contrary to what most people hear, yes, you can file bankruptcy again. However, there are some complicated restrictions on filing another bankruptcy case, and we advise you to consult with an experienced bankruptcy attorney about your particular situation.

I’m worried that I can’t afford to hire an attorney so I don’t even want to call one. How can I get help?

Many people think that they cannot afford to hire a bankruptcy attorney to help them. However, the risks and penalties that go along with filing bankruptcy papers incorrectly – without an attorney – can cost you much more than you can afford to lose. If you choose to hire a non-attorney bankruptcy petition preparer, also referred to as a paralegal, later on you may end up having to hire an experienced bankruptcy attorney anyway, and by then, you may have lost vehicles or a house that an attorney could have protected. Over the years, Norma and Jim have taken over many cases for people who did not have an attorney. These cases were in serious trouble, and because the papers had been filed
incorrectly, several cases had homes that were on the brink of being sold by the Chapter 7 trustee.  We were able to file corrected bankruptcy papers and save the homes for the homeowner.

How much does it cost to file a bankruptcy case?

Fees to file a bankruptcy case depend on which type of bankruptcy is being filed and what debts, assets, and income you have, and do change from time to time. However, here is a general idea of how much the fees are.

  • Our first consultation is free, and we encourage you to contact us for a specific assessment of your case and a clear description of your options and their costs.
  • The court charges a filing fee of $310 for a Chapter 7 and $335 for a Chapter 13. The court increases this fee every few years.
  • Court-required credit counseling certificate is about $20.
  • In addition, the Debtor education (or Financial Management) session and certificate fee is usually about $20 per person.
  • For Chapter 13, our fees for our services are based upon a schedule set up by the bankruptcy court, with most fees included in a monthly payment plan. For a consumer case (if you do not operate your own business), the portion of the fees you pay up front prior to the filing of the case is usually about $100 to $800. If you operate your own business, the “up-front” fee may be higher than that.
  • For Chapter 7, our fees for our services are based upon the complexities of your individual case. A typical consumer case with no house, no taxes, no car loan would usually be about $1,000. However, we try our best to make our services affordable to everyone who needs them.

Jim Gold and Norma Hammes are Certified Bankruptcy Law Specialists who have helped thousands of people file for bankruptcy. If you have more questions about filing for bankruptcy or the bankruptcy process, please visit our website or contact us for a free and confidential consultation. Norma will meet with you personally, listen to your situation, and advise you of your best possible solutions.