Get Out Of Debt

Bankruptcy FAQ

How much will Bellevue bankruptcy cost me?
Bankruptcy cases generally cost about $1000 and $2000 for a Chapter 7. While this is a good estimate, prices will differ depending on your situation and the type of bankruptcy that you file. A Chapter 13 is much more expensive because it take much more time and work.

Will I lose everything?
No you will not. Depending on the type of bankruptcy you file under, you may not lose anything at all. If you file Chapter 13 the bankruptcy court does not require you to give up any assets. In a Chapter 7 the bankruptcy court will require you to give up any non-exempt assets, but with the help of a bankruptcy attorney most people who file bankruptcy must not give up any assets.

Will my creditors leave me alone?
They certainly will. Once you submit your bankruptcy petition, your creditors will no longer be allowed to try to get money from you. This happens because the bankruptcy court will send an automatic stay to all your creditor on your behalf. This automatic stay legally prohibits them from trying to contact you at all.

How will bankruptcy affect my credit score?
A bankruptcy can remain on your credit report for 10 years after you file bankruptcy. Most people are not approved for a mortgage loan for 2 – 3 years after they file bankruptcy. However, most people find that after 3 years the major effects of bankruptcy have greatly decreased.

What happens during bankruptcy?
Before filing bankruptcy, all debtors are required to complete a credit counseling course. This course can be completed in person, over the phone or online. Your attorney will help you sign up for it.

Your bankruptcy attorney will then help you get the necessary paperwork together so that your request is filed correctly with the bankruptcy court. Once you have filed, an automatic stay is put into place. This prohibits your creditors from contacting you anymore.

You will then prepare a list of all your assets and debts. Your assets will be divided into two groups, exempt and non-exempt. You will keep all your exempt assets and your attorney will protect your possessions by making them exempt. You will bring this list to a meeting with your creditors and a trustee appointed by the bankruptcy court. The trustee will take your non-exempt assets and sell them. The money raised will be payed to your creditors. The rest of your debt will be discharged.

All you have left to do is take a personal financial management course that can also be completed in person, by phone or online. After that you are living your new debt-free life!

Any person in their right mind does not want to file for bankruptcy protection. Having a root canal is several levels about that in terms of “things I want to do”. One of the big problems is that when someone finally gets around to admitting that their financial situation is so far down the wrong road that it is out of control, it’s almost too late. The decision to file bankruptcy or consider bankruptcy should have been made, with any foresight at all, at least 2-3 years earlier in most cases.

Sometimes the financial burden may have come about very suddenly, like a major medical expense that was not unexpected, or a job layoff with trouble finding a replacement job for an extended period of time.

There is no hard and fast rule about when a person should file bankruptcy. It varies from individual to individual, and every situation has its own specific quirks, so that one can say definitely that “one size does not fit all”. But one of the problems that happens when one starts looking to bankruptcy as a way out of their financial difficulties is that very traditional thinking starts to set in.

Traditional thinking about bankruptcy says that bankruptcy is an “easy way out” of one’s financial difficulties and overloaded burden of debt. You just file, the slate is wiped clean, and then life goes on, right? Dead wrong, especially with the new bankruptcy laws, which still vary widely from state to state. The new bankruptcy laws make it much more difficult to file for bankruptcy than it ever was in past years, and it is no longer just a quick trip to the courthouse with a couple signatures.

Today’s bankruptcy laws make filing bankruptcy a much more invasive procedure, where they look at every nook and cranny of your life and your finances to determine why this happened and what type of bankruptcy you are required to file. Bankruptcy used to be something that you could, with a good deal of study and patience, do yourself without the assistance of a bankruptcy lawyer, but that is no longer the case. The laws are now so complex that attempting bankruptcy without an attorney’s help would be foolish, as well as probably taking almost twice as long to accomplish, since if you incorrectly file one of the mountain of forms, you get sent back to square zero to start from scratch.

But is bankruptcy really necessary? In other words, what alternatives and options have you thoroughly looked into? Oh, you haven’t? Shame on you. Filing for bankruptcy protection is going to have long lasting negative effects on you. For example, it will appear as a huge red flag on your credit report for 7 years or more. Credit will be hard to come by, and when you are granted credit, the interest rate will be much higher than you have ever seen it before, because now you are labeled as a high credit risk.

One of the very viable bankruptcy alternatives is a debt consolidation loan. They don’t actually hand the money to you though. Rather, they take your outstanding and overdue accounts, and you pay one monthly payment to them, which they in turn divide up to send to your creditors. Your creditors are happier than they’ve been in years because now timely payments are being made, and you credit rating does not hit the skids, at least not completely, because you were able to avoid bankruptcy.

Check your alternatives and options before making such a critically important decision as filing for bankruptcy. You always have options, and the key to successful living is to acquire the knack for choosing the right one.

If your HOA is trying to force a foreclosure on your condo or townhouse due to unpaid association fees, then it may be likely that they have a lien on the property. This may have been the result of some type of confession of judgment if you ever fell behind or due to the association suing you in civil court. Otherwise there may be some clause somewhere in your HOA paperwork that lets them sue you for a foreclosure if you fall behind on the association dues.

Either way, the HOA is attempting to collect the amount of money they are owed by you for utilizing the services of the HOA (such as they may be). Because you have been unable to pay them for whatever reason, they are now trying to sue you and request that the courts auction off your property to satisfy the unpaid fees. Even if the arrears only amount to a few hundred or thousand dollars, it is quite easy for creditors to force a foreclosure on a large asset such as a property – do not stop worrying just because the HOA fees may be such a small dollar amount.

Bankruptcy, when you file it, stops the collection of any debts you include in the bankruptcy filing until the debts are either discharged or you begin a legal payment plan through the courts. So, the HOA will have to halt any collection efforts if you file Chapter 13 bankruptcy, as long as you include your HOA debt in the petition. You are seeking legal protection from your creditors, and all of them, including the Homeowners Association, must stop trying to collect as long as the issue is in the bankruptcy court.

Thus, the HOA is acting to collect a debt that they are owed by pursuing foreclosure against you. Filing bankruptcy will force them to put their foreclosure process on hold until you work out an arrangement with them. In most cases, you will have to enter a 3-5 year payment plan through the court system to pay back the unpaid fees. If you make it through the plan, then you will have no worries about them foreclosing on the house because you will have paid back any amounts that you were behind. Not being behind means that there is no reason for foreclosure.

But, if you fall behind on the bankruptcy payments, the HOA can have the debt taken out of the filing and have the automatic stay released and begin foreclosure again from the point at which they left off before the bankruptcy. As well, you will be responsible for your regular HOA dues, in addition to the portion you are paying through the court payment plan. Therefore, it is a waste of time, not to mention severely damaging to your credit, to file Chapter 13 if you are unable to afford the regular payment plus a portion what you are behind.

You should probably consult with an attorney or other financial adviser to make sure you are doing everything correctly and work out a budget so you do not fall behind on the payment plan. Although it is possible to file bankruptcy on your own, there are many reasons why it may be a better idea to rely on professional legal advice during such a potentially stressful time. Foreclosure situations, whether they are from the original lender or another party such as the HOA, almost require outside assistance, even if just to make sure you have been as careful as possible and will not have your solution thrown out on a technicality.

If General Motors were to file bankruptcy, it could change the world or would it? Yes a GM bankruptcy filing would change the world. Right now with all the over regulation it is amazing that any company can make money these days. I guarantee such a move would change the world. It would definitely wake up the Unions and the governments over regulation on our economic engine. In fact sometimes it seems we do everything to hold down our economy from screaming forward.

With all the over regulations in this country to start, grow and run a successful small business, medium size corporation or a multi-national conglomerate based in the US. Why do we attack and use regulations to slow down our economic might? Because folks it is the way it is deliberately set up. You see at every level we have placed rules and bureaucracy to slow ourselves.

The largest corporations in the World are constantly being bombarded by rules and regulations put in place by regulators and politicians. So they are forced to move the operations out of the country to reduce costs, raise prices and pay off all the politicians you can find, no matter what side, fund them, as you will need them just to do business in this nation.

It is interesting the talk now after the 3rd quarter loss at General Motors and how they may sell off GMAC. Right now with the housing boom getting ready to pull back and some over extended upside down foreclosures due to job losses in the downturn of the business cycle, that might not be a bad idea actually. It seems GMAC is going to have its own issues.

The Delphi Bankruptcy deal is a problem indeed, I too worry about the under funded pension costs and these out of control health care costs, as for a company like GM these are problematic issues to say the least. It is good that the Union has been cutting a little slack at GM these days. Ford is next and lay offs there will be big indeed.

Indeed a bankruptcy at GM would change the world, but why do we need such a strong signal as a wake up call when it is obvious that we need to fix the problems that are right their in front of us. We all should be thinking here, as all of this effects us one way or another and China is not getting any smaller so we better get on the stick and take care of business in real time. Think on this.

Bankruptcy is a legally declared inability of an individual or organization to pay creditors. During the course of a bankruptcy, a debtor may ask a court to dismiss the case. If the court finds that dismissal will not harm the creditors, ordinarily a court will grant a petition to dismiss a Chapter 7 or a Chapter 13 bankruptcy.

There are several reasons a debtor may prefer to file a Chapter 13 bankruptcy petition. The reasons include the debtor wishes to resolve certain debts that may not be discharged in a Chapter 7 bankruptcy. The debtor may also wish to protect certain cosigners on personal loans from being pursued by creditors for repayment or feels obligated to repay certain debts. The debtor may believe that future creditors will look more favorably on Chapter 13 reorganization than a Chapter 7 discharge. A debtor may be required to file a Chapter 13 bankruptcy if he or she has received a Chapter 7 bankruptcy discharge within the prior six years, or obtained a Chapter 13 bankruptcy discharge within the prior six years and has not paid off at least 70% of the unsecured debts and was subject to the discharge of a prior Chapter 7 or Chapter 13 bankruptcy filing within the prior 180 days, because the debtor violated a court order, or requested dismissal after a creditor sought relief from the automatic stay.

After filing a Chapter 7 bankruptcy petition, some debtors discover that they are better served by pursuing relief under Chapter 13. By filing an appropriate motion with the bankruptcy court, the debtor has an absolute right to convert the petition to a Chapter 13 filing, if the debtor has not previously converted a Chapter 7 bankruptcy to a Chapter 13 bankruptcy, and the debtor’s estate qualifies for Chapter 13 relief.