The Bankruptcy Center
What Is Bankruptcy?
Bankruptcy is Federal Law that eliminates all or most debt; the idea is to get a fresh start in Chapter 7 bankruptcy or repay some debts over time in Chapter 13 bankruptcy. Both types of bankruptcy require an appearance by the individual in a hearing room about one month after filing the case. A Chapter 13 payment plan usually lasts three to five years.
In a 7 or a 13, the court papers include a complete list of debts, names and addresses of Creditors, income, and other information about finances. The Chapter 7 court fee is $306; $281 in Chp. 13.Chapter 13 can help a debtor keep assets, your house and your car while catching up late payments.A Chapter 7 is quicker and less expensive, but is not always the best choice.
Chapter Seven: In a typical Chapter 7 bankruptcy all medical bills, credit cards and signature loans (except student loans) are completely eliminated. It is common to continue making payments on (and keeping!) a home, car, television, washer/dryer, etc.
Chapter Thirteen: Although a Chapter 7 is quicker and cheaper, there are limits on how much property and possessions you have and household income.
You probably need to file a Chapter 13 if…
- You have more than $15,000 in equity in your home, or
- You have more than $4,000 monthly household income, or
- You are so far behind in payments on your house and car
that you need a court approved plan to catch up.
Under Chapter 13, none of your possessions can be taken by the bankruptcy court. The payment plan is basically a court-approved budget—you keep enough to live on and the rest is paid to Creditors by the Bankruptcy Trustee. Some Creditors will likely receive full payments (e.g. car payments) while others may receive only pennies on the dollars owed them and have the rest wiped out when the plan is completed (e.g. credit card debts).
To file a Chapter 13 bankruptcy, $700 is required to file ($419 attorney fees + court costs of $281). The balance of the attorney fees are paid in installments under the Chapter 13 bankruptcy plan.
Will Bankruptcy Take All My Possessions?
Under Bankruptcy law certain possessions are “exempt property” and cannot be taken by bankruptcy court or the bankruptcy trustee.
For example each debtor can claim as exempt: Household Items—up to $3,000; Vehicles—$3000 equity; Homestead—$15,000; Jewelry—$500 (up to $1500 with wedding rings). The head of the household gets an extra exemption beginning at$1,250 for one child and $350 for each additional child. There are many other exemptions available. (Jan 2014 exemptions used).
At The Bankruptcy Center,our attorney will scrutinize your papers for youreligibility for exemptions and potential problems .
My Car Is Worth $6,000? Do I Lose It? Can they take my car or truck?
Frankly, banks and creditors are usually much more interested in the money and the interest you pay them than in repossessing your car, refrigerator or foreclosing on your house and most will willingly work with you in a Chapter 7 or 13. However, in a Chapter 7 you do have an option to surrender the collateral to the bank or Creditor and owe them nothing.Sometimes creditors may be willing to negotiate a reaffirmation (or even a buyout) for a lesser amount rather than take back the item.
Bankruptcy law looks at your equity in a car, i.e. the difference between the car’s current value and any loan(s) against it. For example, if your car is worth $6,000, but you have a loan with a $5,100 payoff balance, your equity is only $900. ($6,000 minus $5,100 = $900). The court will not take the car.
However, bankruptcy does not automatically eliminate lien holders (banks or lenders) from repossession claims against the collateral—meaning you cannot ordinarily keep the car, house etc., in a Chapter 7 unless you continue making the payments by signing a written reaffirmation agreement. However, if you fall behind after the bankruptcy reaffirmation, the Creditor may be able to repossess the car or refrigerator, sue you, or even foreclose on the house.
In a Chapter 13 Bankruptcy there are no reaffirmation agreements, however, a debtor is not required to give up any of their possessions. The repayment plan can be as little as 10% of some debts, although many plans will require payment of a higher percentage.
What About Creditor Harassment & Garnishments?
On the day you file bankruptcy, all garnishments, collection actions, pending lawsuits and foreclosures etc. (except child support) must stop as a matter of law. As a practical matter, however, it can take a week or more before the creditor learns that you have filed since the Bankruptcy court will send notices to all your creditors by mail or e-mail.
If there is a garnishment running against your paycheck the Bankruptcy Center can help you get it stopped promptly after filing—we will gladly fax a copy to your payroll department or the Creditor’s attorney demanding they stop the garnishment.
If you hire our attorney at The Bankruptcy Center to represent you, we will accept calls from your Creditors before you file and advise them of the status of your bankruptcy . Most Creditors will stop calling you or your work after they have spoken to us. We require at least $100 down before we provide this service.
Any Common Problems I Should Know About?
Chapter 7: Using a credit card, store charge, taking cash advances, making a balance transfer, or running up any debt shortly before filing bankruptcy.
If a Creditor can prove that a debtor in bankruptcy never intended to repay a charge that was run up before filing, the Creditor may file an adversary proceeding to require the debt to be repaid in full. Think of it as “bankruptcy credit fraud.” If you are thinking about bankruptcy, stop using credit cards.
The larger the amount and the more recent it was incurred,the more likely it is that a creditor could win. For example, a $4,000 cash advance four months before filing with no payments before filing is asking for trouble.
Repaying a relative a loan before bankruptcy or suddenly transferring property or possessions before filing (especially at reduced prices, or for free)
The Trustee may sue the relative requiring them to repay the money to the court or turn over the item! You may repay the relative after bankruptcy. this is less frequently a problem in Chapter 13 bankruptcies.
Chapter 13: You must have enough money to set up a plan and then set aside the amount you promised to give to the Trustee each month. You may have to show proof of payments. You cannot incur any additional debt during the plan except by request and court approval.
How Does the Court Hearing Work?
Every bankruptcy case requires an initial hearing (a “§341” or “creditor’s meeting”). The meeting is conducted by a “Trustee” (an attorney appointed by the court to review cases). The Trustee usually questions the Debtor(s) for about six minutes, basically repeating several of the questions already answered on the papers filed with the court. A second hearing is held for Chapter 13 cases to confirm the repayment plan, but the debtor attendance is not usually required.
An example: In a Chapter 7 creditor’s meeting, the Trustee usually asks: “Do you still live at the address listed on your bankruptcy papers?”
“Do you have any claims or lawsuits against anyone for any reason?”“Are there any other assets that you didn’t list on your bankruptcy forms?”
In a Chapter 7 case, Creditors have 60 days from the creditor’s meeting to file claims or dispute the bankruptcy. If no claims have been filed after the 60 days the Debtor receives a “Notice of Discharge” and final closing papers in the mail.
In a Chapter 13 case, the debtor will begin making regular payments immediately upon filing and continue until the plan is completed, halted for non-compliance, or other legal reason.
Can Anything Go Wrong at the Hearing?
If the Trustee learns of assets, possessions, or items of value that were left off the bankruptcy papers, the Trustee could make additional inquiries. If there is an asset that is not exempt and not subject to a lien by a creditor, the Trustee, in a Chapter 7 case, could take action to seize the item and sell it. If the Trustee thinks there was deliberate fraud by the Debtor, there could be a forced dismissal of bankruptcy or even criminal consequences.
Creditors may appear at the Chapter 7 bankruptcy hearing and question a debtor. If a Creditor uncovers a fraud the Creditor could file papers with the court to try to get the debt excluded from a Chapter 7 bankruptcy. Some creditors come to Chapter 7 cases and make arrangements to pick up any items the Debtor is surrendering.
Creditors rarely attend a Chapter 13 bankruptcy hearing.
What Will Bankruptcy Do to my Credit Score? Should I file bankruptcy?Are there other options?
Bankruptcy can stay on your credit report for ten years. It will probably be a factor almost anytime you apply for credit for several years after you file bankruptcy, but usually does not prevent someone was steady income from incoming a car loan. If you have any real choice, we suggest that you not file bankruptcy. Consumer Credit Counseling may be able to help you privately set up a budget.
However, for people who have no other good choice, bankruptcy can actually make them a better credit risk and, therefore, more likely to get some kinds of credit. Why? For people who need to file a Chapter 7 bankruptcy, their credit report would probably show late payments and unpaid balances on a great many accounts. Any creditor reviewing their credit report would reject the applicant as a poor credit risk–i.e… too many bills, not enough money to pay them, and likely to go bankrupt. After filing a Chapter 7 Bankruptcy a person’s chances of repaying a creditor are improved because:
- No more extra monthly bills to pay (just the usual rent/mortgage, utilities, food–perhaps a car payment);
- They cannot file a Chapter 7 again for about six years and would have a difficult time avoiding collection proceedings;
- If the loan is secured by collateral, (a car, for example) the creditor can always repossess the car or collateral.
However, no one will give you credit after a Chapter 7 or 13 bankruptcy if you have no way of paying the bill. For example, if, after bankruptcy, you are employed part-time for only the previous three months, that isn’t the sort of steady and stable income that shows a creditor you could pay them off.
In a Chapter 13, the Debtor(s) cannot incur any additional debt during the plan. Successfully completing the plan greatly improves the chances of getting credit as all unmanageable debt is eliminated.
What About Co-signers?
Once a Chapter 7 or 13 bankruptcy case has been success-fully concluded and a debt is discharged, you (and your spouse if you filed jointly) can no longer be held liable for that debt. How-ever, any co-signer or person jointly responsible for the debt remains liable for that debt—the creditor can still try to collect from them.
Are There Any Debts I Can’t File On? Do I Have to List All My Debts?
Whether you file a Chapter 7 or 13, you must list every creditor and claimant against you even if you will still owe the debt after bankruptcy (child support, for example).
Chapter 7 reaffirmation agreements are worked out after filing. Of course, some people will pay a debt even after listing it in the bankruptcy.
For Examples: You might repay your doctor so she will keep providing services, or repay a loan from a close friend. If your Mother co-signed a debt, you might pay, rather than have the creditors collect against her.
If you have a zero balance on a charge you are not required to list it in bankruptcy. If you are filing a Chapter 7, the account might even be kept open and could help re-establish your credit after bankruptcy. (This credit option is not available in a Chapter 13 because no additional debt may be incurred during the repayment plan). (Tip: Don’t pay off an account over $600 just before filing bankruptcy—it usually creates a problem).
For car accidents you must list the driver, vehicle owner and any passenger who might make a claim against you even if you believe that you were not at fault.
Most income taxes owed; alimony or child support payments; restitution and fines; drunk driving accidents and nearly all government guaranteed student loans are not discharged in a Chapter 7.
In a Chapter 13, the plan arrangements cover all repayments and can provide for payment arrangements on some debts that are not dischargeable in a Chapter 7 bankruptcy.
How Do I Get Started?
Send your completed online bankruptcy evaluation form or schedule a Consultation at The Bankruptcy Centerat 3827 Gustine, St. Louis, MO 63116. Our attorney will review your forms and write you a e-letter( E-mail) analyzing your situation.
Specifically our attorney will advise you if there are any problems regarding your income, your possessions, your exempt property and whether a Chapter 13 might be best for you. We will also explain the next steps and provide additional instructions.
We prepare all the necessary forms and file the case at court. An office visit is preferred, but Skype ™ consultations are possible, as well as phone conversations without video. An attorney will represent you and be with you at the first-scheduled 341 meeting of creditors hearing, except in cases of emergency.
You may schedule a consultation with our attorney if you plan to hire the attorney or if you are undecided. The fees are the same.
Prices for Chapter 7 Bankruptcy
Starting at $694 attorney Fees for Qualifying individuals plus Court Costs of $306.
The Bankruptcy Center wants you to have a price that you can rely on: we have a simple goal, to match the legal services you need with a fair price for quality representation.There will always be someone cheaper, but we will not surrender quality for low cost poor service.
Additional legal services affecting the cost of the bankruptcy include reaffirmation agreements, surrender of personal or real property, and ongoing garnishments.There can be other factors that affect the price.
Prices for Chapter 13
A Chapter 13 case can be filed for upfront Payment of as little as $700.
The $700 covers $281 of court costs plus $419 of attorneys fees in advance against the total attorneys fees, that balance of the attorneys fees will be paid through the Chapter 13 plan. (Most individuals/joint filers will qualify for the $700 start up pricing). The Eastern District of Missouri (Jan 2014) currently has a flat attorney fee of $4000 or a lower, base attorney fee of $2300 plus amounts billed and approved by the court.
Attorney Fees + Court Costs = Total
Flat Fee: $4000+ $281= $ 4281
Base + Fee: $2300+ billed + $281=$ Varies
Prices are based on our attorney hourly billing rate of $200 per hour.
What Is The Bankruptcy Center?
The Bankruptcy Center™ is a trade name& DBA (“doing business as“) used since the 1980’s by Gary D. Bollinger, Attorney at Law, 3827 Gustine in St. Louis, Missouri63116-3523. Others have adopted variations: we’re the original and own the domain name of Bankruptcycenter.com (We registered before Google ™registered its name).
Telephone: 314 771-ATTY (314 771-2889)
(Local St. Louis)
Toll Free in 314 & 573 Area Codes:
Gary D. Bollinger Bachelor, of Arts(Cornell, 1976); Juris Doctoris(Washington University, 1979) is licensed to practice law in Missouri, Illinois and the local Federal District, including bankruptcy court and the Eighth U. S. Circuit Court of Appeals.
Mr. Bollinger has personally handled approximately four thousand Chapter 7 and Chapter 13 bankruptcy cases. He will personally review the initial papers you return to The Bankruptcy Center. He resides in south St. Louis and is a seventh generation Missourian.
The choice of a lawyer is an important decision and should not be based solely on advertising. (We reserve the right to refuse any bankruptcy).
Referrals are welcomed!