Below are some of our most frequently asked questions. We provide comprehensive support to our clients. It's important for you to know that your case is unique. Talk to us about your options. Let us provide you with the legal service you need to get back on track financially.
1. What is bankruptcy?
Bankruptcy laws are simply the way for debtors who owe too much debt to be relieved of such debt, giving the debtor a "fresh" financial start. Bankruptcy law is Federal law, thus trumping usage of all state collection laws used by the creditor throughout the country. Some form of bankruptcy laws have been in existence throughout most of American history.
2. Why should I file bankruptcy?
You should consider bankruptcy because bringing about the orderly and final resolution of your existing debts in a timely manner is the step to take toward a financial fresh start. The question to ask on whether the bankruptcy laws are for you is this: "Am I in a position right now with my debts that I cannot realistically pay these debts off in a reasonable amount of time on my own or do I need the Bankruptcy Court to step in and help me out?"
If you want the Bankruptcy Law's help, then the Law wants to help you. The Law was written as a "consumer protection" law aimed at helping individuals resolve their debts in a timely and orderly manner.
3. Why not use debt settlements programs by debt counselors or credit counselors?
Certainly, a way to address your debts is through such programs, but you should know that the Bankruptcy Laws are more powerful in the end. Debt reorganization by these agencies cannot guarantee you a successful outcome. First, they may not be able to negotiate better payment terms with your creditors. Second, even if such terms are negotiated, there is no guarantee that the creditor will continue to honor such terms and not proceed with a collection suit resulting in the garnishment of wages. This would effectively end your debt repayment plan with them. You now have perhaps lost all of the money you have been paying in such a plan with no final resolution of the rest of your debts.
4. How is the Bankruptcy Law more powerful?
If you qualify for Chapter 7, then the Law will "discharge" all of your debts immediately, providing you with an instant fresh start. You will often find that some creditors will want to extend your credit again because you no longer owe your prior debt and you cannot file a Chapter 7 again for 8 years. No credit counseling can provide you such immediate relief.
Chapter 13 bankruptcy repayment plans will not provide you the complete and immediate relief that Chapter 7 will, but it will guarantee you a final resolution with all your debts, payment of usually less than 100% of those debts, elimination of interest accrual immediately, and that no creditor, despite how they are being paid in your Chapter 13 plan, can just decide not to participate anymore and start a collection lawsuit against you to garnish your wages.
Please know that the above statements are a general review of the Bankruptcy Law for Chapter 7 and Chapter 13. There are certain debts that cannot be discharge in Chapter 7 or Chapter 13. Specifically, these include certain debts involving fraud, drunken driving, and domestic support obligations, to name a few. Only after you meet with a qualified bankruptcy attorney can you know for sure whether certain debts are dischargeable under the Bankruptcy Laws.
5. How difficult is the bankruptcy process?
For most debtors who file, the process is really not that difficult. Preparing your papers and preparing you for Court takes only around 2 to 3 appointments with a lawyer. The Court hearing itself is not normally in front of a judge but rather another lawyer appointed by the Court to ask you a few standard financial questions. The hearing normally lasts only 10 to 15 minutes, and you are free to leave.
6. Why do I hear so many negative things about bankruptcy?
Because there are many people on radio, television, and the Internet, not to mention people you may know, who provide misinformation for normally 3 reasons, you hear negative things.
• Someone wants to steer you away from bankruptcy because it helps their business
• Someone wants to say they know about bankruptcy and to tell you "bad things" so they appear intelligent or knowledgeable
• And finally people who are well meaning but simply do not know enough to provide you accurate information.
7. Where can I go to get accurate information?
A lawyer. Only attorneys are qualified to provide you with a complete discussion about the bankruptcy process in your city and provide you legal advice on your specific case. Further, you should consult with lawyers who "concentrate" their practice in the bankruptcy field as this is the only way for sure a lawyer can provide you the most up-to-date and competent legal advice.
8. What is my next step?
If you want to know more about your rights under the Bankruptcy law, then contact our office for an initial consultation with an attorney. You will meet and speak with him and being fully advised of your rights in this area.
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Myth #1: Everyone will know you filed bankruptcy.
No. Unless you are a famous person or a major corporation, chances are that the only people that know you filed bankruptcy will be you, your lawyer, your creditors, and anyone you tell.
Yes, all court filings are public records, but unless someone is specifically looking to see you have filed bankruptcy, that person is likely never to know.
Myth #2: You will lose everything you have.
No. In the vast majority of cases, the people who file bankruptcy do not lose anything except their debts. Under the bankruptcy law, and specifically here in Ohio, the law provides "exemptions" which allows you to keep most, if not all, of your property. And even if you are a case where the "exemptions" do not protect all of your property, you might be eligible to file a Chapter 13 bankruptcy that will protect all of your assets.
Myth # 3: You will never be able to own anything again.
No. As indicated above, the majority of people who file bankruptcy do not lose any money or property. And once your case is completed, you can then begin to acquire new items of property (cars, etc.) as before you filed for bankruptcy.
Myth # 4: You will never be able to have credit again.
No. Sure, a bankruptcy can be reported for up to 10 years on your credit report, but creditors will want to do business with you because that is how they make their money. Filing bankruptcy eliminates your debt. In their eyes that puts you in a better position for handling future debt in a way that you could not before the bankruptcy.
Of course, whether you are approved for credit is based on a variety of factors including, but not limited to, your income level and what you have done since the bankruptcy. That being said, many former bankruptcy filers report that they are offered credit soon after their bankruptcies were completed. Acquiring new debt is not always a good thing, of course.
Myth 5: If you are married, both spouses have to file or it will hurt my spouse's credit.
Not true. If only one spouse is in debt, there is no reason for both spouses to file. The bankruptcy filing of one spouse WILL NOT affect the credit of the other spouse.
If the majority of debts are in both of the spouses' names, then it might make sense for both spouses to file a joint bankruptcy. This is often the case when couples anticipate a divorce. Before the divorce proceedings begin, the couple files a joint bankruptcy case to resolve their debts.
Myth 6: Only “deadbeats” file for bankruptcy.
Not really, most of the people who file for bankruptcy are good people who suffered a setback in life that can happen to anyone such as a divorce, job loss, serious illness, failed business, an unexpected family emergency, or those who fall into debt when very young. The Bankruptcy Court is aware that this is what causes most cases. The courts and the law are understanding on the realities many people face today.