Am I Eligible to File Bankruptcy?
Am I Eligible to File Bankruptcy?
Everybody can file bankruptcy. There are two kinds of bankruptcies that are typically used by individuals Chapter 7 and Chapter 13. And so yes there are requirements that have to be met in order to file chapter 7 Bankruptcy. And they have to do primarily with your income. But even if you can’t file chapter 7 because you make too much money, Chapter 13 is eligible to everybody and both in chapter 7 and Chapter 13 you will receive a discharge. That’s really the reason you’re going to file bankruptcy is to obtain a discharge. It’s the discharge that protects you from your unsecured creditors, your unsecured creditors. Are companies like credit card companies, medical debts broken leases repossessed cars all of those debts will go away either in chapter 7 or in Chapter 13. Yes, it’s true in Chapter 13 you may have to pay back a portion of those debts. But for most of our clients even in Chapter 13 they’re paying back a very small percentage of those debts. So yes you’re eligible to file bankruptcy. Look all the things that you heard about in 2005 where they changed the bankruptcy laws they made it more difficult for people to file bankruptcy. There was a lot of hype in that that’s really not true. The laws in 2005 were targeted at a very small group of people to force them into Chapter 13 because Congress believed they could pay back a portion of the debt. But even if that were the case in your situation most of the time the portion of the debt that you have to repay is small.
Look if you take advantage of my free consultation and I know what your income is and I know what your household size is, I will be able to tell you with a relative high certainty right at the initial consultation. If you have to file Chapter 13 Here’s what you would have to repay to your unsecured creditors. It’s usually not very much and you will get a discharge order meaning that you won’t have to pay the remainder of that debt. So we urge you to come in take advantage of that consultation. We’ll show exactly what your options are. We’ll let you know if you qualify for Chapter 7 if you don’t qualify for Chapter 7 and you have to file Chapter 13 We’ll let you know what the chapter 13 payment is. So you’ll be able to make an informed decision.
How Quickly Can I Recover My Credit Score?
All of my clients want to know how quickly they can recover their credit score and so here is the answer. If you are proactive you can have a six eighty or six 90 credit score. Two years after we file the bankruptcy petition the way that you do that is you obtain a credit card immediately after we file. You start using the card responsibly and you only charge 50 percent of the limit on the card and you pay that off every single month. If you do that for two years you’re going to have a 680 credit score in two years.
As far as buying a car goes if you file Chapter 7 as soon as we receive the discharge which happens four months after we file every car dealership in this town is going to want to sell you a car and that’s because they know your debt to income ratio is perfect. They know you have a job. They know you don’t have any unsecured debt anymore. They know that you can’t file a bankruptcy petition for eight more years. So they’re all going to sell you a car. Now the interest rate four months after you file is not going to be great but you’ll be able to buy a car. The interest rate will be great in two years if you proactively rebuild. Here’s another myth that needs to be debunked about credit and bankruptcy. People think that the way to rebuild their credit score is with a car payment or with a house payment and it’s really not true. The credit bureaus know that a car payment is a necessity. They know a house payment is a necessity. So you don’t get a lot of credit on your credit score for making your car payment and making your house payment. They want to see you incur a debt that’s not necessary like a credit card debt and they want to see you pay it back every month and then they say OK this person knows how to utilize credit responsibly. So let’s give them some more credit.
How Do I Rebuild My Credit After Bankruptcy?
Well it might seem a little counter-intuitive but we tell our clients to immediately apply for a credit card. You can go to creditcards.com and get a credit card either unsecured or secured. So what a secured credit card is when you send the money to the bank that say you send them $500 and they put it on the credit card for you. It’s a prepaid card. The nice thing about that is it gets recorded. Ansari reported to the credit bureaus just like an unsecured credit card. So that’s what you want to do to rebuild your credit. You want to have a debt that looks like a loan. Anytime you have a credit card debt it’s a loan. Now contrary to popular belief. Making your car payment making your house payment those types of payments don’t get the big bumps in credit scores. That’s because they’re considered necessities and the credit Perrot’s credit bureaus don’t give you a lot of praise for making those payments.
You want to get a credit card after you file. You want to use it responsibly and responsibly typically means charging about 50 percent of the limit and paying that off every single month. And in three years or less you will have a 690 credit score again which is a big credit score. And that’s what the overwhelming majority of the people in this country have is a B-credit score.
How Do All Of My Creditors Know That I Filed Bankruptcy?
We’re going to prepare a bankruptcy petition for you that’s anywhere from 30 to 40 pages long. We do need your cooperation but we are going to compile an exhaustive list of all the people you owe money to. That is accomplished in a two-step process. I am going to buy the best credit report in the business. It’s a commercial grade credit report. It takes the list from all three of the major credit bureaus TransUnion, Experian and Equifax and puts it on one easy to read credit report that I’m going to give to you and then I’m going to ask you to look at that credit report and make sure that I know about anybody that you owe money to that’s not listed on that report. I’ll make sure everybody gets on the statements and schedules and then we have a computer program that puts together a mailing matrix that goes to the bankruptcy court the bankruptcy courts computer then generates a notice and sends it to all of your creditors very quickly.
So all of your creditors will know that you have filed bankruptcy. You’re under the protection of the automatic stay which means nobody can continue to contact you and eventually you will be receiving a discharge. So you won’t have to pay any of your unsecured creditors.
Be Careful Before Hiring An Out Of Town Lawyer
Be careful before you hire a bankruptcy attorney who doesn’t have his office here in Tucson Arizona full time. These out of town lawyers are attempting to come into Tucson through the Internet and get clients. Here are the problems with that. So he doesn’t have an office here full time. He only comes down to his office and there’s more than one. So and I say he they’re multiple. They only come down to Tucson when they have a potential new client that they’re going to see. Their office isn’t open all the time. Here’s the problem. You can’t walk into his office and ask him questions at any time you want. You can’t drop off documents anytime you want. I can’t tell you how many times my clients just walk in ask a question of my staff if I’m available I’ll answer their question or drop off documents to us make payments to us. It makes a big difference when you are when I’m here all the time. He’s out of town lawyers are charging fees that are extremely low. They’re making promises that they can’t keep.
Here’s the other problem. Many times they don’t actually show up at the 3:41 hearing. We have to go meet with the trustee at a hearing. Many times they’re calling me or another lawyer in town to cover for them. I don’t usually agree to cover for them but some of the other attorneys in this town do. And they know nothing about the case at the 3:41 hearing. The trustees don’t like it. They voiced their displeasure around it. They don’t like out of town lawyers. Be really careful before you hire an out of town lawyer
Be Careful Before Hiring A Discount Lawyer
Be really careful about discount lawyers who make promises like we’re going to file your bankruptcy case for $150 or we’re going to file your bankruptcy case for $165. Here’s what they’re not telling you, what they’re going to do for $150 is file the voluntary petition only there are a series of statements and schedules and a credit or matrix that have to be filed. The rules say there you have five days as a bankruptcy lawyer to file the creditor matrix and 15 days to file the statements and schedules. So they’re not going to file the credit or matrix or the statements and schedules for you for $150. They can’t. It’s impossible to do that and make a living. So what they’re going to do is say it’s $150 to file the voluntary petition and then it’s another eight or nine hundred dollars that you can pay me Post-petition maybe in payments to file the statements and schedules and they’re going to make sure that they get the majority of their money prior to filing those statements and schedules.
Here’s the problem if you don’t meet those deadlines the bankruptcy just dismisses the case. That happens all the time in those situations because people go to them give them a hundred and fifty dollars. They can’t meet the payment schedule. Then the bankruptcy gets dismissed and you get nothing. Not only that it shows on your credit report that you filed a bankruptcy petition even though you didn’t get your discharge. So now you have a blemish that shows you filed a bankruptcy petition and you still owe all your creditors all that credit card debt and all the debt that should have been discharged if the case was handled properly from the beginning.