Look at you!
You’re a step closer to being debt free and to having a good credit score.
So here’s what will happen next. Attorney Stanley Tate will contact you shortly to do two things:
- Answer any questions you may have and
- Schedule your consultation
To prepare for your consultation, here’s what you’ll need to gather:
- Your pay stubs from now until six months ago
- Your most recent federal and state tax returns
- Your bills (just throw them in bag) and
- Your credit report.
If you have trouble getting any of these things, no worries. We’ll help you get what’s missing.
And while you’re gathering those documents, would you mind answering two quick questions?
Common bankruptcy questions
What is bankruptcy?
Bankruptcy is a legal proceeding that allows you to get rid of most of your debt so you can get a fresh financial start. Filing bankruptcy immediately stops your creditors from collecting debts you owe. It gives you a chance to breath, get your stuff together, and then get on with your life.
Which bankruptcy should I file?
You likely are going to file a chapter 7 or a chapter 13.
Most people want to file a chapter 7. That’s because it’s quicker and cheaper.
A chapter 7 is typically over with in about 90 days. And your total costs in a chapter 7 (attorneys fees, filing fee, etc.) are usually less than $1500 when you file bankruptcy here in St Louis.
A chapter 13 on the other hand, typically lasts about 3 to 5 years. Your costs in a chapter 7 include attorneys fees (about $4 thousand) and monthly payments to your creditors.
In my experience, my clients will file a chapter 7 unless:
- Their income in comparison to their household size is really high
- They’re several months behind on their mortgage and they want to keep the home
- They can’t file a chapter 7 and get a discharge because they filed a chapter 7 less than 8 years ago.
What bankruptcy does for you
Bankruptcy allows you to:
- Eliminate your obligation to pay most of your debts. This is called a discharge of debts. The discharge is designed to give you a fresh start.
- Stop a foreclosure of your home and allow you to catch up on missed payments. (You’d do this in a chapter 13.)
- Stop a repossession of your car and allow you to catch up on missed payments. (You’d do this in a chapter 13.)
- Force the return of your car that’s been repossessed. (Usually you’d do this in a chapter 13.)
- Stop wage garnishment.
- Stop collectors from calling you.
- Turn your lights or gas back on at your home or stop them from getting turned off.
- Allow your driver license to be reinstated if it was suspended for not paying on a personal injury claim.
What bankruptcy doesn’t do
- Get rid of child support or alimony payments
- Eliminate most tax debt. You can, in limited situations, eliminate certain back taxes.
- Automatically eliminate your student loan debt. You can try and get rid of your student loan debt in your bankruptcy. To do that, you have to file an adversary proceeding.
What happens to my credit if I file bankruptcy?
Let’s face it, if you’re filing bankruptcy, your credit score probably sucks already.
So filing bankruptcy likely won’t lower your score all that much.
The more important question, however, is what can happen to your credit score after you file bankruptcy.
If you manage your credit responsibly after filing bankruptcy,about 12 to 18 months after your case ends, you can raise your credit score into the 700s.
Your ability to rocket your score that high requires you:
- Add positive credit to your credit report (think secured credit cards and an auto loan)
- Pay your bills on time
- Keep low balances on your credit cards (you want to keep your balances less than 25% of their limits)
What happens to my car if I file bankruptcy
You can keep your car if you want. Or you can give it back. Or you can decide at first that you want to keep it and then later find a better car with a better rate and then decide to give your car back.
What happens to my house if I file bankruptcy
If you’re current on your mortgage, you can keep your home. But if your’e behind on your mortgage, you may be able to keep your home by filing a chapter 13 bankruptcy.
You can also surrender your home. If you do that, you’ll no longer owe the mortgage on your home but you’ll have to move.
Can I file bankruptcy without an attorney?
You can but you probably shouldn’t.
Look, I get it. Attorneys are expensive. So if you can save some money doing it yourself, why not?
I”ll tell you why not: The bankruptcy process is hard. There’s more than 45 pages you have to complete that are each filled with hundreds of legal questions you have to answer.
That said, could you do it? Possibly. If you’re patient, inquisitive, and resourceful and you carefully prepare, maybe you could do it.
But even if you are all those things, I still wouldn’t recommend you file your own bankruptcy.
There are just too many chances for you to f*!k up.