You did everything you could think of to avoid bankruptcy. You cut back on spending. You sold stuff to make payments on your debts. You've been eating rice and beans and bologna for months now. But even with all the work and sacrifice, you've come to one painful conclusion—you may have to file bankruptcy if you're ever going to get out of debt.
Bankruptcy is complex and confusing, particularly after Congress amended the bankruptcy code so that not all debtors could file chapter 7. Bankruptcy can also be emotionally devastating. It's an extremely serious decision, and we don't want you to have surprises along the way. Here are some things you need to know before you take the first step.What is bankruptcy?
Bankruptcy is a court proceeding where you tell a judge you can't pay your debts. The Bankruptcy judge and bankruptcy trustee examine your assets and liabilities to decide whether to discharge those debts. If the bankruptcy court finds that you have no means to pay back your debt, you declare bankruptcy.
Bankruptcy can stop foreclosure on your home, repossession of property, garnishment of your wages lawsuits, and creditor harassment. Bankruptcy cancels many kinds of debts but not all types of debts. Which isn't to say that all of your debts will not be discharged in bankruptcy. It just depends on what type of debts you have.
Bankruptcy doesn't clear all debts:
- Student loans
- Government debts like taxes, fines or penalties
- Child support and alimony
- Expensive items purchased right before filing bankruptcy like cars, boats, or jewelry
When you file for bankruptcy, creditors are required to stop all efforts to collect money from you, at least temporarily. Most creditors can't write to you, cannot call you and cannot sue you after you've filed. However, even if you declare bankruptcy, the courts can require you to pay back certain debts. Every bankruptcy case is unique, and only the bankruptcy court with recommendations of the bankruptcy trustee can decide the details of your own bankruptcy. A good bankruptcy lawyer like Hollis Joslin can help you get the best outcome in bankruptcy.
What are the main types of bankruptcy?
There are two main kinds of consumer bankruptcy. You may have heard of them: Chapter 13 and Chapter 7.
In a Chapter 13 bankruptcy, the bankruptcy court approves a repayment plan for you to repay some percentage or all of your debts over three to five years. You can keep your assets (the stuff you own) and you're given time to bring a past due mortgage current or to bring past due car payments current. A disposable income test determines what percentage of unsecured debts you will be required to repay. You agree to a monthly payment plan and you are required to follow a strict budget that will be monitored by the court. A Chapter 13 bankruptcy stays on your credit report for seven years.
In a Chapter 7 Bankruptcy, the bankruptcy trustee sells all of your nonexempt assets so that you can pay back as much debt as possible from the proceeds. Click here to see Bankruptcy Lawyer Hollis Joslin's link to exempt assets in bankruptcy. Any dischargeable debts remaining unpaid are erased. If your mortgage payments are not current, You could lose your home in a chapter 7 bankruptcy. Even if you are current on your mortgage, you could lose your home or your equity if your equity exceeds the homestead exemption. Again, see Bankruptcy Lawyer Hollis Joslin's link to exemptions for details. You could also lose your car in a chapter 7 bankruptcy if you are behind on payments or the equity in the car exceeds the exemption amount. Click here to learn about Cars and Houses in Bankruptcy. And finally, you can only file Chapter 7 bankruptcy if the court decides your income is too low to pay back your debt. That determination is made by the Chapter t means test. A Chapter 7 bankruptcy stays on your credit report for 10 years.
You may have heard of other types of bankruptcy, such as Chapter 11 Bankruptcy. Chapter 11 bankruptcy is typically reserved for businesses. You might have also heard about Chapter 12 bankruptcy, which is for farmers and fishermen.
For specific information about bankruptcy laws in your area, you can visit the United States Courts where you can find a wealth of information on the bankruptcy process and where to find bankruptcy help in your area. Each of the United States' 90 Districts has a bankruptcy court. Of course you're encouraged to Call Hollis 602-354-3890 or send Bankruptcy Lawyer Hollis Joslin a message by clicking here. Attorney Hollis Joslin is happy to help. You can also Click here to learn more about Chapter 7 or Click here to learn more about Chapter 13.
What are the consequences of filing bankruptcy?
There is no benefit to sugarcoating it: Bankruptcy takes a huge emotional toll on a person. It can be as traumatic as divorce, the loss of a loved one, or a business failure. Besides the emotional impact, here are other effects of declaring bankruptcy:
Bankruptcy filings become public records.
When you file bankruptcy, your name and other personal information will appear in public court records. Potential employers, banks, clients and businesses can access the details of your bankruptcy and in some instances there can be negative consequences of that record.
Filing bankruptcy can be expensive.
Filing fees for Chapter 13 bankruptcy will cost around $310 plus attorney fees, which can be anywhere from $1,500 to $6,000. (Typically $4500 in Arizona - provided by Arizona bankruptcy lawyer Hollis Joslin). For a Chapter 7 bankruptcy, you'll shell out $335 for filing fees plus attorney fees of as much as $3000 in Arizona - provided by bankruptcy attorney Hollis Joslin who offers discount fees on bankruptcy often much lower than this. Call Hollis 602-354-3890 or send a message using the Contact Form here to send a message to Low cost bankruptcy lawyer Hollis Joslin).(NBankrupt1)
Buying a home can be more complicated after Filing Bankruptcy.
It can take from one to four years to qualify for a mortgage to purchase a home after bankruptcy. However, according to Bankruptcy lawyer Hollis Joslin, you may qualify for an FHA home loan 24 months after bankruptcy. Call Hollis 602-354-3890 for more information.(2)
What should I do before I file for bankruptcy?
It's a big deal to File for bankruptcy so you need to go into the bankruptcy process with eyes wide open. Below are recommendations of some things you should do before making a decision about bankruptcy:
1. Before deciding on Bankruptcy, Organize your paperwork.
Make a list of all debts, including student loans, medical bills, mortgage, car loans, credit cards, child support. everything. For each of those debts, locate the paperwork and verify the amounts owed. It would also be helpful to access a current copy of your credit report with all three, Equifax, Experian, and Transunion. You will need all of this information before speaking with a financial coach or bankruptcy lawyer.
2. Look at options to Bankruptcy.
Try your best to pay off your debt before filing bankruptcy. Get on a bare-bones budget. Negotiate for manageable terms or lower interest rates with creditors. Some creditors will even reduce principal balances rather than settle for nothing, which is what they would likely receive if you file bankruptcy. Move to a smaller residence with a lower cost. Take on an extra job or drive Uber to pay the bills. Did you know Bankruptcy lawyer Hollis Joslin drove Uber through law school and while starting his practice! There's no shame in doing the work you need to do to get your finances in order. If you don't have any luck getting a better deal with creditors, call bankruptcy attorney, Hollis Joslin. Hollis does more than bankruptcy, he also negotiates with creditors and he can often get a better result than you may get on your own. 602-354-3890.
3. Try financial coaching before making the decision to file bankruptcy.
Financial coaches can give you an unbiased perspective on your financial situation.Financial coaches can talk with you about alternatives to bankruptcy and create a customized plan to get you out of the red. Bankruptcy Attorney Hollis Joslin is happy to evaluate your situation to see if a financial coach might be an option to bankruptcy. 602-354-3890
4. Do not file bankruptcy without professional help. Document preparers are not professionals, you need a bankruptcy lawyer like Hollis Joslin
If you've done everything you can and still can't get your head above water, bankruptcy may be your only option. Filing is a complex complicated process and it involves lots of paperwork and the potential for very costly mistakes. Working with a pro is your best option for walking through the bankruptcy process. (By Hollis Joslin Bankruptcy Lawyer - Bankruptcy lawyer Hollis Joslin is an experienced bankruptcy attorney and a low cost bankruptcy lawyer who can help you navigate the complicated bankruptcy process at extremely reasonable rates; Hollis Joslin is a discount bankruptcy lawyer who offers bankruptcy payment plans from zero down and sliding scale fees for bankruptcy filing). Click here to learn about Hollis's great rates.
How can Ramsey Solutions help you?
Whether you are thinking about filing bankruptcy or starting over after filing bankruptcy—Dave Ramsey has resources to help you establish life-long smart money habits. Here are three ways we can help:
First, if your family decides to file bankruptcy, Dave Ramsey partners will be there to help you during the bankruptcy process and give you the tools to restore your hope after your bankruptcy is discharged. They never get angry with someone for filing bankruptcy. It's a difficult, emotional situation. They get that.
Second, if you haven't filed bankruptcy yet, Dave Ramsey has coaches available to meet with you to help you find a better option than bankruptcy if at all possible. The ultimate goal is to help you find financial peace and change your family tree. Bankruptcy is a setback, but your situation—no matter how bad—is never hopeless.
Third, if you think there's any possible way to avoid bankruptcy, Click on the image below to check out Dave Ramsey's Financial Peace University on Amazon.
Dave's #1 course has helped millions of people make a plan for their money, stop living paycheck to paycheck and beat debt for good. This works! Hurry, groups are starting soon.