FAQ > Personal Bankruptcy
Common Questions of Personal Bankruptcy
Here are a few common questions many have asked with the answers from our experienced bankruptcy attorneys. If you have any common questions, please call us at 916-447-0222 or complete our FREE consultation form.
1. Will I lose anything if I file for personal bankruptcy?
Generally, you may file a bankruptcy and retain all of your personal belongings, including your house, your car and all household goods. Lanphier & Associates will make sure that all of your personal belongings are protected. If you owe more on your car than the car is worth, the bankruptcy court will not sell your car, because after sale there would be no money left over to make a distribution to your creditors. The same goes for your home and personal property. Even if your property is worth more than what is owed on it, usually we can use the state bankruptcy exemptions to protect these items.
You may be more at risk of losing property if you don't file bankruptcy, as creditors can sue you and attach your bank accounts, garnish your wages and attach and seize your property. As a result, you may miss rent, mortgage or car payments, making it difficult to provide even your most basic necessities.
2. When do I get relief from creditor harassment?
Immediately. As soon as you come into our office, we will give you a client record number and you will then refer all future creditor calls to your bankruptcy attorney at Lanphier & Associates. No more credit card payments and no more harassment immediately upon retaining Lanphier & Associates.
3. Does my spouse have to file jointly with me?
If all or most of the debts are in your name only, your spouse may not have to file. Creditors usually cannot pursue a non-filing spouse, unless he or she is legally a co-debtor on the debt. Additionally, the bankruptcy should not be reflected on the non-filing spouse's credit report. The law does vary, however, from state to state so make sure you ask a Lanphier & Associates bankruptcy attorney about whether or not your spouse has to file.
4. Who knows about my personal bankruptcy case?
The only parties that receive notice of the bankruptcy are your creditors, the bankruptcy court and the IRS. Generally, the bankruptcy will have no effect whatsoever on your taxes. Your employer will not be notified of the bankruptcy unless your employer is also a creditor. The bankruptcy is public record, so anyone who wants to find out could determine that you had filed. Generally, however, only you, your creditors and the IRS will know about the bankruptcy.
5. Will I be able to rent after I file personal bankruptcy?
There were over 1 million bankruptcies filed in the United States last year alone. Common sense will tell you that these people are not all living on the street. If you are presently renting a home or apartment, usually your present landlord will renew your lease without running an updated credit report, and will have no knowledge that you even filed a bankruptcy.
If you are applying for a new lease, there could be some slight difficulties that can easily be overcome. We have found that larger leasing companies usually have stricter policies regarding leasing to applicants with blemished credit. Remember that it is the blemished credit report, not necessarily the bankruptcy that is reflecting poorly on your application. Also, with no outstanding debt, you may appear to be a better risk than other applicants who have outstanding debt and blemished credit reports. We find that a good faith gesture, such as offering an extra month security deposit, may be enough for a potential lessor to overcome her concerns about your blemished credit.
6. How do I know if I should file personal bankruptcy?
*Are you calling because you are being sued??If you are being sued, and you own a home, we strongly urge you to speak with a Lanphier & Associates representative immediately about filing a bankruptcy. A bankruptcy will stop a lawsuit immediately and prevent your creditors from placing a lien on your home or garnishing your hard-earned wages.
*Is your home being foreclosed or is your car about to be repossessed? If it is, very often bankruptcy may prevent the foreclosure action or repossession from proceeding and allow you to consolidate your mortgage arrears or automobile balance and make payments on those debts over time through a payment plan designed by us with your help. If your house is being foreclosed or your car is about to be repossessed, Chapter 7 bankruptcy may not be an option. Chapter 13 bankruptcy may save your house and your car.
*Do credit cards or medical bills have you so deep in debt that it is hard for you to save for the future? If you are only paying the minimum payment on the credit card bills from month to month (generally from two to three percent of the outstanding balance), and the interest rate is only 15%, you will take about 20 years to pay off a $10,000 debt. Do you really want to be in the same financial situation in twenty years? Chapter 7 bankruptcy can provide you with a fresh start that you are entitled to under the law and get you out of debt NOW.
7. Is filing personal bankruptcy immoral or does it make me a bad person?
Everyone is entitled to a fresh start. Many times, events occur in people's lives that cannot be expected. You may have had a sudden loss in income, a family medical catastrophe, a work injury, or any one of numerous other difficulties that would have been almost impossible for which to plan. Most of the people that we represent are good people who have encountered unfortunate circumstances and just want to get a fresh start. We understand that for most of our clients bankruptcy is the last resort. Many of our clients have a very difficult time determining if personal bankruptcy is the right decision for them.
You must ask yourself? Are the credit card companies concerned about your financial difficulties? Are you paying your creditors instead of saving for your children's education or your retirement? When is the last time you took a vacation? Lanphier & Associates believes that it is very important for an attorney to provide both bankruptcy and non-bankruptcy alternatives. We believe in giving you our honest opinion as to what will put you in the best possible financial condition now and into your future. The client always comes first. Please call, 916-447-0222 to speak with a Lanphier & Associates bankruptcy attorney about the issues you should consider when deciding whether or not bankruptcy is for you.
8. How do I choose a personal bankruptcy attorney?
When considering filing a personal bankruptcy, you want to be advised by someone who is familiar and experienced with all of the "ins and outs" of bankruptcy law. Especially when you own a home or car or have other assets that you are trying to protect, you do not want your advice from an attorney who knows a little bit about a lot of different areas of law, but not a lot about bankruptcy. At Lanphier & Associates we spend almost all of our time on bankruptcy and getting people just like you out of debt. When you call a bankruptcy attorney for information regarding bankruptcy, ask him exactly how many bankruptcies he has done and see if his experience comes close to Lanphier & Associates. Educate yourself about your options, but be educated by someone who is qualified.
If you can find a law firm with the same level of experience as Lanphier & Associates, and one who prides himself on client service, as we do, let fees be your deciding factor.
Lanphier & Associates will provide you with a range of fair fees right over the phone. Beware of any bankruptcy attorney who refuses to give you a fee quote over the phone. Lanphier & Associates will quote you a fee right over the phone, before wasting any of your time.
Many bankruptcy attorneys charge fees of $2,000 or more for a straight forward Chapter 7 bankruptcy. At Lanphier & Associates we do not believe that a consumer debtor should have to pay that much money to get a fresh start. We provide high quality legal representation, often at a fraction of the cost. Do not let anyone tell you that we could not possibly provide the same quality service at such low fees. We have thousands of clients to speak for our reputation of excellence. The fees we charge are commensurate with the work performed in your case, and since Lanphier & Associates has combined the highest levels of technology along with experienced bankruptcy attorneys, we are able to pass the cost savings on to you.
As for no money down firms, beware. Make them quote you the entire fee up front before you go into their office. Do not waste your time finding out that you will be paying them hundreds of dollars more than you would have by using Lanphier & Associates. They will try to convince you how important it is to have your case filed immediately. What they will not tell you, is that as soon as you retain Lanphier & Associates, for as little as $100 down, we will take all future calls from your creditors and the creditor harassment will stop. In most instances, taking a month or two to pay Lanphier & Associates the balance of your fee will not allow the creditors enough time to garnish your wages. When you speak to an attorney here, we will tell you if you are in any danger of losing anything by waiting. Please remember that if you need your case filed immediately Lanphier & Associates may be able to work with you. By waiting a short time until you can pay some or all of our fees, you will usually save hundreds of dollars and cost yourself nothing.
9. Can I get rid of student loans or tax debts?
Any bankruptcy attorney must have a sophisticated understanding of bankruptcy law to deal with student loan and tax debts. Until October 1998, student loans were discharged through Chapter 7 bankruptcy if the first payment on the loan became due more than seven years prior to the date of filing. In October 1998, President Clinton signed a new law into effect that disqualified all student loans from discharge. Lanphier & Associates can still help you obtain relief from your student loan debts through the use of Chapter 13 bankruptcy. Under Chapter 13 bankruptcy, our attorneys can consolidate your student loan debt, along with any other outstanding bills, and arrange an interest free repayment plan, so that you do not have to suffer through the burden of garnishments, harassment and other collection efforts by student loan agencies. We may even be able to reduce the amount paid to the student loan agency during the course of your Chapter 13 bankruptcy so that your consolidation payment is as low as possible. If you would like to find out more about how Lanphier & Associates can ease the burden of student loan debts through the use of Chapter 13, call 916-447-0222 to speak directly with a Lanphier & Associates attorney.
Tax debts are generally subject to discharge only if you file personal bankruptcy more than three years after you file a timely, truthful tax return. If your return is filed late, the taxes are generally discharged only if you file bankruptcy more than two years after filing a truthful tax return. Of course, these are general rules and you should speak with a Lanphier & Associates representative who will perform a detailed analysis of these issues.
10. Can I get credit after filing personal bankruptcy?
Although bankruptcy may legally be reported to your credit report for up to 10 years, you can begin to reestablish your credit immediately. Remember that "credit" is your ability to borrow money. Lenders consider many factors while determining whether to loan you money, but most importantly, they consider your debt-to-income ratio. You are probably visiting this site because you already have more outstanding debt than you have the ability to pay. So, arguably, you do not have credit.
Filing eliminates most, if not all of your debts, therefore reducing your debt-to-income ratio, potentially improving your ability to borrow money in the future. Some financial institutions actively solicit business from people who have filed. Lenders are in business to make money by lending you money and charging you interest. Lenders know that once you have filed, you will not be able to file again for 6 years.
Many of our clients have purchased cars immediately upon receiving their discharge orders. Many lenders have programs that provide for post-bankruptcy borrows to obtain home financing within a year or two after a discharge. Many of our clients even receive solicitations for unsecured credit cards almost immediately upon receiving their discharge. Lanphier & Associates just wants to advise you to be careful not to get back into the credit card "trap".
CALL 916-447-0222 TO SPEAK DIRECTLY WITH AN ATTORNEY. BY THE WAY, WE ARE OPEN FOR BUSINESS MONDAY THROUGH SATURDAY!