Frequently Asked Questions

In 2005 Congress passed and President Bush signed into effect the Bankruptcy Abuse Prevention and Consumer Protection Act.  The changes in the law took effect on October 17, 2005. 

While some aspects of the bankruptcy law changed in the fall of 2005, most of the rules remained exactly the same.  For the vast majority of bankruptcy filers, the experience and effect of filing bankruptcy will be nearly identical to the code before the change.  For most filers, the main difference is that there are now more "hoops to jump through".  For example, one new requirement is that all individuals filing for bankruptcy must now complete a course in Credit Counseling before filing.  This and several other new requirements increase the time and work involved to file bankruptcy.  However, I assure you that it is still possible to file bankruptcy. 

in every bankruptcy case filed, the debtor must appear in front of the bankruptcy trustee in what is commonly known as the 341 creditors meeting, 341 being the section of the bankruptcy code requiring the meeting. This is an administrative meeting, and while it is a formal hearing with the proceedings being recorded, it should not be confused with a trial. It is unusual for a debtor to ever appear before a bankruptcy judge. Typically, a chapter 7 debtor will not be required to appear in court unless an objection is filed in the case. In a chapter 13 bankruptcy, the debtor may or may not have to appear in front of the judge for a confirmation hearing. The reason for the uncertainty is that while the confirmation hearing is required by the bankruptcy code, sometimes the judge will wave the hearing, and sometimes the debtor may appear by telephone rather than physically.

A bankruptcy discharge is an order releasing the debtor from certain debts personally owed to creditors.

Debts fall into various categories, some of which are dischargable, and some of which are not.  Further, each of these categories is influenced by multiple factors.  For example: 

• Is the debt secured by collateral? 
• Is the debt backed by the government? 

Whether or not a debt is dischargeable depends on your unique circumstances.  Please ask me this question at your initial consultation when I will be able to apply the facts of your case and give you a more solid answer. 

Once your bankruptcy case has been filed, something called the automatic stay goes into place making it illegal for your creditors to contact you in any way.  This means they cannot call you, send you letter, or show up at your front door. 

Until your case is filed however, creditors may and often will continue to contact you.  Once you've retained me however, and creditors know that you have hired an attorney, creditors are ethically bound to contact me as your legal council, and not you directly. 

While every situation is unique and there could be facts that lead to any given debt not being dischargeable, the vast majority of consumer debts are still dischargeable.  While most credit companies and collection agencies are ethical and follow the rules fair debt collection, there are always exceptions.  Some creditors will tell people anything if they think that it will "encourage" (scare) them into sending money. 

A typical non-contested bankruptcy can be broken into two main parts, pre-filing, and post-filing.  Pre-filing is everything that happens, you guessed it, before the case is filed.  This includes gathering personal and financial information, processing that information, and bankruptcy planning; the analysis of the case to get the most benefit and protection, while limiting the loss of assets and any other negative effects.  The time that this takes is largely determined by you, the client.  The faster you can get your information in to me, and the more complete it is, the faster the case can be filed.  This being said however, it should be kept in mind that sometimes the facts of a case prevent it from being filed as quickly as we would like.   Each case is unique. 

The second part is post-filing.  After the case is filed with the court, the speed of the case is largely out of our hands.  While there is some minor variation, the case usually takes about 4 months for a chapter 7 with the 341 creditors meeting occurring about the six week mark. 

Chapter 13 cases last for three to five years depending on the situation of the individual debtor. 

The filing fee the court charges for a chapter 7 is $299.  The filing fee the court charges for a chapter 13 is $274.  My fees will vary on a case by case basis depending on multiple factors.  Following your initial consultation I will be able to determine a fee arrangement based on the facts of your case.  In most cases, I charge a flat fee for bankruptcies.  This means that I tell you up front what it will cost to file a bankruptcy depending on the complexity of your case and that is what the fee will be, as opposed to charging hourly.

First, this price most likely does not include the filing fee.  For a chapter 7 the filing fee is currently $299, and for a chapter 13 the filing fee is currently $274. 

Next, this offer may not be from an attorney.  There are companies that fill out bankruptcy paperwork for people that, by law, cannot offer them legal advice.  In other words, they can tell you that if you want to file chapter 7 bankruptcy that you need to fill out these forms, but they cannot tell you what debts are dischargeable, what assets can be protected, or if you even qualify for a chapter 7 bankruptcy.  Many very low offers are from these companies.

Read the fine print.  As I mentioned above, there is a required hearing that the debtor must attend in every bankruptcy case.  Some law firms offer very low prices that do not include attending the hearing with the client.  Do you really want to go to the 341 creditor meeting without your attorney? 

Finally, most attorneys charge flat fees for bankruptcy cases.  This means that there is one set fee for handling the bankruptcy case.  A firm offering very low prices will typically either only handle the very simplest cases, or will indicate that prices "start from", or are "as low as" the very low fee.  In real life, the circumstances may almost never allow these prices.

You can probably find attorneys that will handle your bankruptcy case for less that what I charge, and I know that you can find attorneys that will charge you more.  My goal is to help people with their problems for a fair price, not to trick people into hiring me and then charging hidden fees.  Before you go with the very low offer, think about what it may be costing you in the long run. 

When a business entity is created, that entity has many of the same legal rights as a person.  It can own property, sign contracts, and earn money.  You may control that entity, or it may be controlled by others.  For liability purposes, it creates a buffer between you and your creditors.  If your company is sued, it becomes much more difficult and expensive for the creditor to threaten your personal assets.  If you are sued personally, your creditor may not be able to seize the assets controlled by your business, or the business itself. 

Much depends on the type of entity created, and how it is structured.  No one entity does everything, and the entity that you choose depends on your specific goals.

In most cases, even if the business has been well established as one type of business entity, it can be converted to another type.  Each class of business entity has various restrictions that must be considered such as to size and ownership type.  Assuming that these rules can be met, it should be possible to convert your business to the format that is most beneficial to you.