before i talk to a bankruptcy lawyer do i need to know how much i owe

There is no amount that needs to be owed to file for bankruptcy. However, given the cost of the attorney, filing fee and other costs you need to determine if it makes sense. It also matters what your ability to pay would be.

Full Answer

Can I talk to my creditors after filing bankruptcy?

The bank may close your account when you file bankruptcy, so it's a good idea to already have a new bank account set up when you file. DO refer collection calls to your attorney, once you have retained one. You are free to speak with your creditors, but you retained an attorney for a reason.

What can I expect from a bankruptcy attorney?

Not only will you receive legal advice, but a bankruptcy attorney will handle the paperwork from start to finish. Below are some of the most common types of services you can expect from your bankruptcy lawyer. (Not sure how much you should pay? Start by reading Average Attorney Fees in Chapter 7 Bankruptcy .)

Do I need a lawyer to file bankruptcy?

But since a bankruptcy filing involves legal matters, it can be challenging to navigate the bankruptcy process alone. You can file the case without legal help, known as going pro se, but experts typically recommend relying on a bankruptcy lawyer to handle your case.

What should I do when filing bankruptcy?

DO consider opening a new bank account, especially if you do your banking somewhere that you owe money. The bank may close your account when you file bankruptcy, so it's a good idea to already have a new bank account set up when you file. DO refer collection calls to your attorney, once you have retained one.

What should you not do before filing bankruptcy?

Here are common mistakes you should avoid before filing for bankruptcy.Lying about Your Assets. ... Not Consulting an Attorney. ... Giving Assets (Or Payments) To Family Members. ... Running Up Credit Card Debt. ... Taking on New Debt. ... Raiding The 401(k) ... Transferring Property to Family or Friends. ... Not Doing Your Research.

How much debt is enough for bankruptcy?

You must have sufficient income to make the monthly debt payments outlined in your bankruptcy plan. Your unsecured debts (such as credit cards and medical bills) must be less than $419,275, and your secured debts (like mortgage and car payments) must be less than $1,257,850.

Do you still owe money after bankruptcy?

The balance of what you owe is eliminated after the bankruptcy is discharged. Chapter 7 bankruptcy can't get you out of certain kinds of debts. You'll still have to pay court-ordered alimony and child support, taxes, and student loans.

Should you seek legal advice when filing for bankruptcy?

However, seeking the advice of a qualified attorney is strongly recommended because bankruptcy has long-term financial and legal outcomes. Filing personal bankruptcy under Chapter 7 or Chapter 13 takes careful preparation and understanding of legal issues.

How much debt can be discharged in a Chapter 7?

There is no ceiling on the amount of debt with which you can file for Chapter 7 bankruptcy. Chapter 7 also is often preferred over Chapter 13 because it wipes out debt and doesn't involve repayment.

What are 5 types of debt that are not dischargeable in bankruptcy?

Nondischargeable debt is a type of debt that cannot be eliminated through a bankruptcy proceeding. Such debts include, but are not limited to, student loans; most federal, state, and local taxes; money borrowed on a credit card to pay those taxes; and child support and alimony.

What debt is not covered by bankruptcy?

Other Non-Dischargeable Debts in Bankruptcy 401k loans. Other government debt such as fines and penalties. Restitution for criminal acts. Debt arising from fraud or false pretenses.

Can a creditor come after me after bankruptcy?

Debt collectors cannot try to collect on debts that were discharged in bankruptcy. Also, if you file for bankruptcy, debt collectors are not allowed to continue collection activities while the bankruptcy case is pending in court.

When should I stop paying bills before Chapter 7?

If possible, 90 days before filing is the time to stop using your credit cards once you know that you're going to file Chapter 7 bankruptcy. You can't max out credit cards before bankruptcy just because you're about to file. Bankruptcy provides relief for the honest but unfortunate debtor.

What are three alternatives to bankruptcy?

Bankruptcy AlternativesDebt Settlement. ... Debt Consolidation. ... Sell Assets. ... Credit Counseling. ... Borrow Money from Friends or Family. ... Find a Way to Earn Extra Income. ... Restructure or Refinance Your Mortgage. ... Lower Expenses Making Changes to Your Budget and Lifestyle.More items...

What is the best way to repair your credit after filing bankruptcy?

7 Easy Ways To Rebuild Your Credit After BankruptcyCheck Your Credit Report. ... Monitor Your Credit Score. ... Practice Responsible Credit Habits. ... Get a Secured Credit Card. ... Consider a Credit-builder Loan. ... Utilize a Co-signer. ... Ask to Become an Authorized User.

What happens when bankruptcy is filed?

If you're struggling financially, bankruptcy gives you the opportunity to pay down a portion of your debts over time or have some of them eliminated entirely. Either way, declaring bankruptcy grants what's called an automatic stay, which is essentially a block on your debt to keep creditors from trying to collect.

How to file for bankruptcy?

First, you can expect your attorney to tell you whether filing for bankruptcy would be in your best interest. If it is, you should also learn: 1 whether Chapter 7, Chapter 13, or another type will help you achieve your financial goals 2 what you can expect during the bankruptcy process, and 3 whether your case involves any particular difficulties or risks.

What to expect during bankruptcy?

Most importantly, if you have any questions, you can expect your attorney to respond to your calls or emails promptly.

What do bankruptcy attorneys do?

Almost all bankruptcy attorneys have specialized software that prepares and files your required bankruptcy paperwork with the court. You'll provide your attorney with all of your financial information, such as income, expense, asset, and debt information.

What type of hearings can an attorney represent you at?

Some common types of hearings you can expect your attorney to represent you at: Chapter 13 confirmation hearings. Chapter 7 reaffirmation hearings, and. any other motion or objection hearings filed by you, your creditors, or the trustee.

What is the mandatory hearing for bankruptcy?

After filing for bankruptcy, all debtors must attend a mandatory hearing called the 341 meeting of creditors. But, depending on your case, you (or your attorney) might need to go to additional hearings. Some common types of hearings you can expect your attorney to represent you at: Chapter 13 confirmation hearings.

Is bankruptcy easy to handle?

Expect Competence From Your Bankruptcy Lawyer. Not all bankruptcy cases are complicated, but they aren't all easy, either. Either way, your bankruptcy lawyer should have the skill level necessary to handle your case. In general, the difficulty of your bankruptcy will depend on: the involvement of bankruptcy litigation.

Can an attorney text you?

Attorneys have the option, but are not required, to send text messages to you. You will receive up to 2 messages per week from Martindale-Nolo. Frequency from attorney may vary. Message and data rates may apply. Your number will be held in accordance with our Privacy Policy.

When does bankruptcy make sense?

When Bankruptcy Might Make Sense. Regardless of the amount of debt you have, filing for bankruptcy is an individual decision that depends on your particular circumstances. In general, filing for bankruptcy relief may be in your best interest if: your lender is about to foreclose on or repossess your property.

How often can you get discharged from bankruptcy?

There are limits to how often you can receive a discharge in bankruptcy. If you file to eliminate a small amount of debt you can easily pay off, you may not be entitled to another discharge for many years.

What debts can't be eliminated in bankruptcy?

Filing for bankruptcy doesn't wipe out all types of debt. Obligations you can't eliminate with a bankruptcy discharge are called nondischargeable debts. The most common nondischargeable debt s include: alimony. child support. priority tax obligations, and. student loans (except in rare circumstances).

Debt Secured By Collateral: Mortgages Car Loans And More

When you purchase expensive property on credit, the lender often requires collateral in case you fail to pay the loan. Known as a “ secured debt ,” this type of loan is used when taking out a:

Can You Negotiate Your Debt With Your Creditors

If you can work out a solution directly with your creditors, you might not need to file for bankruptcy. In some cases, creditors might be willing to work with you to cure your default. By negotiating with your creditors, you might be able to:

How Long Will It Take To Pay Off Your Debts

Another factor to consider is how long will it take you to pay off your debts if you do not file for bankruptcy relief. For someone on a fixed budget who cannot reduce expenses or increase income, paying off $5,000 or $10,000 in debt may take three to four times as long compared to someone who can increase income and reduce expenses.

Cover Your Four Walls

When youre making a budget that will work for you right now, where do you start? Whats the main stuff you need to focus on covering? Start with what we call your Four Walls: food, utilities, shelter and transportation. These are the main essentials.

Other Actions A Creditor May Take After Obtaining A Judgment

State laws determine the legal steps a credit card company may take to collect a judgment debt. In some states, creditors are allowed to garnish your wages for judgments. Some states allow judgment holders to apply for supplemental proceedings to identify any personal property the judgment holder may seize to satisfy the debt.

Is Bankruptcy The Best Solution For Your Current Situation

In order to determine if bankruptcy is the best solution to your current situation you must first determine if you are qualified to file a Chapter 7 case. Chapter 7 bankruptcy is what most people think of when they are considering filing a bankruptcy, which is a total liquidation.

Filing For Bankruptcy Can Cost Anywhere From A Few Hundred To A Few Thousand Dollars Depending On The Type Of Bankruptcy Filed And Whether You Hire An Attorney Or Take A Diy Approach

Filing fees and other miscellaneous costs required to file a bankruptcy petition typically range from $300 to $400. If youre filing on your own, you may not have to pay much more than that.

What happens if you don't file bankruptcy?

If you don't file all of the paperwork, the bankruptcy court might dismiss your case, or you might have to file additional papers to correct the paperwork and pay more fees. If you leave a creditor out, that debt might not get discharged. And, if you forget to include an asset, the Chapter 7 trustee might find it and take the property.

How often can you file for bankruptcy?

Bankruptcy works well to wipe out debt; however, you're only entitled to receive a bankruptcy discharge —the order that wipes out your debt—every so often. So it's a good idea to examine whether now is the time or whether you might need to file sometime in the future. Specifically, you can receive a Chapter 7 discharge: 1 once every eight years, or 2 six years after a Chapter 13 bankruptcy filing.

How long before bankruptcy can you get a credit card?

If you ran up debt during the 70 to 90 days before filing bankruptcy, beware (unless it was for life necessities, such as food, clothing, and utilities). The creditor might object to your discharge by arguing that you took out the loan without any intention of paying it back (called fraud). As a general rule, if you took out cash advances or used a credit card to buy a luxury item within 70 to 90 days of filing bankruptcy, then you've committed "presumptive fraud" and might not get to discharge the debt.

What happens if you forget to include assets in Chapter 7?

And, if you forget to include an asset, the Chapter 7 trustee might find it and take the property. The Federal Bureau of Investigation (FBI) investigates bankruptcy crimes, so bankruptcy court is not the place to be less than forthright. Most bankruptcy lawyers can find an appropriate solution to your problem.

How often can you file for Chapter 7?

Specifically, you can receive a Chapter 7 discharge: once every eight years, or. six years after a Chapter 13 bankruptcy filing.

How long does it take to pay back a loan in bankruptcy?

If you pay back loans to friends or relatives within one year of filing, or even other creditors within 90 days of filing, then this may be considered a "preferential transfer." A preferential transfer can be "undone" in bankruptcy.

Can you file bankruptcy if you have a fraud allegation?

Your attorney will examine the complaint to determine whether it includes a fraud allegation. If so, the best bet will likely be filing for bankruptcy before the case goes to judgment. If the matter goes to judgment, you probably won't be able to wipe out the debt in bankruptcy.

What to do if you aren't sure about something?

If you aren't sure about something, contact your attorney for guidance. There are also some things you should avoid doing. If you find you've already done some of the things to avoid, let your attorney know right away. If you try to undo your actions, you could actually make the situation worse.

Can I open a new bank account if I owe money?

Your attorney may also ask for copies of bills and collection letters, as well. DO consider opening a new bank account, especially if you do your banking somewhere that you owe money. The bank may close your account when you file bankruptcy, so it's a good idea to already have a new bank account set up when you file.

Can I finance a car before filing a case?

DO NOT finance a new vehicle just before filing your case. If you do finance a car, it can mean a delay in filing your case. Speak with your attorney prior to doing this. DO NOT use your credit cards or acquire new debt. Unplanned medical debt may be an exception, as you may not have a choice about incurring the debt.

What is the meaning of Chapter 7 bankruptcy?

Chapter 7 bankruptcy includes a “means test,’’ a requirement that you disclose all of your assets and income , which determines your capacity to pay off creditors. If you purposely leave out assets or income, trying to help your qualification, your case could be dismissed.

What happens if you leave out assets in Chapter 7?

If you purposely leave out assets or income, trying to help your qualification, your case could be dismissed. You could also be banned from filing on those debts ever again. Eventually, a bankruptcy trustee will have access to your financial records, so it’s unlikely your deception will go unnoticed. You shouldn’t try to hide any creditors, either, because credit-card companies have centralized and computerized information. They will all know you have filed for bankruptcy protection. Bottom line: Tell the truth.

Can you give your car to a family member before filing for bankruptcy?

It’s dishonest. Giving your car to a family member just before you file for bankruptcy is a clear-cut way to lose the car. If you own the car, it must be listed as an asset or if you still owe money, it must be listed as a liability.

Can you raid 401(k) before bankruptcy?

If you think it’s good business to raid your 401 (k) or IRA retirement accounts to stash away some money or pay off some creditors shortly before filing for bankruptcy, think again. First, paying off some creditors (but not others) is not allowed under the bankruptcy code because you are favoring one creditor over another. More importantly, though, your retirement accounts are exempt when filing bankruptcy so it makes no sense. IRAs, Roth IRS, SEP and Simple IRAs, Keogh plans, 401 (k) accounts and pension plans are exempt, so they can’t be seized by creditors or a bankruptcy trustee. In other words, don’t touch ‘em!

Can you owe money to credit cards after bankruptcy?

You could end up owing money on your credit cards, even after the bankruptcy is over. Usually, any credit purchases you make within 90 days of filing for bankruptcy are not included in the bankruptcy debts. You might have to pay your credit-card debt in full and creditors could accuse you of fraudulent borrowing.

Financial Records

Legal Records

• Any legal history or pending litigationinvolving you is information you'll want to disclose to your attorney. Previous judgments against you show debts that will factor into determining which bankruptcy is right according to your financial situation. In addition, any pending litigation or current court order will determine how much you can afford t...

See more on findlaw.com

Additional Documents

Documents Needed to File Chapter 7