Frequently Asked Questions About Chapter 7 Bankruptcy, Chapter 13 Bankruptcy
When I declared bankruptcy, there was no one I could ask questions. I felt alone, scared, ashamed. When a friend began going through bankruptcy a few years, she called me with her questions about what to expect. Once, exasperated, she said, “rather than me bothering you every day, why don’t you just write this all down so I can read it in one place?”
So I did. I wrote Bounce Back From Bankruptcy to help my friend Michele and everyone else who was struggling with their decision to declare bankruptcy. I’ve made it my life’s mission to help people get back on their feet after bankruptcy.
There are a few questions that come up regularly about bankruptcy (and about my book!), so I’ve included them here to help you. If you have any additional questions that come up for you, check out the resources I’ve included and feel free to email me at PaulaRyan@artofabundance.com.
I’d like to order your book, “Bounce Back From Bankruptcy,” and would like to know when it was written, if it has been updated since the new bankruptcy law and if the list of credit card issuers (secured and non-secured) is still valid?
Can’t I just file bankruptcy by myself? Do I really need a lawyer?
You can file your bankruptcy yourself, but I rarely recommend it. It’s too easy to overlook something; bankruptcy laws are complicated and may be changing soon. You can file a Chapter 7 by yourself, but if you do this, please have a bankruptcy attorney review your paperwork before you file, to make sure everything is in order. Chapter 13 bankruptcies are much more complicated and I don’t recommend trying to file your own Chapter 13, under any circumstances.
What’s a good reference book if I’m considering bankruptcy?
There are two I recommend, both by the same author. Personal Bankruptcy For Dummies and Debt Free: Your Guide to Personal Bankruptcy Without Shame by attorney James Caher. If you’ve decided to file bankruptcy without an attorney and do it yourself, I recommend any of the Nolo books by Robin Leonard.
How do I find a good bankruptcy attorney?
You’ll find a free attorney referral listing section here on my website that may help you find a consumer-friendly attorney. You might also want to also check with your state bar association for a referral. Most attorneys will offer a free initial consultation. I recommend going to two or three different free consultations with attorneys. Then go with the attorney you feel most comfortable with. This may or may not be the cheapest attorney. Remember: this is a big financial decision you’re making and you want to make sure all your questions are fully answered.
If you want to read more about the new bankruptcy law, or get a free consultation with an attorney in your area, click below to find Bankruptcy Lawyers. Attorneys & Law Firms for Filing Bankruptcy – where you’ll find bankruptcy lawyers, attorneys and law firms to help you on filing personal or business bankruptcy. This site provides bankruptcy information, chapter 7, chapter 11 & chapter 13 bankruptcy laws.
I can’t afford to go bankrupt. I can’t even afford to pay my bills – how am I going to pay an attorney?
When you make the decision to go bankrupt, the first thing you’ll be advised to do is stop paying your unsecured creditors (credit cards, mail order companies, doctors, etc.) whose debts you’ll be discharging under the bankruptcy. This should free up some money. Most attorneys will allow you to fill out the paperwork and then pay them monthly until you’re paid in full. Once you’re paid in full, they will file the papers for you.
Is there a rule of thumb for who should or shouldn’t file bankruptcy?
There is no cut and dried rule of thumb for bankruptcies, but I do have some basic guidelines that I try and share with people who are considering bankruptcy. Basically, if you’re judgment proof (meaning you have no home or car loan or assets for creditors to come after), and you don’t have any intention of buying anything on credit for 7 years (mortgage or car loan), there’s really no need for you to declare bankruptcy. A good bankruptcy attorney will point this out to you.
On the other hand, if your debts are more than three times your income, and you have limited possibilities for growth in income, there is a good chance that you’ll never get out from under the debt by paying off the debt yourself. Whether or not you should declare bankruptcy will depend on the types of debt, and whether or not the debt is dischargeable. Certain judgments and taxes aren’t dischargeable and student loans are rarely dischargeable, except under conditions of extreme hardship. If you find yourself losing sleep, sacrificing your family’s well being or thinking of doing something illegal in order to make money to pay your creditors, chances are bankruptcy may be a better option.
It’s called the bankruptcy protection law for a reason. It’s there to protect you and give you a fresh start. If you decide to declare bankruptcy, take steps now to make sure you don’t get into the same cycle again.
Have a question about what to expect after you go bankrupt?
Bounce Back From Bankruptcy will direct you to the right answers!