102 thing you need to know_34

102 thing you need to know_34

ticular financial situation, consult an expert No book, software, or other published material is asubstitute for personalized advice from a knowledgeable attorney licensed to practice law inyour state.

Copyright © January 2001 by Victoria Ring ALL RIGHTS RESERVED No part of this tion may be reproduced, stored in a retrieval system, or transmitted in any form or by anymeans, electronic, mechanical, photocopying, recording or otherwise for sale or profit, withoutprior written permission of Victoria Ring Printing of this publication from the internet downloadversion is permitted for private viewing only

publica-Bankruptcy To Go Kit a Overview a Free Forms Included b Paid Services b

Guidelines 1

How Filing Bankruptcy Can Help You 1

Terms You Need to Know Concerning Bankruptcy 2

Chapter 7 Bankruptcy 3

Steps That Occur in Filing a Chapter 7 Bankruptcy 4

Chapter 13 Bankruptcy 5

Steps That Occur in Filing a Chapter 13 Bankruptcy 5

Changes in Payments During a Chapter 13 Bankruptcy 7

Chapter 11 Bankruptcy 7

Rules that Apply to All Forms of Bankruptcy 7

Debts That Cannot be Discharged 8

The First Steps to Filing a Bankruptcy Petition 8

How Your Credit Will be Effected by Bankruptcy 10

Other General Questions and Answers 10

Websites to Help you Learn More About Bankruptcy 13

Information-Gathering Forms for the preparation of Your Bankruptcy Petition 14

General Information 1

Debt Sheet 2

Income History 3

Monthly Budget 4

Asset Checklist 5

Duty to Disclose All Assets 13

Duty to Disclose All Creditors 14

Agreement 15

Additional Documents Needed to File Petition 16

Bankruptcy To Go Kit

This file that you recently downloaded

from the internet is a complete ebook

dedicated to helping the following types

of people:

(a) Consumers people who are

interested in learning more about

bankruptcy and/or interested in filing

their own bankruptcy and saving $100’s

of dollars in attorney fees

(b) Paralegals legal professionals

with an attorney/boss who is

consider-ing offerconsider-ing bankruptcy services to

clients

(c) Attorneys legal professionals

who do not normally offer bankruptcy

services to clients, but are interested in

starting The forms included in this

“Bankruptcy To Go Kit” can be printed

and used in the office as master forms

Overview

Thank you for downloading this free

book from the website located at http://

www.victoriaring.com/bankruptcy/

book01.doc This book is written by a

Victoria Ring, a bankruptcy paralegal,

who is well aware of the confusion and

multitude of questions that surround the

subject of bankruptcy Her experience

of working with 100’s of clients filing

bankruptcy in the Columbus, Ohio area

has awarded her the ability to know

what consumers really think and want

to know about this subject as well as all

the steps they need to take in order to

file

For instance, Matt down the street comes

by one day to tell you how he filed ruptcy last week and purchased a new carthis week However, your brother

bank-Marshall filed bankruptcy last year and hiscredit has been ruined ever since

Marshall can’t even get a check-cashingcard at his bank What happened? Whatdid Matt do that Marshall didn’t? Will thesame thing happen to you?

And what about when Debbie filed ruptcy because her husband died and thehousehold income was reduced? Whenshe filed bankruptcy they came and tookher home away! Of course there is no wayyou would want that to happen to you.You don’t want to lose your home, car andfurniture just because you decide to filebankruptcy

bank-Stories like these are certainly not unique.All of these same fears surround almosteveryone when they are thinking aboutfiling bankruptcy for the first time Fear ofthe unknown is a natural reaction forhuman beings However, this is preciselythe reason why this book was written It iswritten to take the fear out of filing bank-ruptcy, but most importantly, it will educateyou so you can make a more informeddecision about whether filing bankruptcy is

in your best interest or not

Filing bankruptcy is not necessarily foreverybody, as you will soon see; and afterreading this ebook, you will be in a betterposition to make an educated decisionabout your present financial condition Ifyou decide to go ahead with the process

of filing bankruptcy, at least you will knowwhat to expect after reading this ebook

convenience if you decide you want to

file your own bankruptcy Or, if you are

an attorney, you can print out the

forms, remove my name from them

and use them for your own office

I personally designed these forms for

the two bankruptcy attorney’s that I

was employed with At the time I hired

at the law firm, they were still using old

1960’s style forms Because the

bankruptcy laws had changed so

dramatically, when we did intake

interviews with clients, we had to write

additional information on the side,

bottom and back of the old 1960’s

forms to have enough information to

prepare the bankruptcy petition

After several months of using these

old, outdated forms I figured out the

best way to update them I sat down

one day and re-designed the forms to

include virtually every piece of

informa-tion needed for the paralegal to

pre-pare a well-presented bankruptcy

petition to the Bankruptcy Court

However, the forms were not perfect

the first time out We had to put them

through actual office use and work the

“bugs out” before they were perfect

So be assured, the forms included in

this Bankruptcy-To-Go Ebook Package

have been previously tested by a law

firm that does nothing but specialize in

filing bankruptcy petitions

Paid Services

If, after reading this ebook, you should

contemplate filing bankruptcy, print out

the forms and start filling them out

Even if you decide not to file

bank-be ready to hand to the attorney He/Shewill greatly appreciate your preparednessand it will be quicker to process yourbankruptcy petition

However, if you want to save $100’s inattorney fees, I can personally prepare you

a Chapter 7 or Chapter 13 bankruptcy andsubmit it as a “non-attorney preparer.” (It

is legal in all 50 states to file your ownbankruptcy with or without an attorney.) Iwill prepare your petition for $89.95 andsend it back to you through the mail Youthen take the papers and file them in court,attend your 5-10 minute 341 Hearing inabout 6 weeks and confirmation hearingwhich takes 2-3 minutes It’s a simpleprocess, which I will walk you through ifyou decide to us my services

But let’s read on to discover those 102things you need to know before filingbankruptcy That’s why you downloadedthis ebook for in the first place, right?

My best to you,

Victoria Ring

Victoria RingBankruptcy Paralegal

If you are considering filing for

bank-ruptcy, you are not alone Many people

have and will continue to file for

bank-ruptcy based upon the times with

corporate layoffs, downsizing and

continuing business failures Although

not inclusive, the general guidelines

below will help you determine if you

should consider filing bankruptcy

1 You should file for bankruptcy

when you cannot reasonably pay your

bills

2 If your income does not

suffi-ciently pay off or pay down your bills,

it’s time to consider bankruptcy

3 If your monthly debt is 1.5 times

your monthly income For example, if

you have a monthly net income of

$2,800 but your monthly expenses are

about $4,200, it’s time to think about

bankruptcy

4 If you cannot budget yourself out

of the debt within four years, it’s time to

seriously consider bankruptcy

5 If you are more than two months

late on your bills, bankruptcy may be a

consideration

6 If your loan or mortgage has been

“called” or accelerated, it’s time to

seriously consider bankruptcy

7 If you get a foreclosure notice

from the bank or a lender; it’s time to

seriously consider bankruptcy

8 If you have withdrawn from yoursavings account for two months; bank-ruptcy may be a consideration

9 If you are depressed about yourfinancial situation, it may be time to con-sider bankruptcy

10 If you have a severe financial back such as the loss of a job, majorsurgery without medical insurance, etc., it’stime to seriously consider bankruptcy.Generally, people filing for bankruptcy aredealing with the following situations:

set-• Loss of their job or their primarymeans of support;

• Been laid off from their job;

• Been demoted or given a significantpay cut;

• Experienced major family problemsleading to divorce, child custody or separa-tion;

• Excessive major credit card lems;

prob-• Catastrophic medical-doctor billsfrom an uninsured major surgery or illnesssuch as terminal cancer;

• Desperate financial situations withlittle hope

How Filing Bankruptcy Can Help You

11 Filing bankruptcy is as simple astaking a set of papers down to the Bank-ruptcy court, standing in line at the Clerk ofCourt, paying a filing fee and having thepapers date/time stamped and handedback to you (The court keeps the origi-nal.) A Judge will also be assigned at thistime This simple process takes about 10

minutes to complete This set of

papers that you filed with the court is

called a “bankruptcy petition.” The

moment the Clerk of Court stamps

your bankruptcy petition, the following

good things can happen to you:

12 Anybody you owe cannot contact

you in any way (once they receive

notice in the mail from the court.)

13 Any wage garnishments taken

out of your check will cease to be

lawful If the garnishment is taken out

of your check after you file bankruptcy

you may be entitled to a refund

14 Any foreclosure action on your

home or other real property is stopped

15 Any Sheriff’s sales are stopped

immediately

16 Any taxes you owe that are

currently being collected on by the

government are put on hold (while your

debts are being reorganized.)

17 Anybody coming to repossess your

auto, boat, furniture, appliances, or

any-thing else are stopped immediately and

cannot remove anything without the

Bankruptcy Court’s permission

Terms You Need to Know

Concerning Bankruptcy

18 Creditor — This is the person or

company you owe money to because

they extended credit to you

19 Debtor — This is YOU You owe

debts, so you are a debtor

20 Secured Debt — This is a debt you

owe for an item that could be taken awayfrom you if you don’t pay the bill Forinstance, if you don’t make your housepayment, the creditor (or bank) you owecan repossess your house

21 Unsecured Debt — This is a debt

you owe for something that cannot betaken from you For instance, anything youcharge on a credit card is an “unsecureddebt.” If you don’t pay the MasterCard billthis month, they cannot come and takewhatever you bought with the credit card.All they can do is harass you on the tele-phone until you pay the bill, turn the billover to a collection agency, or attempt toget a judgement against you (depending

on the amount you owe them.)

22 Asset — This is something you own

that has resale value Your car, TV set,computer, stocks, bonds, bank accounts,piggy bank, clothes, bed, etc are all thingsthat have some type of value that could beturned into cash These types of thingsare your assets

23 Discharge — This is what happens

when your debts are erased and you havecompleted your bankruptcy

24 Exemption — There are exemption

allowances allowed by the BankruptcyCourt to protect the assets you own thatyou need to keep in order to live a normallife For instance, you need a house to live

in, a car to drive, transportation to maintainthe car, clothes to wear, medicine refills,personal care items, etc The law allowsyou to keep these types of items by allow-ing you exemptions on them Whenanything you own is totally exempt from

the bankruptcy, no one can take it

away from you

25 Automatic Stay — The moment

a bankruptcy is filed, all creditor activity

to collect debts, obtain judgments, or

obtain property of a debtor to satisfy a

debt is completed stopped This is the

protection provided to you as a

con-sumer under the Bankruptcy law in the

United States

26 Relief From Stay — This is a

court order, requested by a creditor,

who asks the court to lift the Automatic

Stay that was immediately put in place

when the debtor filed the bankruptcy

petition If a creditor is granted a Relief

from Stay, the debtor will receive notice

from the court of its existence and the

bankruptcy attorney can prepare a

Motion on the debtor’s behalf to

re-quest the court to remove the Relief

from Stay (Of course, there must be a

lawful reason to do so.)

27 Reaffirmation Agreement —

This is what you file with the court if

you decide to pay a creditor outside

your bankruptcy For example, you

may want to reaffirm with Bob’s Auto

Sales when you file your Chapter 7

bankruptcy petition, because you want

to keep making payments on your car

since you need it to get back and forth

from work

28 Trustee — This is a real “live”

person that works for the Bankruptcy

Court who normally oversees the entire

process from beginning to end

con-cerning your bankruptcy

29 Conversion — This is when you

start out by filing one chapter of ruptcy and decide later to file anotherchapter For example, you originally file aChapter 7 but decide to convert to aChapter 13

bank-30 Dismissal — Among other things,

your bankruptcy case can be dismissed atany time if you fail to comply to any rules,don’t turn over asset monies that arerequested by the Trustee or if you convertfrom one Chapter of bankruptcy to an-other Your case is “discharged” if youcompletely pay off your Chapter 13 orwhen your Chapter 7 is legally finished

Chapter 7 Bankruptcy

31 In order to be eligible to file a ter 7 bankruptcy, you must be able to meetthese guidelines:

Chap-• You must reside or have a cile, a place of business, or property in theUnited States

domi-• You must not have received abankruptcy discharge within the last six (6)years or have had a bankruptcy casedismissed within the last 180 days

32 People who file a Chapter 7 ruptcy do so in order to discharge theirdebts and get a “fresh start” in life Thereare no income requirements to file aChapter 7 and people who file this type ofbankruptcy are those who can no longerafford to repay all their debts due to illness,unemployment, marital problems, unex-pected medical expenses, over-extendedcredit or other large expenses However,not all debts can be discharged For

bank-example, alimony, student loans, child

support and taxes that are less than 3

years old are non-dischargable and

must be repaid in full

33 Most consumers file a Chapter 7

bankruptcy and then reaffirm on the

debts they want to continue paying For

instance, you can file a Chapter 7 and

reaffirm on your house This could

possibly erase your other debts and

you would continue making your house

payments like you normally do now,

outside the bankruptcy

(Note: There is pending legislation

currently being debated in Washington

D.C to change this law, making it

harder for people to file a Chapter 7

and forcing them to file a Chapter 13,

but the law has not been enacted as of

the date this ebook is written.)

Steps That Occur in Filing a

Chapter 7 Bankruptcy

34 In order to be eligible to file a

Chapter 13 bankruptcy, you must be

able to meet these guidelines:

• Have a steady source of

in-come so that you can make regular

payments to the Trustee

• The total amount of your debts

cannot exceed $750,000.00 and

unsecured debts cannot be more than

$250,000.00

35 When your bankruptcy petition is

prepared and signed by you, it is filed

with the Bankruptcy Court You are

assigned a case number and a Trustee

or “interim” Trustee An interim

Trustee is the person who is responsiblefor overseeing your bankruptcy until theMeeting of Creditors, at which time you will

be appointed a new Trustee or the interimTrustee will be assigned to your case

36 If you plan to reaffirm on a debt(which means you want to continue payingthe bill on your own after the bankruptcy isover), your attorney or paralegal needs tosubmit a Reaffirmation Agreement to thecreditor, obtain their signature and file thiswith the court However, you can still paythe bill on your own without filing a Reaffir-mation Agreement; but it is best to file one

if the creditor you owe can repossesssomething you want to keep (i.e., car,house, TV, computer, tools, etc.)

37 The Trustee will send a notice to allthe creditors (people/companies you owemoney to.) This notice is normally sent 5days after you file your petition

38 The court will normally send you anotice informing you that you are eligible tofile bankruptcy You don’t have to doanything with this notice but keep it in yourpersonal file

39 The Trustee will then send all yourcreditors, including you, a notice informingyou of the hearing date when you shouldappear in court This hearing is oftenreferred to as the “Meeting of Creditors.”

40 At your Meeting of Creditors NOjudge will be present The Trustee will askyou some of the same questions youanswered when you first filled out thepaperwork for the attorney or paralegal;who originally prepared your bankruptcypetition

41 In actual practice, creditors rarely

appear at these hearings; however, a

representative from one of the

compa-nies you owe, or a person you owe,

may show up at this meeting They

normally only appear to ask where the

secure item is and if it is insured

42 If your bankruptcy case is a “no

asset” Chapter 7 bankruptcy, the

meeting will normally only last 5-10

minutes

43 If your bankruptcy case is a “no

asset” Chapter 7 bankruptcy; you

normally will not have to appear in

court again Essentially, you will

re-ceive a discharge through the mail and

all your allowed debts are forgiven

Chapter 13 Bankruptcy

44 People who file a Chapter 13

bankruptcy do so in order to keep

property in which a creditor has a lien

— like a house or car, or if payments

are behind and the creditor is about to

foreclose or repossess the property

The filing of a Chapter 13 will stop the

foreclosure sale and allow the person 3

to 5 years to repay some, but not all of

their debts Rather than wiping out all

their debts in a Chapter 7 proceeding,

Chapter 13 allows a person to

reorga-nize and pay a certain percentage of

their debts over a period of 3 to 5

years The unpaid balance is

dis-charged after the payment plan is

completed Payments are made from

each paycheck to the Chapter 13

Trustee, normally through employer

wage deduction

45 A Chapter 13 is NOT a bill tion loan, although many people look at itthat way Although it is a similar concept, abill consolidation loan is money actuallyloaned to you to repay other creditors In aChapter 13, no money is loaned to youbecause you make your monthly payments

consolida-to the Trustee, who disburses the moneyamong your creditors

46 Your priority claims are paid first in aChapter 13 Priority claims include debtsfor things like taxes, child support, etc

47 The amount you owe unsecuredcreditors, like medical bills, credit cards,etc can normally be paid back as low as5¢ on the dollar (This figure is not written

in stone It is subject to change depending

on your individual State laws, type of debt

it is, as well as the income and budget ofthe debtor.)

48 You are normally allowed to keepyour home, car and everything else youown when you file a Chapter 13 as long asyou make regular payments to the Chapter

in his/her jurisdiction In a Chapter 7, theremay be more than one Trustee, called an

“interim” as well as a “trustee.”

50 Your attorney or paralegal will

also file a Chapter 13 Plan with your

bankruptcy petition that details the

amount of your monthly payments and

the length of time you are going to be

in the Chapter 13 Plan

51 This amount you pay each month

to the Trustee is determined by the

amount of money you currently make

and how much money you need to live

on each month A good Chapter 13

bankruptcy attorney or his paralegal is

skilled at balancing these two figures

so you can easily afford the Chapter 13

payment each month It is not to the

advantage of the attorney or paralegal

to give you a payment you can’t afford

This would cause problems later down

the road So don’t be afraid that your

payment will be too high for you to

afford

52 The Trustee will send a notice to

all the creditors (people/companies you

owe money to.) This notice is normally

sent 5 days after you file your petition

53 The court will normally send you

a notice informing you that you are

eligible to file bankruptcy You don’t

have to do anything with this notice but

keep it in your personal file

54 The Trustee will then send all

your creditors, including you, a notice

informing you of the hearing date when

you should appear in court This

hearing is often referred to as the

“Meeting of Creditors.”

55 At your Meeting of Creditors NO

judge will be present The Trustee will

ask you some of the same questions youanswered when you first filled out thepaperwork for the attorney or paralegal;who originally prepared your bankruptcypetition

56 In actual practice, creditors rarelyappear at this hearing because they knowthey will be getting paid through theTrustee; however, a representative fromone of the companies you owe, or aperson you owe, may also show up at thismeeting, but they normally only appear toask where the secure item is and if it isinsured

57 After the Trustee has approved yourbankruptcy, you are required to pay yourfirst Chapter 13 payment Your paymentmust be in the form of a money order orcashier’s check No cash is accepted

58 The Trustee will normally provide youwith information on how to contact his/heroffice with any questions as well as anaddress where to mail your payments

59 At this time, you may want to set up apayroll deduction so you don’t have toworry about writing a check every month.Because a payroll deduction may take 4-6weeks before it begins, you need to con-tinue making payments to the Trustee onyour own until the wage deduction starts

If you get behind in payments, your casecould be dismissed and you will have tostart all over again

60 Finally, a Confirmation Hearing isscheduled but you normally do not appear

in court Your attorney normally appears

on your behalf to simply confirm that youare approved to be in the Chapter 13 plan

Changes in Payments During a

Chapter 13 Bankruptcy

61 Nothing stays the same During

the 3-5 years that you are making

regular payments to the Chapter 13

Trustee anything could happen You

may lose your job Your spouse may

lose their job You may have a new

baby You may inherit some money

Your old car may conk out and you

have to replace it A million things can

happen, which means your Chapter 13

payment can be lowered or raised

depending on the circumstance

62 Many people, when something

occurs where they cannot make a

Chapter 13 payment one month, will

simply not pay it This is a very bad

idea All you have to do is contact your

attorney and ask them to file a Motion

to Modify the Chapter 13 Plan You

will need to go to the office and supply

the attorney with new, updated income

and budget information, which explains

why you cannot make your normal

Chapter 13 payment, but it is well

worth the 2 hours of time

63 If you need to go into debt and

purchase something on credit while

you are going through a Chapter 13

bankruptcy, your attorney can file a

Motion to Incur Debt for you This will

allow you the needed money to

pur-chase the item (Example: Sell one car

and purchase another one.)

Chapter 11 Bankruptcy

64 Chapter 11 is similar to a Chapter

13, but it is normally filed by larger

business or individuals with a large amount

of assets or debts that exceed one milliondollars In a Chapter 11 bankruptcy youare allowed to still operate your businessbut your creditors and the court mustapprove a plan to repay your debts There

is no Trustee unless the judge decides thatone is necessary; however, if one is ap-pointed to your case, the Trustee will takecontrol of your business and property.(Note: I will not cover Chapter 11 inthis ebook because most consumers file aChapter 7 or Chapter 13 bankruptcy.Please consult with an attorney if you areinterested in filing a Chapter 11.)

Rules that Apply to All Forms

of Bankruptcy

65 Any debts you make AFTER you fileyour bankruptcy petition cannot be in-cluded in your bankruptcy

66 Any debts you made BEFORE youfiled your bankruptcy petition, but forgot toinclude when you filed, can be added byyour attorney He/she will file an Amend-ment to whichever Schedule of the bank-ruptcy petition is effected by the additionaldebt(s)

67 After your bankruptcy is over and thecreditors have been satisfied, any lien youhave is not automatically removed fromyour property The attorney will need to behired to remove the lien

68 Never make the mistake of running

up debts on all your charge cards and thenfiling bankruptcy You can be held respon-sible for any charges you made within thelast ninety (90) days

Debts That Cannot be Discharged

69 Some of the debts you owe

cannot be forgiven in bankruptcy and

will need to be repaid by you Even if

the debt is included in your original

bankruptcy petition, any unpaid

bal-ance must be paid by you when the

bankruptcy is over The types of debts

I am referring to include, but are not

limited to the following:

• credit obtained by false

pre-tenses or acts of fraud;

• all taxes, customs or duties;

• debts owed for fines and

penal-ties to another government unit;

• student loans;

• child or spousal support;

• luxury items valued at $500 or

more that were purchased sixty (60)

days from the date you filed your

original bankruptcy petition;

• cash advances of $1,000 or

more that were made within sixty (60)

days from the date you filed your

original bankruptcy petition;

• debts made due to an act of

embezzlement or larceny;

• debts owed a party where you

maliciously caused injury to another;

• debts owed for the death or

personal injury while intoxicated by

drugs or alcohol

The First Steps to Filing a

Bankruptcy Petition

70 Take a file folder and put a

statement from every creditor that you

owe in it If you don’t receive a

monthly statement from the creditor,

put the following information on a sheet

of paper and put it in your file:

• Name and complete mailing dress of who you owe;

ad-• Your account number (if cable);

appli-• The name of who owes the debt(husband, wife or both);

• The total amount you owe thiscreditor;

• How much your monthly paymentsare;

• The date you originally went intodebt with this creditor (If you can’t re-member the exact date, just an approxi-mate year [i.e., 2001, 2002, 2003, etc.] willdo);

• If the debt is for a credit card,record the last date you charged on thiscredit card If you charged less than 90days ago, you need to write down theamount you charged and the reason forthe purchase.)

71 In the same file folder, also put in thefollowing documents:

• Your current paycheck stubs;

• If you are unemployed, includecopies of documents showing any incomeyou receive(d) from unemployment,worker’s compensation, child support, SSI,social security, retirement, estate, etc

• Mortgage and deed if you own orare purchasing a home or other realproperty (i.e., land, apartment complex,etc.);

• Copies of your car, boat, cycle, mobile home or other titles to motorvehicles;

motor-• Copies of your tax returns;

• Copies of any court proceedingsfiled against you;

72 When you have put together your file,you will have most of the information

needed to file a bankruptcy petition.

However, the attorney, or whoever you

hire to prepare your bankruptcy petition

may also require other documents,

depending on your particular situation,

but they will let you know when you go

to their office for the initial intake

interview

73 A bankruptcy petition is then filed

in court It contains several sheets of

paper that includes schedules and

forms Each schedule and form relates

to different items that must be filled out

properly Normally people choose to

hire an attorney to prepare their

bank-ruptcy petition, but some people hire

independent paralegals, and some

people purchase bankruptcy kits and

attempt to do it themselves

74 If you decide to hire an attorney,

try to find someone who specializes in

the field of bankruptcy In other words,

your best choice for an attorney is one

who does nothing else but specialize in

bankruptcy law exclusively You will

probably also find bankruptcy attorneys

that also do divorce, wills, probate, and

DUI; but if given a choice between the

two — chose the attorney who

special-izes in bankruptcy

(Note: If you are in the southeastern

district of Ohio, I recommend Lloyd D

Cohen & Associates, the attorney I

work for at 614-444-4211.)

75 Calling around to different

attor-ney offices and asking them what they

charge to file a bankruptcy is NOT the

most efficient method of locating a

good bankruptcy attorney Attorneys

who advertise cheap prices for filingbankruptcy petitions in your daily newspa-per, often do not file all the schedules andforms at one time (which is perfectly legal)and will charge you additional money to filethe rest of the petition within the 20-30 dayallowance After being “nickel-and-dimed”

to death, you normally pay more money tothis attorney than if you just hired a com-petent attorney in the first place

76 The best way to locate a good ruptcy attorney is to first determine if theyspecialize in bankruptcy If you cannotlocate someone in your area that special-izes solely in bankruptcy, then choose anattorney who has been in the practice for

bank-at least five (5) years or more (Just callyour local Bar Association and ask for areferral.)

77 Your can hire a freelance bankruptcyparalegal to prepare your bankruptcypetition, but if problems come up (such aslitigation with a creditor or the filing ofMotions), it would be best to hire an attor-ney to do these things for you

78 You can purchase a bankruptcy it-yourself” kit but unless you know how toprepare the bankruptcy petition in a man-ner to present to the court, these kits will

“do-do absolutely nothing for you except giveyou some practice at filling out forms

79 In reference to the “do-it-yourself”kits, filing bankruptcy is not simply fillingout a set of forms and handing them to thecourt For instance, if you don’t knowanything about exemption allowances youwill not know how to include them and yourpetition will be rejected or you may losesomething you own

How Your Credit Will Be Effected by

Bankruptcy

80 If you are behind in paying your

bills, your credit is already effected

Filing a bankruptcy may actually be

your first step in repairing a bad credit

situation When a creditor finds a

bankruptcy on your credit report, it

shows them that all prior credit

prob-lems have been resolved The question

then becomes, “Are you creditworthy?”

81 Every creditor is different and

each one treats bankruptcy with a

different set of rules for determining

your creditworthiness Although there

are many exceptions, normally a

creditor likes to see how well you do in

paying your bills during the first year or

two after filing bankruptcy before they

extend new credit to you So although a

Chapter 7 bankruptcy appears on your

credit report for ten (10) years, and a

Chapter 13 appears for seven (7)

years, most people only find it to be a

problem for a couple of years after

filing — provided everything else looks

good on their current credit report

82 In addition, there are 1,000’s of

creditors who extend credit to people

who have filed bankruptcy The

inter-est rates are normally higher, of

course, but you can obtain credit easily

with one or more of them One of the

best ways to build your credit after

bankruptcy is to obtain a “secured”

credit card This is one where you put

money in a bank and the bank issues

you a credit card The credit limit of the

credit card will be the same amount of

money you have in their bank After

you have shown that you make timelypayments, your credit line may be in-creased without you depositing any moremoney

83 However, the fact remains — one ofthe main reasons for filing bankruptcy is toget OUT of debt — not back into it Youshould take responsibility for your ownfinancial spending and saving, making surenot to get to the point where you have tofile another bankruptcy Once you experi-ence total freedom of paying for things youwant to buy, and owning them free andclear — you will enjoy life more and grow

as a human being About the only itemsthe average American really needs to gointo debt for is an automobile for transpor-tation and a home for their family to live in.Everything else should be purchased out

of the monthly income, or saved for andpurchased in full The only reason Ameri-cans are in debt is because they “want itnow!” and don’t have the patience to wait

Other General Questions and Answers

84 If I am married, does my spousehave to file bankruptcy?

No, however the spouse that doesnot file will not receive the benefits ofbankruptcy In other words, if the non-filingspouse is jointly liable on certain debts, he

or she will remain liable for those debts ifthe filing spouse filed for a Chapter 7bankruptcy He or she will also remainliable for any amount not paid for in thefiling spouse’s Chapter 13 plan On theother hand, the non-filing spouse will nothave bankruptcy noted on his or her creditreport

Therefore, if the debts you owe

are also owed by your spouse, or

co-signed by your spouse, it would be to

your benefit to file a bankruptcy

to-gether as a married couple If most of

the debts are in your name only, you

may consider filing a bankruptcy as the

only debtor

85 What if I am unmarried but living

with someone? Can we file a

bank-ruptcy together?

At the present time, if you are

living together with a significant other

but are unmarried, you cannot file a

bankruptcy together, even if the bills

are in both your names In this case,

each one of you would have to file

separate bankruptcy petition A

com-petent attorney or paralegal can

sepa-rate the expenses and budget so that

each of you pay 50% of the day-to-day

living expenses (if both of you share

the expenses) and submit the

informa-tion properly to the court

86 Will bankruptcy stop a wage

garnishment?

Yes, some of the money

gar-nished from your paycheck may even

be returned to you It all depends on

how much was garnished and when it

was garnished If your wages are

currently being garnisheed, a

Notifica-tion of Stay pleading need to be filed in

court as well as a letter mailed to the

creditor and your employer to stop the

garnishment after your bankruptcy

petition is filed

Stopping a wage garnishment is

possible because whomever you owe

that is garnishing your check is now beingpaid (or is being discharged) through thebankruptcy petition you filed As soon asthe clerk file stamps your bankruptcypetition, you have immediate protectionunder the United States Bankruptcy Courtand every creditor you owe must proceedthrough this court to collect anything fromyou

87 How can I immediately stop creditorharassment?

The filing of a bankruptcy underChapter 7 or Chapter 13 will IMMEDI-ATELY bring the harassment caused bycreditors to a HALT Once your bankruptcyhas been filed, creditors are forbidden fromtaking action against you or against yourproperty to collect money you owe them Ifthey try to do so, they can be held incontempt of court This is the advantage

of the law, administered by the UnitedStates Bankruptcy Court, and provided as

a way to help citizens get “anotherchance.” Even if there is a wage garnish-ment or other legal proceeding under way,the filing of a bankruptcy will bring it to ascreeching halt, giving you the opportunity

to take care of your financial affairs in anorderly and permanent way

88 What if I owe the IRS back taxes?How will bankruptcy help me?

Most tax debts cannot be discharged

in a bankruptcy Trust funds and ing taxes you owe, such as sales taxes oremployee withholding obligations cannever be discharged However, incomeand self-employment taxes can be dis-charged if they are at least three (3) yearsold and the tax returns have been on filefor at least two (2) years

withhold-In situations like this, a

bank-ruptcy can be a great help in many

ways The biggest benefit is that you

may be able to reduce the amount of

the tax you owe In a Debt Adjustment

Plan, you can also stop interest and

penalties on all taxes you owe — even

the ones that are non-dischargable

This will place you in a situation where

it will be easier to pay your taxes off

89 How much does it cost to file

bankruptcy?

At the present time, the court will

charge you $200.00 to file a Chapter 7

bankruptcy petition and $185.00 to file

a Chapter 13

90 When does a bankruptcy take

effect?

When the Clerk of Court receives

your bankruptcy petition and date/time

stamps it, your bankruptcy is

immedi-ately effective The Court sends notice

of your filing to all of your creditors and

bill collectors generally within 24-48

hours after filing That is why it is so

vitally important to include complete

addresses and zip codes of all the

people you owe on your bankruptcy

petition The court will send a copy of

your petition to all these creditors so

they will stop harassing you If those

addresses are not correct, the creditor

won’t know you filed bankruptcy and

will continue to harass you It is also

important to list all the collection

agency addresses so they can be

notified as well Upon receipt of the

notice of your filing, creditors and bills

collectors are prohibited from having

contact with you

If your should receive any harassing

or annoying creditor calls after filing yourbankruptcy petition, a letter can be mailed

to the creditor which spells out Section 362

of the Bankruptcy Code (Automatic Stay.)This letter prohibits the creditor fromcontacting you again or risk being held incontempt of court

91 Am I a “bad” person because I filebankruptcy?

You are NOT a “bad” person cause you decide to file for bankruptcy.Back in the old days (pre 1900), if a personwent bankrupt, creditors stepped in, soldeverything the person owned, split themoney between themselves, put thebankrupt person out in the street and make

be-a public mockery of them Therefore, this

is why people who have not kept up withthe times, still feel that bankruptcy is a

“bad” thing to do But that was over 150years ago! The economy has changed,employers have changed, life is morecomplicated, interest rates are higher thanthey have ever been in history and themoney you make doesn’t reach as far as itused to just five years ago

Any one of these factors could cause

a “good” person who was responsible andfinancially secure, to suddenly considerfiling bankruptcy Not one of us is immunefrom the world’s problems So if therecomes a point in your life where you find itnecessary to take advantage of the bank-ruptcy law, don’t feel “guilty” about it Infact, you should be glad the United Stateshas set up a governing body to protectpeople like you and me