Should I File for Bankruptcy Protection?
Bankruptcy - Do Not Feel Guilty
Bankruptcy is about starting over
fresh. It is about getting back in control of your financial future. Do not feel
any shame for considering bankruptcy. In today's economy, many people, from all
walks of life, are in your situation.
We have clients who were making $200,000 plus last year and live in $600,000
dollar homes. Then again, we have an 18 year old who started out in life with
$35,000.00 in debt (thanks MC/Visa/Amex) due to "free" credit cards. Who gives
an 18 year old a $5,000.00 credit line? Credit card companies.
Bankruptcy Is Not Your Fault
Take control, feel no shame. Dotcom went bust. The telecommunications industry has gone South.
Thousands have been laid off. This is not your fault. You cannot control the
economy, you cannot control pie in the sky investors, and you cannot control
voodoo accountants at multinational corporations (Enron), but you can take
control back by contacting a bankruptcy lawyer. Since you were 4 years old, marketing companies have been trying to get you to buy
into neighbor Jones' dream. If you didn't have the cash, "charge it."
The Credit Card/Debt Trap
Credit card companies have been begging
you to charge up at 23% (some 24.99%) for years. How many "account balance"
transfer offers have you received? How many new extensions of credit. Here's
the trap, after you have established a decent payment history with a credit card
company, they up the credit limit. "Congratulations," they say. Now that you
have more credit, you spend it. They will keep upping that credit limit until you can barely make the
minimum payment. Now they own you. Make the minimum payment on your Mastercard
or Visa and you will be paying that debt for 35 years or more. Don't feel any
shame about taking back control. The only thing the credit card companies have
to fear is the United States Bankruptcy Code and a bankruptcy lawyer.
That is why they lobbied
Congress to the tune of $25,000,000.00 to get the bankruptcy laws changed to
PROTECT THEM from you. If you are considering bankruptcy, the bankruptcy lawyers
at the Polk Law Firm offer a low-cost consultation to help you come to
terms with your financial future. We understand.
Chapter 7 Bankruptcy
Chapter 7 Bankruptcy is about
liquidating all nonsecured debts. Chapter 7 Consumer Liquidation
Bankruptcy applies when the monthly payment on all personal overhead
(rent/car payment/utilities/groceries) exceeds your take home income.
You will keep your home and your car under the current state of the law. Click here to read
7 Liquidation Bankruptcy.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy is about forcing
creditors to negotiate with you subject to a bankruptcy trustee's approval.
Chapter 13 Bankruptcy forces creditors to settle up for dimes on the dollar.
Once again, you take control and you set forth a Chapter 13 Bankruptcy plan that
you can work with. Chapter 13 Consumer Bankruptcy applies when your income
exceeds your monthly personal overhead to some extent such that you are able
repay some portion of the debt back. Once again, however, recognize Chapter 13
Consumer Bankruptcy is about putting you back in control. Click here to read
13 Wage Earner Bankruptcy.
To learn more above the differences between Chapter 7
Liquidation Bankruptcy and Chapter 13 Wage Earner Bankruptcy,
Credit Card Debt Management and
Credit card counseling and debt
management services - we don't buy it. Click here for
Client's Story. Numerous clients have come to us after
using a debt management company like C.C.C.S. Recognize "nonprofit"
organizations like C.C.C.S. is
funded by the credit card companies - are they on your side? No. Further, some
counseling services require you to give them your paycheck. They take their fee,
pay the credit card companies a payment, and then give you a monthly stipend.
Don't do this. Take control. Don't lose control of your financial future. Know
what else - if you breach your contract with a debt management company, you loose
all the benefits you have gained - penalties and interest all gets put back. Did
you contract with C.C.C.S. to protect your credit. They are right there on your
credit report as Debt Consolidation Service or Credit Management. A negative entry that tells creditors
that you are a bad credit risk. Consumer bankruptcy and consumer bankruptcy
attorneys and lawyers are about empowering you. Don't let someone else
control you. Click here to learn more about
consumer credit counseling services.
Getting Credit After Bankruptcy
You will get credit following your
bankruptcy. Some clients have been very concerned about the state of their
credit after filing bankruptcy. It is a fact, a bankruptcy entry will appear on
your credit report for 10 years following the discharge. This does not mean that
you will not get a credit card, buy a home, or car for 10 years. Far from it,
creditors want you to borrow. Shortly after your bankruptcy discharge, we can
almost promise that you will receive a credit card offer. Probably from
Providian. The fact is, you no longer have the majority of your debt; you have
an ability to repay (income is freed up), and you can't declare bankruptcy
(Chapter 7) again for six years. Further, the probability of a consumer
declaring bankruptcy a second time in their lifetime is low (does happen but not
The Bankruptcy Attorneys
at the Polk Law Firm Understand
The Polk Law Firm offers a free bankruptcy consultation. We are here to help you take back
control of your financial future. Call our office at 214-265-0808 or fill out
the form below. In order to make your appointment
more meaningful download our
bankruptcy questionnaire in Adobe PDF format.
Chapter 7 or Chapter 13?
The choice of chapter depends on many factors individual to
your situation, and is one of the most important reasons to get good legal
advice before filing. Which chapter is best depends on the nature of
your debt and the nature and value of your assets.
In general, the choice of chapter is not yours
to make but is governed by the "means test." If your monthly overhead
(mortgage or rent + insurance + taxes, etc.) exceeds your monthly net income,
then you qualify for a Chapter 7 Bankruptcy. If your monthly net income
exceeds your monthly overhead, then you qualify for a Chapter 13 Bankruptcy.
Chapter 7 is the most frequently selected kind of bankruptcy
for individuals. The debtor receives a discharge of most unsecured debts
within several months of filing the case. If the debtor's income appears high
enough to permit some repayment of debt, the trustee or the court may move to
dismiss the case for "substantial abuse". The theory is that
to permit someone with the ability to repay to file Chapter 7 and avoid
repayment abuses the bankruptcy system. This is termed "substantial
abuse" - catch phrase with the U.S. Congress.
If your debt is mixed business and consumer it is important to
know what the legal form of the business is. Corporations and
partnerships can file Chapter 7 and Chapter 11; the choice depends on
whether the business can be reorganized in Chapter 11 or will be liquidated in
Chapter 7. Sole proprietorships are treated for bankruptcy purposes as
just one kind of asset of the individual who owns them; thus the owner
of a troubled business must file an individual bankruptcy, including all of
his assets and liabilities, personal and business, to obtain bankruptcy court
Chapter 13 is frequently a better choice if you have debts
that are not dischargeable in Chapter 7; if you are in default on
mortgages or car payments; if you have more property than can be exempted
from creditors in Chapter 7; or if you owe taxes or other debts that are
not dischargeable in Chapter 7.
To be eligible for Chapter 13, you must have regular income
and debts below a certain level.
Debtors choose to file a repayment plan under Chapter 13 when
|they owe debts not dischargeable in Chapter 7 ( such as taxes, child
support, fraud judgments) |
|they have liens
that are larger than the value of the assets securing the debt
|they have years of unfiled taxes |
|they are behind on car or house payments |
|their assets are worth more than the available exemptions.|
The scope of the discharge is different in each chapter.
The Bankruptcy Code makes the Chapter 13 discharge more encompassing, to
encourage individuals to use Chapter 13 to repay a portion of their debts.
Put most simply, most unsecured debt is dischargeable.
Most secured debt survives bankruptcy as a charge on the property to which it
attaches unless a court order modifies the lien.
Click here to read more about
Chapter 7 Liquidation Bankruptcy
Click here to read more about
Chapter 13 Wage Earner Bankruptcy.