What is bankruptcy consultation?
If you think you have reached a stage where you cannot cross over there a mountain of accumulated debt, then you have to look at bankruptcy. There are different types or chapters of bankruptcy like chapter 7, chapter 13, chapter 11 etc. Bankruptcy code is complex (after 2005 bankruptcy reform act). As an individual, you have to hire services of a bankrupt attorney else you will land yourself in more legal trouble.
How long is a bankruptcy consultation?
The first bankruptcy consultation is the first stage in filing for bankruptcy, and this meeting will last no more than 40 minutes (approximate).
What happens at a bankruptcy consultation, you wonder?
When you contact a bankruptcy firm, you need to fill out an online form where you have to give all your details regarding debts and income. Next, when you physically go to that attorney office for the first time, be prepared for a handful of physical forms, asking for more detail about your debt in every form and size (amount). Therefore, when you think about how to prepare for bankruptcy consultation, the answer is simple. Detail all the debts and income you know. Invariably there would be some debts and some income, which you will miss to inform. Do not worry; the bankruptcy firm will extract that info from you. Just be brutally honest with them.
After you are initially welcome in the office, you will receive a sympathetic paralegal who will hear out your story. Next, to fill in the initial consultation form, he will start drilling into the details of your debt and income. Do not worry; nobody will probe you as to how you came to this sorry state of affairs. In bankruptcy, the stress is on how to rid you of debts: retaining as many assets as possible while paying the debtors fairly. You will get a brief on what is bankruptcy, and which chapter will be the best for you. You will understand what can still be considered as debt and has to be paid, even after the bankruptcy discharge. The lawyer will also ask about your equity (the difference between what you possess as an asset and their actual market value)
Next, to ponder is…
What happens after initial bankruptcy consultation?
Well after the first consultation, there will be some more consultations, to drill your debt (many of which may be hidden or you may have thought too insignificant to declare). You need to undergo further consultations to see whether you have violated any conditions for bankruptcy, like spending on your credit card even after you missed payments on principal and interest.
Then you will file your bankruptcy petition through your attorney. In the absence of a bankruptcy firm, you are sure to lose your way and money through the filing process, which is complex. You will submit the petition in that bankruptcy court, under whose jurisdiction you fall.
Free bankruptcy consultation: Free! Not really
Are you thinking of bankruptcy phone consultation or enticed by the ad that says, “Free bankruptcy consultation”. Actually, it is a misnomer. When you call a bankruptcy firm for a consultation, in all probabilities a paralegal will answer your call.
- guide you through the online filing of the bankruptcy client information forms available on their site, to understand your debt status.
- inform you regarding the documents that you should carry when you physically come for consultation.
- walk you through the bankruptcy consultation checklist.
If you think that, you can carry out the full consultation via phone with the attorneys, that’s not feasible.
Bankruptcy 24 * 7 attorney helpline
However, there are times when you are desperately in trouble and do not have the mentality to wait for bankruptcy consultancy the next morning. Alternatively, it could be the beginning of a long Christmas week holiday while you need advice at that moment. For such trying times you cannot but avail emergency bankruptcy consultation over the phone. Do not worry. Some law firms have 24*7 attorney helpline in this type of cases. However, the downside is that the bankruptcy consultant allotted to you may not be the best available (you cannot expect legal experts to be available round the clock) and the charge may be higher for this emergency service. However, it is better to get some reassuring, real consultation through such bk hotline, rather than tossing around the bed or drinking yourself silly all through the night.
Chapter 7: A brief
When considering bankruptcy, we frequently consider chapter 7. Chapter 7 allows you to get rid of debt quickly. However, in the process, you lose almost every asset that you have painstakingly built over the years. Your house, that could have served your generation for years, is lost forever not to be your ever again. If you think, you have that in you to pay the debts, consider chapter 13. Through this, you can reorganize the payment term of your debts over a longer period.
How about brushing off the unsecured debts via chapter7 and then paying the secured debts via chapter 13 over a period of 3-5 years? Chapter 13 helps to protect your assets. If you think you can pay a re-negotiated amount over a longer period of time (not greater than 5 years) to the trustee board appointed by the bankruptcy court, try chapter 13.
Apart from trying bankruptcy code to get your ever-increasing debt off your back, debt Relief method awaits you. Instead of chapter 7 bankruptcy, where your assets are stripped, debt Relief method does not touch them. Debt Relief firms try to secure a much lower one-time lump sum amount to be paid to the lenders. In return, lenders forego the rest amount of debt. They think it is better to get a major portion of the debt back as a one-time payment, rather than the whole debt becoming bad.
Once the client declares himself insolvent, the process of debt recovery becomes tougher. So, a one-time lump sum payment is more attractive to the lender vis a vas NPA. The debt Relief goal by debt relief firms is to try to secure as much lower one-time payment as possible for the complete debt wipe off their clients. If that is successful, these debt relief firms take a commission on the debt amount cleared.
Bankruptcy Consultation Questions
In case, you fancy wiping off 80% of your debt with relative ease (the sense of asset loss will come later), your bankruptcy firm will have bankruptcy consultancy questions to ask before chapter 7. Chapter 7 is more prone to writing off your unsecured debts with your non-exempt assets. Therefore, the topic will veer around all types of unsecured debts like credit card vs. your tangible assets. The lawyer will examine the assets to see whether they fall under non-exempt category; your social security corpus may be exempt but if you mix it with non- social funds, the exempt may remain valid. A lot depends on the trustee members to decide which item is exempt or which are not.
Things to physically and mentally carry in when you walk in the office.
In all these melee you must be wondering..
What to bring to a bankruptcy consultation
The list is long, but let me put here some common items that you should carry when you walk in the bankruptcy firm.
- Carry your tax returns of the previous 2 years for chapter 7 and 4 years for chapter 13.
- Your payslip for the preceding 6 months.
- In case you have a business (most probably not doing too well currently),its profit and loss statement.
- Value of equity that is assets (a house to the sofa inside the house to the car in the garageand all other tangible assets) vs. their current value in the market.
- Current insurances, from you to your car.
- Preceding and pending utility bills.
- Credit card statements.
- Documentation of every sort of expenses, whether that be of laundry, for food. Show expenses for transportation.
- Statement of bounced cheques, overdrafts, last six months bank statements.
- List all the properties whether that is of 10 acres or ten feet with their deeds. State any mortgages you have.
The above was a list of common bankruptcy consultation checklist. In reality, there are innumerable more items to list. The office of the legal firm will guide you regarding this list.
In short, do not hide anything. Do not count on the ring that has been given by your family as a family heirloom. Everything has to painfully accounted. Miss any asset out debt, you run the risk of fraud when asking for bankruptcy mercy.
You should find the right bankruptcy firm and the right bankruptcy lawyer. Do not go only the catchy headlines line “Call our bankruptcy lawyer, now”. Check the public opinions from various forums, verify whether they have a reliable helpline and a bankruptcy hotline ready to help you whenever you relay need them. Try to gauge the firm’s percentage success rate in providing chapter 7, chapter 13 or debt relief.
All the States provide a bankruptcy hotline (mostly a common number provided by Fed and supported by a centralised registry – 866 – 222-8029), where the important bits about their status of a bankruptcy case can be heard at no cost to the dialling client.
Importance of income tax returns in Bankruptcy
One very important aspect in filing for bankruptcy is to have proper records of filing income tax returns. If the bankruptcy petitioner has not properly and honestly filed the income tax returns in preceding years, he runs the risk of having his bankruptcy petition rejected. The income tax returns have to be submitted to the court at least 7 days before the start of hearing by the trustee. If improper filing is suspected by the trustee, it will result in the case being halted time and again for clarification.
Georgia bankruptcy law features especially for chapter 7
In the state of Georgia, you follow the Georgia Bankruptcy law. Among all the bankruptcy codes, chapter 7 is the most popular. However, in Georgia, you cannot discharge certain debts in this chapter. In case you fall back, you have to pay those amounts, even after relief from others after discharge. These include unpaid instalments of child support, alimony or any other family support amount.
If you have incurred any debt arising out of non-payment of the compensatory amount for causing harm or death while driving intoxicated, its non-dischargeable in Georgia under chapter 7.
Students loans are also nondischargeable. If you can prove sufficient hardships, then there’s a case for the discharge of debt. However, it is rarely proved.
How much does it cost?
In case you wonder about the cost of filing a bankruptcy case, we can give you an idea but it will significantly vary when you get down to the ground. The main fees are of course charged by the bankruptcy attorneys, which on an average is 1250 $ for filing chapter 7. On the federal PACER website, you can go through the fees charged by attorneys in your locality. The charges for filing a chapter 7 bankruptcy is 330 $ while for chapter 13 is 310 $. Another big expense is the credit management and counselling course which can set the debtor back by 100$.
If you want to emerge successfully in your fight in Chapter 7 or 13, you have to have the bankruptcy lawyer by your side. DO not commit the mistake of going through it pro se. Saving a few hundred dollars by not engaging a good bankruptcy lawyer quickly will strip you of your thousand dollar assets a few weeks later. So, hurry and dial or contact us for bankruptcy consultation physically before the lender gets you.
David Galler is an experienced bankruptcy attorney based in Atlanta, Georgia. For the last 29 years he has filed over 10,000 bankruptcy cases. He has a FIVE STAR client rating on Avvo, Kudzu.com, RateABiz.com, and Google+, among other sites. Over 99% of all Chapter 7 cases he filed have been discharged.