Frequently Asked Questions
WHAT IS BANKRUPTCY?
A bankruptcy is a legal declaration where an individual or organization is unable to pay its creditors or debts. Bankruptcy filings are mostly regulated by laws under the jurisdiction of the federal government. The validity of bankruptcy claims and exemptions are governed by state law and vary from state to state.
HOW DO I KNOW IF I SHOULD FILE FOR BANKRUPTCY?
You should file if you are unable to pay your debts and there is no possibility that you ever will. The most common reason for filing for bankruptcy is unemployment, large medical expenses, overextended credit and other large unexpected expenses. Deciding to file for bankruptcy is a difficult decision. Valuable factors to consider are your alternatives, the type of bankruptcy that is best for you, and which debts will be discharged if you file bankruptcy. This is where my office can be of the greatest assistance with OUR TOTALLY PRIVATE, FREE CONSULTATION.
WHO CAN FILE FOR BANKRUPTCY?
Any person, partnership, corporation or business trust may file bankruptcy. In addition, charitable or social organizations may also file bankruptcy. United States citizenship is not a requirement for filing bankruptcy.
AFTER I FILE FOR BANKRUPTCY, WILL MY CREDITORS STILL BE ABLE TO CALL ME?
Yes, when filing for bankruptcy the “automatic stay” prohibits creditors from trying to collect on debts. These efforts include being prohibited from contacting you in order to collect the debt. When you hire an attorney, any communication from a creditor is usually required to be made through your attorney.
WILL FILING FOR BANKRUPTCY STOP COLLECTION EFFORTS?
This answer depends upon the type of creditor that is after you. When filing for bankruptcy an “automatic stay” goes into effect. The automatic stay protects you from most creditors from taking action to collect the debts. However, a creditor may remove the protection by requesting removal from the bankruptcy court.
HOW LONG WILL A BANKRUPTCY APPEAR ON MY CREDIT REPORT?
A bankruptcy filing may appear on your credit report for up to (10) years. This change on your report will make it difficult to borrow money. However, your credit rating may eventually improve since many of your debts will be discharged. This is not to say that you will be unable to borrow money. Other factors will help determine your credit score such as your general ability to pay back a loan.
CAN DEBTS INCLUDED IN A BANKRUPTCY BE REPORTED INDIVIDUALLY? HOW LONG DO THE CREDIT BUREAUS KEEP MY CREDIT INFORMATION? CAN THE RUNNING OF THE REPORTING BE EXTENDED?
Yes! Although most (in some cases all) debts are included in the bankruptcy, they can still be reported individually but must reflect the correct delinquency dates and can only be reported for the 7 1/2 year reporting period while the bankruptcy itself is reported for 10 years.
Section 623 of the FCRA requires furnishers of information to consumer reporting agencies to report accurate (section 623(a)(1)), complete and updated information (Section 623(a)(2)).
The credit bureaus keep your personal credit history for 7 and 10 years:
Unpaid Tax Lien – Indefinitely
Chapter 7 Bankruptcies – 10 years from date filed.
Public Records – 7 years from the date of payment;
Closed or Inactive Accounts – 10 years from the date of last activity;
Derogatory Accounts – 7 years from the date of original delinquency;
As of December 29, 1997 the reporting period runs 7 ½ years (7 years plus 180 days) from the date (month and year) of the last delinquency (known as “last missed payment:).
So, regardless of how long a creditor waits to charge off, sell or transfer a debt, `they must report the true and correct “delinquent or last missed payment” date (month and year) that preceded the creditor’s action.
Prior to 1996, any account activity extended the reporting period so creditors and collectors took advantage of this loophole to keep negative items on a consumer’s report for many years. In order to eliminate this loophole, Congress amended the FCRA in 96 and firmly established a date from which the 7 1/2 year period begins as the month/year of delinquency (last missed payment). Therefore, whether the 71/2 -year period has expired or not, the running of the reporting period cannot be adjusted just because one of the following events or actions occur:
Creditor sells or transfers the debt;
You respond to a post-charge off collection effort by making a payment or signing a payment agreement;
You dispute the account or item with a credit reporting agency (CRA).
My bankruptcy was approved and my debts were discharged, but an old credit card debt is still showing up on my credit report, what can I do?
Though many of these debts should no longer show in your credit report, improperly stated debts that have been discharged may still appear on your credit report. These debts are likely to hold down your credit score but may usually be removed after informing the credit agencies that the debts have been discharged. Verification from the bankruptcy schedule which lists the discharged debts may be required.
WILL I BE ABLE TO GET CREDIT AFTER FILING FOR BANKRUPTCY?
Yes. Lenders consider many factors when determining your ability to borrow money. Filing bankruptcy will appear on your credit report, but will also decrease your debt-to-income ratio. Many lenders are able to satisfy a loan immediately after a person’s discharge of debts. Unsecured credit cards may also be obtained after being discharged of debt.
I AM A CO-SIGNOR ON A LOAN THAT WAS DISCHARGED. CAN A CREDITOR COME AFTER ME NOW?
Yes. A bankruptcy which discharges a debt only discharges the debt for the individual who has filed for bankruptcy. Co-signer may still be liable for the discharged debt. For example, you and your spouse are co-signers on a credit card and one spouse files for bankruptcy. The credit card debt is discharged under the bankruptcy for one spouse. The credit card company may hold the other spouse who has not filed for bankruptcy responsible for the remaining debt on the credit card.
IF I FILE FOR A BANKRUPTCY, WILL IT HURT MY SPOUSE’S CREDIT RATING?
In general, if you file for bankruptcy and spouse does not (spouses are not required to file); your bankruptcy will not show up on your spouse’s credit report. However, your spouse may be responsible for a discharged debt that your spouse was only partly responsible for before the bankruptcy filing.
IF I FILE FOR BANKRUPTCY, WILL MY SPOUSE NEED TO FILE ALSO?
No. In cases where both spouses have a lot of debt, a joint petition for a bankruptcy may be filed. Only married individuals may file a joint petition. A joint petition is a single petition on behalf of each spouse.
WHAT CAN I DO IF A CREDITOR KEEPS TRYING TO COLLECT MONEY AFTER I HAVE FILED FOR BANKRUPTCY?
If a creditor continues to attempt to collect a debt after the bankruptcy is filed in violation of the automatic stay, you should immediately notify the creditor in writing that you have filed bankruptcy. In addition, you should provide them with the case name, number and filing date, or a copy of the petition that shows it was filed. If the creditor still continues to try to collect, the debtor may be entitled to take legal action against the creditor to obtain a specific order from the court prohibiting the creditor from taking further collection action. Further, if the creditor is willfully violating the automatic stay, the court can hold the creditor in contempt of court and punish the creditor by fine or incarceration. Any legal action brought against the creditor will be complex and will normally require representation by a qualified bankruptcy attorney.
I AM INVOLVED IN A SHORT SALE SITUATION WITH MY HOUSE AND THE LENDER WANTS ME TO SIGN A PROMISSORY NOTE FOR THE DIFFERENCE WILL I BE ABLE TO DISCHARGE THIS NOTE IN BANKRUPTCY?
This is a common tactic by lenders in a short sale situation. However, if you sign the note then try to file for bankruptcy shortly thereafter, you may have a difficult time convincing the bankruptcy court to discharge the debt.
DO I NEED AN ATTORNEY TO FILE BANKRUPTCY?
Federal law does not require you to have an attorney. You are allowed to file pro se, that is, on your own without an attorney. However, without the assistance of an attorney, it is extremely difficult to do so successfully. Hiring a competent attorney is highly recommended.
CAN AN EMPLOYER DISCRIMINATE AGAINST ME FOR FILING BANKRUPTCY?
Generally, government and private employers may not discriminate against you for filing bankruptcy. Federal law prohibits private employers from discriminating with respect to employment if the descrimination is solely based on the bankruptcy filing.
IS THERE A LIMIT ON THE NUMBER OF TIMES THAT I CAN FILE FOR BANKRUPTCY?
The time periods between bankruptcies depends on the type of the previous filing and the type of new filing. If your new filing is a Chapter 7, you must wait eight (8) years from last filing of a Chapter 7, or six (6) years from last filing of Chapter 13. If your new filing is a Chapter 13, you must wait four (4) years from last filing of Chapter 7 or two (2) years after a discharge of a previous Chapter 13 case.
HOW CAN I AFFORD TO FILE FOR BANKRUPTCY WHEN I CAN”T AFFORD TO PAY MY BILLS?
We have affordable payment plans. Let us help you get out of this dark hole and obtain a fresh start, debt free.
CAN YOU KEEP THE CREDITORS FROM CALLING MY HOME AND MY WORK?
As soon as we are retained as your attorney, we take over. Protecting you from creditors is one of our jobs.
HOW CAN I STOP MY PAYCHECK FROM BEING GARNISHED?
As soon as we file your case, the garnishment stops. In some cases, we may be able to get a portion of garnished wages returned back to you.
CAN ANY ATTORNEY HELP ME FILE A BANKRUPTCY?
No. Bankruptcy law has become extremely complicated. You need an experienced attorney that is knowledgeable of current bankruptcy law. Our firm is leader in this area of law.
HOW MANY BANKRUPTCY CONSULTATIONS HAVE YOU PERSONALLY PERFORMED?
I have personally performed over 18,000 bankruptcy consults over the years.
WHAT IS FORECLOSURE?
FORECLOSURE is a legal action taken by your mortgage company and usually occurs when you get behind on your payment involving land. The lender can take legal action to get property out of your name and back into the lender’s name, whereby removing you from the property. This legal process is defined as foreclosure. There are typically two ways to STOP this process:
Full Payment: If you are able to obtain and tender the full amount of your arrearage, including fees and costs, you can stop the foreclosure of a standard residential mortgage.
Since most people do not have the money available to take this action, their best and only remaining option is to file a Chapter 13:
This process stops the foreclosure and allows you to repay your arrearage over a three-to-five year period. The arrearage is paid through a court-appointed official, while you resume your regular monthly payments to the bank in order to keep your home. A Chapter 13 can be filed at any time prior to the property being sold. Once the property is sold, the lender can then pursue you for the amount that your property failed to bring at the courthouse steps vs. the amount still owed.
WHAT IS GARNISHMENT?
Your creditor once he gets a judgment can garnish up to 25% of your wages directly from your check. Further, ALL your checking/savings account monies can be totally emptied, usually causing checks on your account to be overdrawn (bounce), which carries criminal charges!!
CAN A CREDITOR BLOCK/OBJECT TO A DEBT BEING DISCHARGED?
Yes, a creditor may object to the discharge of a debt in Chapter 7 bankruptcies. The creditor has the burden to prove that the debt should not be discharged by usually showing fraudulent acts or other reasons by law. In a similar fashion, creditor may request copies of your bankruptcy petition and your personal records.
CAN I LOSE MY HOUSE, CAR AND OTHER PERSONAL PROPERTY?
In most cases if you are current on the debts that are tied to these types of property your property will not be affected. If you are behind on your payments you can keep your property by filing a Chapter 13 which allows you to repay your delinquent amount due.
WHAT IS THE FAIR DEBT COLLECTION PRACTICES ACT?
Prohibits abusive practices by debt collectors as amended by Public Law 104-208, 110 Stat. 3009
Here are a few sections of the act most significant in this area. Section 805. Communication in connection with debt collection [15 USC 1692c]
COMMUNICATION WITH THE CONSUMER GENERALLY. Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt —
at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that the convenient time for communicating with a consumer is after 8 o’clock antemeridian and before 9 o’clock postmeridian, local time at the consumer’s location; if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney’s name and address, unless the attorney fails to respond within a reasonable period of time to a communication from the debt collector or unless the attorney consents to direct communication with the consumer; or at the consumer’s place of employment if the debt collector knows or has reason to know that the consumer’s employer prohibits the consumer from receiving such communication.
COMMUNICATION WITH THIRD PARTIES. Except as provided in section 804, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a post judgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than a consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.
CEASING COMMUNICATION. If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except — to advise the consumer that the debt collector’s further efforts are being terminated; to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy. If such notice from the consumer is made by mail, notification shall be complete upon receipt.
For the purpose of this section, the term “consumer” includes the consumer’s spouse, parent (if the consumer is a minor), guardian, executor, or administrator.
Section 807. False or misleading representations [15 USC 1962e] A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
The false representation or implication that the debt collector is vouched for, bonded by, or affiliated with the United States or any State, including the use of any badge, uniform, or facsimile thereof. The false representation of — the character, amount, or legal status of any debt; or any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt. The false representation or implication that any individual is an attorney or that any communication is from an attorney. The representation or implication that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action. The threat to take any action that cannot legally be taken or that is not intended to be taken. The false representation or implication that a sale, referral, or other transfer of any interest in a debt shall cause the consumer to — lose any claim or defense to payment of the debt; or become subject to any practice prohibited by this title. The false representation or implication that the consumer committed any crime or other conduct in order to disgrace the consumer. Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed. The use or distribution of any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by any court, official, or agency of the United States or any State, or which creates a false impression as to its source, authorization, or approval. The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer. The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector, except that this paragraph shall not apply to a formal pleading made in connection with a legal action. The false representation or implication that accounts have been turned over to innocent purchasers for value. The false representation or implication that documents are legal process. The use of any business, company, or organization name other than the true name of the debt collector’s business, company, or organization. The false representation or implication that documents are not legal process forms or do not require action by the consumer. The false representation or implication that a debt collector operates or is employed by a consumer reporting agency as defined by section 603(f) of this Act.
HOW DO I KNOW IF I CAN FILE FOR UNCONTESTED DIVORCE?
If you and your spouse are on speaking terms with no restraining orders, I can usually file for Uncontested Divorce and save you thousands of dollars. Keep in mind you must agree in all areas, including visitation schedules, child support, child custody, division of any existing debts, spousal support, and decisions regarding marital property.
IF I AM FILING FOR AN UNCONTESTED DIVORCE, SHOULD I GO TO AN EXPERIENCED ATTORNEY?
Yes! With any life changing decision, you need an experienced attorney who understands the law. I have helped hundreds of couples go through one of the most stressful events in their lives.
WIll I HAVE TO GO TO COURT WHEN I FILE?
Because of my extensive experience in handling this type of divorce, in most cases my clients do not have to make any court appearances during the entire process and usually the process time is shortened as well.
HOW CAN I AFFORD TO FILE FOR DIVORCE WHEN I’M STRUGGLING WITH FINANCES NOW?
W. Ron Adams Law has affordable payment plans to fit your needs.
SOCIAL SECURITY / DISABILITY
WHERE DO SOCIAL SECURITY BENEFITS COME FROM?
As you have worked through the years, Social Security taxes have been taken out of your paycheck.
WHERE DO I GET MONEY TO HIRE AN ATTORNEY TO HANDLE MY CASE?
When you win, I get paid 25%. This percentage has been defined by the Social Security system. If you don’t win, we don’t get paid.
ARE YOU A SOCIAL SECURITY ATTORNEY?
Yes, I have been representing clients with Social Security cases for close to 30 years. My office has nearly 90 years combined legal experience. You can rest assured that we will fight to get the benefits that are due to you.
HOW DO I KNOW IF I’M ELIGIBLE AND WHERE DO I START?
Call us and we will tell you the next step. We are here for you.