Bankruptcy
What is Bankruptcy?
Step-by-Step Process
Step 1: Schedule Your Free Consultation
Duncan Law Firm will talk you through the documents that are needed for your consultation.
You will complete a brief form that will assist in determining the best course of action for your unique situation.
Mr. Duncan will discuss your case and outline a plan and process.
This will all be done at no cost to you.
Step 2: Begin Working With Duncan Law Firm
Retain Duncan Law Firm to guide you through the Bankruptcy process, allowing a knowledgeable and caring team to lead the way.
Duncan Law Firm has been involved in thousands of successful cases and will work to make the process as easy as possible for you.
Step 3: Patiently Wait
Once all of the paperwork has been successfully submitted, and a Trustee of the court has reviewed your case in a simple hearing, there will be a mandatory 60-day waiting period to give creditors the opportunity to object.
Creditors must have good cause to object and it is rare for an objection to occur in most cases.
Step 4: Relief From Your Debt
Once the waiting period has ended either without objection or with an objection successfully resolved, you will receive a notice from the Court and a letter from Duncan Law Firm with your Discharge, marking the successful completion of the process.
This is the final order from the court that you have been working towards!
Do’s and Don’ts of Bankruptcy
- DON’T pull money out of your retirement account to pay off unsecured debt
- DO look at other options such as bankruptcy, debt consolidation or debt negotiation first.
- DON’T sell or transfer property (land, vehicles, jewelry, guns) if you are thinking about filing; If you do absolutely need to sell an item of property for reasonable or necessary expenses
- DO make sure that you are receiving FAIR MARKET VALUE and preferably to someone outside your immediately family or friend group.
- DON’T use your tax refund to purchase luxury goods or expensive vacations.
- DO use your tax refund to catch up past-due utilities or secured debt, buy your children needed clothing or other necessities, make vehicle repairs or any other reasonable and necessary expenses.
- DON’T wait until the creditors have starting suing you – this can lead to judgment liens being filed or your wages being garnished;
- DO talk to an experienced bankruptcy attorney as soon as you realize that you can no longer pay your bills.
- DON’T continue to use credit after you have decided that you may need to file bankruptcy since debts incurred in the 90 days prior to filing may not be discharged;
- DO discuss any recent credit purchases with your attorney so that there are no surprises.
- DON’T hide things from your attorney. One of the worse things you can do is to not be forthcoming in a bankruptcy proceeding. If your attorney does not know about it, he cannot prepare or guide you in the right direction;
- DO disclose all assets, debts or potential asset that may be coming your way.
Definitions
Chapter 7 bankruptcy is a “liquidation” or “clearing out” of debt.
Chapter 13 bankruptcy is a “reorganization” plan where debts are consolidated and a monthly payment is made to a Trustee for 36 to 60 months (3 to 5 years). The Trustee distributes this payment to the creditors in accordance with the payment plan.
Unsecured debt does not have collateral. The most common examples include medical bills, credit cards, signature loans, payday loans, delinquent rent or deficiency balances on repossessed vehicles.
Secured debt is backed by collateral. The most common examples are an auto loan or title loan on a vehicle, a mortgage loan on your home or a purchase money security loan on a storage building or furniture.
Priority debts are typically non-dischargeable debts (often backed by the federal government). The primary examples of this are:
Past-due child support or alimony
Unpaid Taxes
Student Loans
Personal Injury claims that result from an at-fault accident that involved being under the influence
Debt that is a result of fraud
Unsecured debt that was incurred within 90 days of filing bankruptcy
FAQ
No, there are protections in place to keep those that file bankruptcy from becoming destitute. Those protections vary from state to state due to income level, household size and value of assets.
Yes, with the exception of priority debts which are detailed below.
Yes, though the bankruptcy will lift your legal obligation to repay a secured debt, the lender still has the right to take the collateral if the payments are not made. In short, if you want to keep your house or vehicle, you need to continue to make all payments.
Yes, but this does not mean you will lose assets that have a debt tied to them. Many lenders prefer you keep your house, car or other collateral and continue making payments.
No, not necessarily. Though it is common for a couple to file together, it is not required and in some cases only one person needs to file.
No, not usually. Bankruptcy is a public legal proceeding. That said, unless you are a prominent person or celebrity, chances are unlikely that anyone other than your creditors or people you choose to tell will be aware of it.
Yes, a debtor can file several times in the course of their lives. There are limitations of course.
At least 8 years must pass between Chapter 7 filings. If a debtor filed a Chapter 7, at least 4 years must pass before they can file a Chapter 13 and receive discharge. Chapter 13 repeat filers must wait at least 2 years from the first discharge to file the next Chapter 13 and receive a discharge.
No, sometimes it improves very rapidly. Each case is different, but eliminating debt typically improves your debt-to-income ratio. Many people are able to purchase vehicles with a loan within months of discharge and even a home within 2-3 years.