Portland Bankruptcy
The decision to file bankruptcy takes serious consideration. Everywhere you look, there seems to be endless options and confusing answers. It is important to work with someone you trust and has your best interest in mind. When you hire us, you are hiring zealous advocates and advisors. We will work with you to figure out the best solution to your current financial situation.
Bankruptcy may or may not be the best choice for you, but you can sit down with us in a free consultation to find out. We look at each client’s individual needs and come up with a plan to meet those needs. When you make an appointment, we will ask you to fill out a questionnaire that you can then bring with you at your initial free consultation. It will help us look at your specific case with more certainty and help you know your best options. Click here for the worksheet. You can simply print it off and bring it with you.
If you do decide to declare Bankruptcy, it is important to figure out what type to file. We specialize in Chapter 7 and Chapter 13 bankruptcies. They are very different, so finding an attorney to help you determine which is for you is vital. There is so much information out there, good and bad, when it comes to bankruptcy. Here are some of the most commonly asked questions we hear:
Common Bankruptcy Questions:
What is Chapter 7 Bankruptcy?
When you file a Chapter 7 bankruptcy, you will be able to discharge most of your debt completely. It is the most common form of bankruptcy and can give you the fresh start you need. It can be completed in about 90 days in most cases and is more affordable than other types of bankruptcy. Generally you will be able to eliminate both unsecured debt (such as credit cards) and secured debt (such as car loans and home loans). However, not all debt is eligible to be discharged. For example, child or spousal support, most student loans, taxes, criminal restitution, governmental fines, debt based on fraud and any debts not listed in the bankruptcy. Losing your home, personal belongings or car is not absolute, so it is important that you speak with an attorney to determine the right steps to take along the way. In order to file a Chapter 7 bankruptcy, the law requires you to pass a means test. That test will determine if you meet the income requirements to file. If you do not pass, then it may be more appropriate for you to file a Chapter 13 bankruptcy. Through it all, it is important to know that you are not alone. We talk to people everyday who are facing bankruptcy and are aware of the variety of challenges that exist. Don’t go it alone, let us lead the way.
What is Chapter 13 Bankruptcy?
A Chapter 13 bankruptcy is not for everyone. It does not “look” like a normal bankruptcy, in that all of your debts are not eliminated. Chapter 13 is more suitable for clients who have sufficient income to pay back some of their debt, but have found themselves in a financial quagmire. In Chapter 13 your debt will be re-organized and creditors forced to comply with new terms the court deems reasonable. Chapter 13 lasts from 3-5 years depending on your disposable income. After that time your remaining debt will be completely discharged. In a Chapter 13 bankruptcy you are allowed to keep your non-exempt property, which you may have been forced to liquidate in a Chapter 7. There are other requirements in a Chapter 13 bankruptcy, which is all the more reason it is important you have someone on your side, leading the way. Don’t go it alone.
Can I file a bankruptcy if I have filed one already in the past?
In a Chapter 7 bankruptcy, you may only file if you have not filed another Chapter 7 in the previous 8 years. When it comes to Chapter 13 or other types of bankruptcies, the rules are more complex, so it would be wise to seek the advice of an experienced attorney.
What will happen to my credit? Will I ever be able to have a good credit score?
Most people who decide to declare bankruptcy have been struggling with debts that have already affected your credit score. A bankruptcy does stay on your credit report for a number of years, but there are many things you can do in the mean time to raise it. Things like getting a credit card, charging a small amount on it each month, then paying it off on time- every time will positively effect your credit. It may take time, but there are a lot of ways to get back to where you want to be. Call our office anytime if you have further questions about how to raise your score.
How long will the bankruptcy stay on my credit report?
Chapter 7 filings will stay on your record for 10 years, while Chapter 13 will be there for 7 years after the bankruptcy is final. Even though it stays on your credit report, there are many things you can do in the mean time to raise your credit score. Things like getting a credit card, charging a small amount on it each month, then paying it off on time- every time will positively effect your credit. It may take time, but there are a lot of ways to get back on the right track. Call our office anytime if you have further questions about how to raise your score.
Will I be able to get credit after I declare bankruptcy?
Yes. You will still receive credit applications in the mail and may still apply. Generally you will not be offered much credit and it may have higher interest rates, but if you pay it off each month, then you will get back on track. You just have to remember, in order to start raising your credit score you will need to pay your bills on time. Your credit card company will generally tell the credit score rating companies this and your score will start rising little by little. Credit card companies know that you cannot declare bankruptcy again for at least 8 years, so they may feel more secure than when someone has really bad credit and has not filed bankruptcy. They also know that millions of Americans have had to file bankruptcy in the last decade and especially in this most recent recession. Filing bankruptcy does not carry the same stigma it used to, so if you are cautious and relentless about responsible spending, you will be able to have a great credit score again.
Will I have to give up all of my possessions?
No. Most people who declare bankruptcy do not have to give up anything. The law protects against personal and work-related possessions. The best way to know for sure is to talk to an attorney who knows the in’s and out’s of bankruptcy law.
Will I lose my house when I declare bankruptcy?
That is up to you. There are ways you can keep your home, but also ways to get out from underneath a high-interest mortgage. When you file bankruptcy, it automatically stops any foreclosure proceedings. That can give you extra time to decide the next steps you want to take.
Will I lose my car if I declare bankruptcy?
Again, that is up to you. A car is a type of loan you can either keep paying through your bankruptcy or give up if you do not want to or cannot keep paying the loan off.
What if my income is high, but I am too far in debt to keep afloat?
If you have steady income above a certain level, but your financial ship is still sinking, then filing a Chapter 13 may be your best option. All your debts are not completely wiped clean, but, rather, you set up a payment plan with the courts for a period of 3-5 years. At the end of that period, any unpaid debts will be discharged. It is a more complicated process than a Chapter 7 filing and will take more time, so it is important to hire an attorney who can walk you through the process. You definitely want to make sure the details are done correctly on a Chapter 13.
How long will the bankruptcy process take?
The timeline is different depending on what type of bankruptcy you file. In a Chapter 7 bankruptcy, it could take 3-4 months. For Chapter 13, it is generally 3-5 years. The timeline begins when the attorney files the petition. No matter what type of bankruptcy you file, the timeline cannot begin until you have all of the required information ready for your attorney. We will work with you to obtain all required documents and we pride ourselves on being able to sift through your credit report and paperwork to determine your assets, liabilities, income and expenses. Our job is to make sure the process will go smoothly. Once the bankruptcy has been filed, the court will determine the deadlines and give a timeline for the case.
What is the Median Income Test or Means Test?
The Median Income Test determines whether your income is below the median income level for your household size in your state. If you fail that test, then you need to take the Means Test to determine if you have the ability to pay your creditors back in a meaningful way. If you are still determined to have too much income for a Chapter 7 filing, then you may want to look at filing a Chapter 13 bankruptcy. All the more reason it is important to have an attorney walk you through the process.
What if I forget a debt? Can I add it later?
Yes. When you are sifting through all your paperwork, it can be difficult to calculate the exact amounts you owe. That is why it is important to have an attorney to guide you. We are thorough in all we do. If a bill slips through the cracks, though, we can amend the documents we have filed properly. We want to make sure when you finish the bankruptcy you are walking away with a clean slate.
Will I have to go through credit counseling?
Yes, you are required to take two courses; one class before you file and one after. We work with a fantastic agency and will walk you through the process to make sure everything is done correctly and quickly.
What is a Trustee?
The Trustee is the representative of the bankruptcy estate. He or she examines your case in order to locate and take control of any non-exempt assets, if there are any, and to ensure the filing is in compliance with the law. The Trustee is the one who decides what steps are necessary to reduce those assets to cash for the distribution to the creditors. Most of the time, there is not enough money to pay all the creditors in full, so the trustee disburses the funds according to the guidelines set under federal statute. Trustees are under the supervision of the office of the U.S. Trustee. In Chapter 13 bankruptcies the Trustee is more involved. They manage the payments from the debtor to the creditors and are there for the duration of the bankruptcy.
What is an Automatic Stay?
An automatic stay is what will happen immediately when you file your bankruptcy. It basically means the actions the creditors will or have already taken stops. It hits the pause button on all collection activities. Creditors are forced to leave you alone while the bankruptcy is in progress. There are some exceptions to this rule, but for the most part all of your financial trouble pauses and will get resolved while in bankruptcy.
Can I use my credit card or incur more un-secured debt before I declare bankruptcy?
No. When you charge a single transaction of $500 or more for luxury goods or services anytime within the 90-day period before filing for bankruptcy, you run the risk of being seen as committing bankruptcy fraud. If you get a cash advance of $750 or more from a single creditor within 70 days before filing, it can also been seen as fraudulent behavior and may not be dischargeable in bankruptcy. It is part of the Trustee’s job to investigate your financial records to ensure everything is being done honestly. It is best to be as cautious as possible in order to have no allegations of any wrongdoing. Each case is different- all the more reason it is important to make sure you have a trustworthy advisor on your side.
What if I owe my family or friends money? Can I pay them off before filing for bankruptcy?
When you make substantial payments to friends or family within 90 days of filing bankruptcy it may be considered a “preference.” This occurs when you pay one particular creditor more than another. If that amount is substantially larger than you have paid any of your other creditors, the Bankruptcy Court has the power to have the creditor you showed preference to pay back a portion of the money to other creditors. This is a tricky part of bankruptcy law, so it is best to seek legal advice from a bankruptcy attorney to sort out your particular situation.
What debts are generally not dischargeable? What debt does not go away?
Here are some of the most common types of debts that are not discharged in Chapter 7 bankruptcies (in Chapter 13 a few more debts are allowed):
- 1. Most taxes
- 2. Alimony, maintenance, support and some debts arising out of a divorce decree (DSO- domestic support obligations).
- 3. Student loans.
- 4. Fines, penalties, forfeitures, or other types of criminal restitution obligations.
- 5. Personal injury debts that are caused by driving under the influence of intoxicants (DUII).
- 6. Debts that are not properly listed by the debtor.
- 7. Debts that could have been listed when filing another bankruptcy in the past.
- 8. Post bankruptcy condominium or cooperative owner’s association fees.
- 9. Debts incurred through false pretenses, false representation or actual fraud. Note- There are some other non-dischargeable items not listed above. Some of the items listed above have exceptions. That is all the more reason why it is important to have someone on your side guiding you through the process.
Will I be discriminated against after I file bankruptcy?
You are protected by federal bankruptcy law when you file bankruptcy. That law says neither a governmental entity nor a private employer may discriminate against or terminate you at your job because you filed bankruptcy. You cannot be denied governmental benefits, permits, licenses or any other similar benefits after you file bankruptcy. Also, you will still be able to get guaranteed student loans. Utility companies may not alter, refuse or discontinue service or discriminate against you based on your bankruptcy. They may require extra reasonable deposits though to ensure payments.
