Frequently asked questions about Chapter 7 and Chapter 13 bankruptcy in Louisiana
I Am Getting Conflicting Information On The Internet About Bankruptcy, What Should I Do?
Call our office for a free initial consultation, and do not believe the myths on the Internet.
What Happens At My Free Initial Bankruptcy Consultation?
At your free initial consultation, we will consult with you and inform you of your options regarding your specific situation.
Do I Have To Make A Decision At The Free Initial Consultation?
No. This bankruptcy consultation is for your benefit and does not obligate you in any manner until you hire us. Many clients wish to take the information home and discuss it with a family member or spouse before they decide their course of action to be pursued.
How Do I Pay You To File Bankruptcy For Me If I Am Broke?
Since we have practiced in this area for many years, our office understands the difficulties in paying attorney’s fees. The attorney’s fees in bankruptcy are usually low in comparison to other types of legal fees. You will not be required to come up with a large sum of money all at once unless that is your desire and in your best interests. In addition, since you will no longer have to pay many of your debts, most people are able to pay us in a short period of time.
What SHOULD I Do Before I File Bankruptcy?
1. Speak To A Bankruptcy Attorney At Sam Henry’s Office About Your Options As Soon As Possible.
2. Take your situation seriously – Ignoring your financial trouble will not make it go away.
3. Explain the result of taking or not taking action in a case.
4. Be honest about all your debts and assets – To best serve you, our attorneys need all of your financial information, even if it is embarrassing to you. We can, in all likelihood, provide a feasible solution to handle your debt issues. Keeping us informed will create the best results.
What Should I NOT Do Before I File Bankruptcy?
1. Withdraw money from your retirement account ? Generally, this account is exempt in bankruptcy, absent fraud. Further, early withdrawal makes you liable for taxes and penalties that are not dischargeable in bankruptcy.
2. Make excessive purchases on or take out large cash advances from your credit cards before filing. If the court sees exorbitant purchases or cash advances six months to one year prior to filing, it may consider your petition fraudulent and dismiss your claim.
3. Transfer property out of your name. Hiding assets is risky and illegal. Our bankruptcy attorneys can advise you regarding about legal ways to protect your property.
4. Take cash advances from one credit card to make payments on another. Once you start juggling credit cards, you are in trouble. Speak with our firm immediately.
5. Repay friends or relatives before filing. You cannot treat friends and family preferentially over your creditors.
Should I Consider Using A Debt Consolidation/Credit Repair?
Debt Consolidation Companies.
Most debt consolidation companies are SCAMS, ruin your credit and ultimately FAIL. There is very minimal regulation on these companies and there are new debt consolidation companies “popping up” seemingly overnight. Many are being sued by governmental agencies or their former clients for fraud. Most of the time, the debt settlement companies will keep most of the money for themselves, leaving little for the actual settlement. Normally, we see that by the time our clients figure out that the company is not doing what was promised, several thousand dollars are lost to these debt consolidation companies and they are in worse financial condition than ever. There is nothing special about the relationships between debt settlement companies and credit cards/debt collectors that guarantee settlements. In many cases, debt consolidation services have no leverage and no means of providing lenders with incentives to agree to a debt consolidation. Even assuming they do settle, what the creditors and debt settlement companies don’t tell you is this: the amount forgiven will be considered income to you and you may be taxed on the amount forgiven.
Credit Repair Companies.
The promises of Credit Repair Companies to “fix” your bad credit rating or to erase your bad credit usually are nothing more than ways to take your money. Business is brisk among these so-called “credit-repair” companies that charge $50 to more than $1,000 to fix your credit report. In many cases, these companies take your money, do little or nothing to improve your credit report and then vanish.
There are no quick or easy fixes for a poor credit history. If a company promises to clean up your credit report, remember:
1. Your credit history is maintained by private companies called credit bureaus that collect information reported to them by banks, mortgage companies, department stores and other creditors.
2. Although bankruptcy can help, only time and a history of timely debt payments will heal a poor credit history – even if your problems were due to illness or unemployment.
On the other hand, bankruptcy proceedings are backed by the power of the federal bankruptcy code. When you file for bankruptcy, you do not have to get your creditors to agree. Your rights are enforced by the bankruptcy court. Bankruptcy is much more certain and there is no “scam” involved.
If I Have Filed A Bankruptcy Before, Can I File Again?
If I File Bankruptcy, When Will The Telephone Calls Stop?
Immediately after the filing of the bankruptcy, the bankruptcy clerk notifies all of the creditors that you have listed. Upon the receipt of that notice, those creditors are bound by the Bankruptcy Code to cease all communication with you. They cannot sue you, call you, foreclose on your house, repossess any items from you, garnish any wages or take any other legal action.
Will I Lose All Of My Assets In Bankruptcy?
Both the Bankruptcy Code and the Louisiana Property Code have exemption statutes that are designed to help people protect their home, their car, their furniture, furnishing, clothing and personal effects.
Can Bankruptcy Stop Foreclosures, Wage Assignments, Help Me Get My License Back, Stop Evictions, A Judgment, Or Remove A Lien?
My House Is Set For Foreclosure. How Long Can I Wait To Decide To File Bankruptcy?
Do not wait. Since there is absolutely no charge for your first consultation with us, it is pointless to wait. Come see us immediately so that we can explain your alternatives and you can choose the option that is best for you. If you wait too long, it may be too late to stop the foreclosure and you may lose your house.
If They Have Already Repossessed My Vehicle, Is It Too Late To Save It?
No. One of the great advantages of a Chapter 13 bankruptcy is that if you act immediately after your vehicle is repossessed, the Bankruptcy Code will require the creditor to return the vehicle to you. In a Chapter 13 bankruptcy, you can then make arrangements to keep the vehicle and pay for it, (sometimes at a discounted amount) under the bankruptcy plan. However, if you wait and the vehicle is sold by the creditor after they have repossessed the vehicle, then it will then be too late to regain possession of your vehicle.
Will A Bankruptcy Filing Stop A Foreclosure? Can My House Still Be Taken From Me?
When you file your bankruptcy your creditors are stayed from taking action against you, including foreclosure. However, in a Chapter 7 bankruptcy, if you do not bring your mortgage current the lender could request from the bankruptcy court a “relief from the stay” which would allow them to foreclose. In a Chapter 13 you can put the arrearages you owe in your Chapter 13 plan, but would have to make regular monthly payments each month going forward from the filing date of your Chapter 13 plus make payment toward the arrearage. In today’s market, a Chapter 13 bankruptcy may help you save your homestead by offering a structured loan modification process, and may afford you the opportunity to discharge second mortgages, home equity lines, and other liens secured to your home.
Will I Lose My Cars In Bankruptcy?
Like your home, the bankruptcy process is designed to help you keep the vehicles necessary for your family. Again, either Chapter 7 or Chapter 13 can provide the necessary protection so that you can retain the cars required to maintain your family needs.
Can You Reduce My Monthly Payments On My Car?
Normally, yes, in a Chapter 13.
Will Filing Bankruptcy Stop My Wages From Being Garnished?
Yes, once you file bankruptcy, you are under protection of the Bankruptcy Court from most creditors. We will immediately notify the garnishing creditor that you have filed a bankruptcy petition.
What Is The Means Test?
The means test is used in cases where the Chapter 7 individual debtor’s(s’) current monthly income exceeds the state’s median family income. It is used to determine if a debtor has the ability to repay a minimum level of general unsecured debt after the payment of allowable monthly expenses. If the means test shows a debtor has such an ability to repay, there is a “presumption of abuse.” In other words, if the debtor(s) receive(s) a Chapter 7 discharge, this would be an abuse of the bankruptcy process, because the debtor(s) may have the ability to repay debts outside of bankruptcy or through a Chapter 13 repayment plan over time. The analysis involves application of certain IRS guidelines for expenses in determining the ability to repay as well as a review of income from the previous six months to determine if the debtor(s) is/are above the median income for the state where they reside.
How Does A Bankruptcy Filing Affect My Credit?
Bankruptcy has an initial adverse effect on your credit score. However, the type of bankruptcy, whether Chapter 7 or 13, will affect an individual’s credit differently. As a general response, if you are in need of a bankruptcy, the initial affect to your credit score should not necessarily guide you in your decision on whether or not to file, particularly if your credit score is already poor. Oftentimes, those in need of a fresh start who choose not to file for bankruptcy will have a harder time rehabilitating their credit in the future. However, those who opt for bankruptcy, are ultimately afforded the opportunity in the future to obtain credit cards, purchase vehicles, and qualify for mortgage loans. While these things may not happen overnight, you may be surprised as to the actual positive effect your bankruptcy will have on your life.
What Is The Financial Management Course?
The “instructional course in personal financial management” in chapters 7 and 13 is the course that an individual debtor must complete (after the filing of the bankruptcy case) before a discharge is entered. There are exceptions to the requirements for certain categories of debtors, exigent circumstances, or if the U.S. trustee or bankruptcy administrator have determined that there are insufficient approved credit counseling agencies available to provide the necessary counseling.
Will Bankruptcy Affect My Spouse's Credit? Is He/She Responsible For My Credit Cards If He/She Is An Authorized User?
No, filing will not affect your spouse’s individual credit, but if he or she is a co-signer on any debt that is not paid that will affect him or her. The fact that you filed bankruptcy does not appear on a spouse’s credit report unless he or she also files bankruptcy. Unless your spouse has signed to be legally responsible, they are not responsible. However, many credit card companies will argue that she is responsible. They may even put a “no pay” on her credit report if the amount is unpaid; however, she may ask any credit reporting service to correct that. If she does so, the credit card company will have to show that she signed for it. If they can’t, it will be removed from her credit report file. In other words, the credit card collectors may try to collect from her by claiming she is liable, but she really is not. If they damage her credit record, it may be grounds for a lawsuit. Credit is normally granted based on a score from your past payment history, the amount of debt that you owe, the length of time you have been repaying present credit, if you have opened credit recently, and the types of credit accounts you have.
How's An Inheritance Treated In A Bankruptcy Case?
How an inheritance is treated in bankruptcy depends on when you become entitled to receive it and what type of bankruptcy relief you’re seeking.
After I File My Bankruptcy Can I Change From Chapter 7 to 13 Or Vice Versa?
Yes, depending on the facts of your case, you can file a “motion to convert” where appropriate. For example, if it is determined, after filing a Chapter 7, that you make too much money per Chapter 7 requirements, you may have to convert your case to one under Chapter 13.
Does My Spouse Have To File If I File?
No. Married individuals can choose to file a joint petition, but one spouse can file alone. However, information about assets and wages of the non-filing spouse must appear in your statements and schedules, to give a complete picture of your financial situation. If one spouse files and the other doesn’t, the one who doesn’t file could be responsible for paying the debts.
Should I File Bankruptcy During Divorce?
Filing for bankruptcy during your divorce can slow down the divorce process. Divorce courts can make rulings on custody, visitation, child support, and alimony when a bankruptcy is in progress. However, a divorce court cannot make final decisions about your property as long as the bankruptcy court has control over it.