Not all bankruptcy attorneys are created equal. That is not shocking. The same could be said about finding help in any profession or job that requires expertise and training. That said, finding the right bankruptcy attorney for you is not something that should prove difficult for most of us. But there are some things I would encourage you to both look, and look out for, when you go about consulting with attorneys and their staff.
Having worked with people to resolve problem debt by choosing bankruptcy alternatives for more than 20 years, I have referred more people to attorneys than to my main debt relief niche of debt settlement. That is not just because you should look at the pros and cons of bankruptcy as part of any due diligence into how to solve your debt problem, but because debt settlement cannot compete with chapter 7 bankruptcy for speed and overall cost when resolving problem debts for most people.
My focus in this post will be tips for how to interview your bankruptcy attorney with a chapter 7 focus, though chapter 13 bankruptcy filers can apply all of this too.
Chapter 7 Attorney Fees are Not All that Important
Depending on the reason you need to hire an attorney, your fees can be all over the place. That is not the case with the amount of fees chapter 7 attorneys will charge. Their fees tend to be within a few hundred dollars of each other, and are often more related to where you live (coastal cities tend to have higher chapter 7 attorney fees than what those of us living inland often see).
Two reasons why attorney fees when filing chapter 7 bankruptcy stay fairly consistent:
- If your chapter 7 filing does not involve many assets your case is going to be pretty straight forward. There will not be any notable amount of “lawyering” that will be necessary.
- Bankruptcy judges and trustees would be alerted to uncommon, or inflated chapter 7 fees. And because court fees and costs are going to be uniform, there is not much to elevate your average chapter 7 filing to total costs from A to Z anywhere over two thousand dollars. In other words, the court system keeps bankruptcy lawyers from fee gauging people filing no asset and uncomplicated chapter 7’s.
There are some exceptions that could require an attorney to incur more than the average amount of hours, such as attempting to discharge student loans, someone having multiple asset interests, and other things that can put a kink in a straight chapter 7 bankruptcy, but those are not the norm. And if you have special considerations in your bankruptcy, it would generally cause me to stress the importance of key attorney attributes and experiences that I cover below even more.
For these reasons, fees are not generally a part of what I suggest you use as a comparison for the bankruptcy attorney you ultimately hire. If you think that fees could be a concern, post more about your situation in the comments below. With that out of the way….
The Good Things to Find in a Bankruptcy Attorney
I have spent a good amount of years working with people to help them resolve their debt. My approach has nearly exclusively been to help people find the quickest path to not just debt relief, but to accomplishing the goals they have for when the “debt dust” settles (usually with a 2 to 3 year view). And sometimes the quickest path to relief from debt can work against reaching your goals. When that happens, you want to know about it.
I can candidly tell you that not everyone in the debt relief industry works with those two things prioritized, let alone telling you to spend your money and time on another option that is a better fit for reaching your goals, even if that means losing you as a customer or client. And just because an attorney has a dedicated practice in the area of consumer law (that is the category that chapter 7 and chapter 13 bankruptcy fall under), does not mean they are good at it, or that they are going to help you understand how to make the most of what is already a bad situation.
Here are some things you can immediately look for when consulting with bankruptcy attorneys, paralegals, and paraprofessionals offering debt relief assistance through bankruptcy.
- Are all of the questions you are being asked (yes, there will be many questions) dedicated to numbers and figures?
Details about your income and expenses are necessary, no doubt, you cannot start your bankruptcy without knowing what you can qualify to do, and with which accounts. But I find bankruptcy professionals are overly focused on this aspect of the process. I encourage people to listen for leading questions the attorney or other debt relief professionals should be asking. These questions can include:
- Do you or any of your children plan on applying for student loans in the next 3 years?
Bankruptcy can impact individual and parent plus or direct loans.
- Do you plan on staying in the home you barely have any equity in, or may be upside down on, and if so for how long?
If the home is more cost than you can keep up with anymore, and you are not in a great equity position, it can make sense to plan that out with your eventual bankruptcy filing in mind so that you can seek relief from real estate related debts through the bankruptcy process.
- Are you experiencing and immediate medical issues, or do you have any immediate medical needs?
If your health is not stable at the time of filing bankruptcy, it can often be better to delay your filing until you are more stable. But there are times where financial stress can cause, or aggravate existing health concerns.
- Is chapter 7 going to cause you to liquidate non exempt items that could be sold and the cash used to settle debts for less than what you owe?
It is entirely possible to avoid bankruptcy by negotiating lower payoffs with unsecured creditors. It is also silly for many people to use debt settlement as a way to avoid chapter 7 bankruptcy, both from a cost and lost time basis, and even from a psychological one. But it troubles me how many reports I get from consumers about how the bankruptcy attorney they consulted with never touched on the possibility of settling bills to avoid filing chapter 7, and especially as a way to keep out of chapter 13 repayment plans that are often inflexible and hard to complete.
Unless you’re pulling into bankruptcy court with a financial tank full of fumes (your out of money each month before your out of bills to pay), all of the above leading questions should be assessed by bankruptcy professionals. Your answers to those questions, and several others, may still have you filing chapter 7 bankruptcy, but perhaps on a 6 or 12 month delay, maybe even longer.
You may need legal relief from a wage garnishment, lien, levy, or to prevent a loss of property. Bankruptcy can provide immediate relief from creditors right away. But unless you are in some type of financial emergency, you likely have time to consider why and when it is best for you to hire the attorney and proceed with bankruptcy.
For many people, finally reaching the decision to simply talk with a bankruptcy attorney was exhausting. As you go about gathering up information about the process, do not rush head long into filing if you do not need to right away. Slow down enough to not only make sure you are making the right choice, but that you are also maximizing the benefits that chapter 7 bankruptcy brings to what I know has already been a very difficult journey. And along that same line of thought, do not allow yourself to be rushed into filing bankruptcy by a bankruptcy professional.
Calling an Attorney for Bankruptcy Help and Information
There is so much more to learn about bankruptcy beyond taking the first step to call or walk into an attorneys office. I will be covering much more about bankruptcy in coming posts. I will wrap this one up by pointing out some obvious stuff.
- Do not take for granted that what you read about filing bankruptcy on line (including on my site) is accurate or the complete information you need. There are state specific concerns for bankruptcy, and a host of individualized things about your situation, that need to be discussed with bankruptcy professionals. That means consulting with someone about bankruptcy is important.
- Calling to consult with an attorney or their staff does not mean you are filing bankruptcy. It means you are gathering information you need. Those consults are going to be confidential, and many are offered at no cost. You can call the hotline I set up for a no cost consultation at 800-939-8357 and choose option 3.
- You can and should shop around for the attorney you want to hire. Just because you talked to one a month ago and got some helpful information, you are not obligated to hire that attorney. If something rubbed you wrong, they were not personable, or left off many of the types of things I talk about above that are very real concerns for you, I would suggest calling someone else.
- No cost bankruptcy consultations are common, but can also be relatively brief. Be sure to call back with additional questions that are sure to come up.
- Some attorneys will accept monthly payment plans when you are filing chapter 7 bankruptcy. They may not file your bankruptcy petition until you have paid their fee and covered courts costs and filing fees, but you can often get relief from debt collector calls and the like once you retain your attorney.
- There are some low income legal aid offices that provide discounted bankruptcy services to those who qualify.
- Just because you can squeak through with making payments on your debts each month does not mean you are not a perfect candidate for bankruptcy and a fresh start with your finances. I find people in this category to be some of the best candidates for chapter 7.
- If you are not being asked personal life and financial outlook types of questions by bankruptcy professionals you speak with (like those I covered above), I would question whether or not they are going to be looking out for your best interests.
- Don’t let debt relief professionals of any type skew your perception of how to resolve problem debts with talking points about how your credit scores can be hurt, and the damage to your credit reports that can occur. There is a ton of misinformation out there about how chapter 7 bankruptcy kills your credit, or cuts off access to financing. It doesn’t, at least not to the level you may be concerned about.
I’m considering chapter 7 in the next couple of months and live in California. If I contribute some of my savings to an IRA will it be exempt? I don’t currently have an IRA so will need to set it up.
Talk to an experienced bankruptcy attorney or two in your area. Find out what the look back period is on something like that.
I was in a Hardship Program through American Hope Resources! My debt is way larger now than before.They made many problems.
I have debt from the IRS (approx$22,000) and credit card debt plus ongoing $6500/month. My salary last year was substantial ($200,000) Now the company switched to pay based on productivity so that my pay is now 79,000/year. I many expensive medications and I don’t believe that I can resolve my financial debts on my current salary. I rent a house and own both of my high mileage vehicles.
One of my neighbors had surgery and he is not having a good time because he cannot work and now, he has a lot of debts. I did not know that you might not be able to file for bankruptcy if your health isn’t stable. I will recommend him to contact a bankruptcy lawyer so that he can get better assistance.
It’s helpful to remember that you shouldn’t rush into declaring bankruptcy if you don’t need to yet since you could potentially make the situation better for yourself first. My friend reached out to me and said they’re potentially going to need to declare bankruptcy next month if things don’t work out with work. Maybe talking with a lawyer could help him figure out what the best course of action is to help him out moving forward.
Thank you for suggesting that we don’t have to hire a bankruptcy attorney just because he helped clear some doubts. My brother is thinking about filing for bankruptcy and its good to know he doesn’t have to start working with the first one he talks to. I’ll share this article with him so he can be more informed about how to find a bankruptcy attorney.
hello Michael I live in Okeechobee Florida can you give me a name of a good lawyer I am over my head in cc dept I have a new truck $ been demoted at work less pay and hours please if you can thanks brad sickels
I cannot speak to anyone local to you. You can use your zip code to search at http://www.nacba.org and call a couple of the ones that are listed nearest you for a no cost initial consult.
We tried to avoid bankruptcy by using Rockwell Legal Group to settle our Credit Card debits. Unfortunately we just found out in 10months they never contacted our creditors they never sent a letter to any of them saying they were representing us. So to our surprise we received two summons, we are in worst shape now that back In September 2018. We have a list of serious issues that got us to this point, but we wanted to at least make ever effort to pay what we owed, I could have done negotiations myself if I had known how Rockwell was going to handle our account, I I know we have to answer this summons and I really don’t know about our other creditors if they will file against us so we are leaning to chapter 7 we just don’t want to lose our vehicles have you any advice we live in Monroe Ga and just not sure what to do at this point. Oh we did let Rockwell Legal go they did not hold up to their contract.
If you still owe money on the vehicle, you have an opportunity to reconfirm the loan in chapter 7, and keep the car. Talk to a local bankruptcy about this further.
Thanks for mentioning that calling to consult an attorney does not mean that you are filing for bankruptcy and that everything is kept confidential. My uncle is worried that he might need to file for bankruptcy soon but wants to gather information prior to making any decisions. I will let him know that he should consult a bankruptcy attorney in order for him to clarify what he needs.
Who is a good chapter 7 bankruptcy attorney in Okeechobee FL? 2 in our household with $4500 income monthly fixed but $55000 in debt.
Check out local attorney’s reviews as well as do the free consult to get to know a couple, then make a choice based on that experience.
‘Wow’, (guess I’m not the only one, re; prev. comments), thank you so much for all of this precious information. Mike, you have shown nothing but admirable qualities when negotiating this precarious subject, especially considering I’m a complete stranger who really thought there was only a 50-50 chance you’d even call!
Across the board you are upfront and concise with invaluably deep knowledge. Your professional approach is of the highest level without the pretentious attitude attached.
“I would recommend Michael Bovee to anyone that needs honesty and experience. There’s no question that this can be the most trying of times and Michael is the reassuring guy in your corner”!
I will keep you posted as to future talks with the various entities.
Sincerely,
Steve
Wow, Michael! You are so informative!
I live in Minnesota. I currently have 7 credit cards (all maxed out), in addition to a car loan and past due medical bills. Aside from the medical bills, I have never missed or been late on a credit card payment…..until this month. I can no longer afford paying all of the minimum payments every month and I’m scrambling today trying to determine which ones to pay and which ones I can’t pay this month.
I am a single mom. I have no assets, other than the car I am still paying off. No savings. I’m employed full time at around $40K a year. I’m also a renter. I will be meeting next week with a non-profit that does financial counseling to discuss the possibility of a DMP, but I have a feeling the payment is going to end up being too steep for me to handle every month. I have a feeling you’re going to advise me to consult an experienced bankruptcy attorney and take a look at chapter 7! Thoughts?
$2,300 Capital One CC
$2,000 Chase CC
$2,000 CC through my Credit Union
$700 Kohls CC
$5,000 USAA CC
$500 Walmart CC
$750 Target CC
$3,800 Car Loan through my Credit Union
$3,000 Past Due Medical Bills
I would indeed first run your situation by an experienced bankruptcy attorney. You will find $1500 to wipe out the credit card debt more cost effective than settling, or enrolling with the credit counseling agency in a DMP.
You will be surprised by how quickly your credit can bounce back too.
If you learn something that would prevent you from doing the chapter 7, and you cannot afford a DMP, post an update and I will break down what settling those credit cards will look like for you.
Who are the Bankruptcy Lawyers in Adams County, PA that you would recommend?
Check out this bankruptcy attorney map for your area: https://nacba.footguides.com/nacba
Hi Michael,
To refresh you on my situation:
– 8 plus K owed to 1st united credit union, and they are threatening litigation after not accepting my 2k settlement
– 12 plus K owed to barclays which has gone to a collections agency that has yet to contact me
From our last conversation, we decided that bankruptcy is best because my credit is already now a mess, so start fresh with no debt.
So since I’m a librarian, I got my trusty NOLO press book on bankruptcy from the library and have been reading up to get prepared and have thunk up some alternative strategies that I wanted to run by you. If we can talk, great, or If you can advise by email here’s the alternative idea:
According to NOLO, I am probably “judgement proof” … because I don’t make enough money for a judge to justify wage garnishment. And I own nothing to take. All I own is a saxophone and a 1992 van that I’m living in and there’s no way that 1st United will come after that, not worth it for them.
So, since bankruptcy is gonna cost $1,500 (since I do want an attorney to handle it), why not contact 1st united and say: guess what, I’m considering bankruptcy and have learned that if you litigate, it probably won’t be worth it because I have no wages to garnish or property to take. So you might want to reconsider my $2,000 settlement offer so 1st United can recoup something and I can take care of one of my creditors and avoid bankruptcy, win win.
Meanwhile, I can as best I can try to save some money over the next few years so that if and when Barclays comes to get me, I’ll have enough for a settlement and I can use the same strategy with them: that I’m judgement free and they should take whatever I offer because it’s probably the only way they’d recoup anything.
Does this sound feasible?
Thanks for all your help!
You are not going to do any harm by calling First United Credit Union and outlining your scenario. But they are extremely unlikely to take the deal.
Talk of bankruptcy usually does not impress a debt collector. They hear the threat all too often. There are some situations where you can make a compelling case for creditors agreeing to a better than normal settlement, but I cannot see that working with them.
I am pondering over a similar question – why wouldn’t the creditor at least take something, versus nothing in case of bankruptcy. In this line of thought, using the above example, is it possible to file for bankruptcy, then call the credit union, and say that bankruptcy filing has started, it’s their last chance to accept the 2K offer. And I guess my real question is, in case the union accepts the offer, can you then withdraw the bankruptcy filing?
Creditors hear the word bankruptcy all the time. Saying you are going to do it has lost its punch.
If you do file, and try to call to now settle for a great deal, they cannot take it, as no collection activity is allowed once they know you files.
Paragraph 22 🙂
I just learned today that AMEX is filing a lawsuit against me via a phone call from some debt relief company trying to help me. I looked it up to confirm and it was filed on Monday in my District Court (Texas). I haven’t been served yet, but imagine I will be soon. The debt is in my business name with me as a co-signer. I had to stop paying on my credit cards this past Spring (March) because I couldn’t keep up. I didn’t have a job and my funds had run out. There are other credit cards, 2 more in my personal name and 1 in my business name that I had to give up on because I couldn’t meet the minimum payments anymore. I have zero savings, I work as a contractor in an industry that is not stable. Another of my businesses takes the money for that work, it is not made out to me personally. The business that had the credit card debt attached to it is a failing business. I own a piece of property in that business name too. There is a lien on the property plus I owe 3 additional people related to this business. I have 2 more assets in my personal name with liens on them. Not sure what to do. There’s no way for me to come up with even 50% of the balance owed on the AMEX. I floated it as far as I could. Is it smart to file bankruptcy? I’ve already killed my credit, so I’m not concerned with that part. Just trying to figure out what my next steps are. What does a judgment mean in Texas?
It would be smart to consult with an experienced bankruptcy attorney. Get a handle on what chapter 7 would look like for you. If you can wipe out the debt this way, it is often the fastest and least costly option for debt relief.
Let me know if you learn something during your consultations about bankruptcy that will prevent you from filing chapter 7 and we can go from there.
Speaking to one today. Thanks!
Dear Mr.Bovee,
I had an open heart surgery which cost me a great deal but the hospital helps pay most of it. However it did not pay the anesthesiology which came from outside the hospital. I could not pay the fee of $6,821.82 which it sent to the Collection company. I am not able to pay it as I have been unemployed all my life, because I have a congenital heart disease, with a frail body. I live with my parents who are in their late seventies. Please tell me what charity or organization can help me pay for this debt. Your help is greatly appreciated.Thank you very much.
I cannot recommend a charitable organization that will pay the medical bill for you.
I have considered bankruptcy, but the cost is in excess of what I can pay. They charge from 2000 to 2500 for chapter 7, and 3500 for chapter 13. So, I have not paid my cc bills for over 6 months. Have had phone recent phone conference w/atty who recommends chapter 7, but I cannot come up with that kind of money. I am bankrupt! What are your charges, and can you take reasonable monthly payments? One atty said I could pay in 3 months, but I do not have enough to meet those payments either.
You can get a lower quote by calling my hotline, 800-939-8357, and pressing option 3 to connect with a bankruptcy professional. But you may want to see if you can get even more assistance by contacting any local low income legal aid office. If you qualify you may be able to get your chapter 7 done for the lowest cost, while still receiving legal assistance.
Hello again Michael. Recently you have given me some feedback on my situation regarding a voluntary surrender of my vehicle, leaving an almost 20 k balance that was being demanded by NuVision Credit Union. You suggested that due to my house being under water as well as this debt, that I file for ch. 7.
I am currently filing for a divorce, was the initial reason the vehicle needed to be given back.
The way it looked I thought I would have time to get the divorce taken care of and towards the end start a ch. 7. The divorce is still in the barely being filed stage.
I haven’t even met with a bankruptcy attorney, or should say haven’t found one yet, because I thought I had a moment to get divorce stuff in full swing.
Today I was served with papers from NuVision attorney demanding payment. No clue where to go from here.
Can I file bankruptsy while still being married?
Should I call this attorney now to see what I can do?
Before I had explained that even with cutting the balance on half to 9 k I wouldn’t be able to pay large amounts on that . I’m scared right now.
You really just need to consult with a bankruptcy attorney or 2 at this point. You have time to navigate the process of the divorce, and the lawsuit, to time your filing chapter 7. But get the consult out of the way, and you major questions too.
If it were me I would file an answer and defend the collection lawsuit. It buys you time. Many bankruptcy attorneys will disagree about defending the lawsuit, but it can me a cleaner way to avoid a judgment, and any garnishment or levy, if you end up waiting many months to fill in order to wait for the divorce to be final.
If you have a divorce attorney be sure to speak with him/her about all of this too.
Hi Michael,
Thank you for your generosity and kindness in providing this website and forum.
I have 7 credit cards past due and one medical collection account.
Two Chase (both Allied Interstate), two Citibank (one GC Services, the other not in collection yet), one Discover (not in collection yet), one Merrick (not in collection yet), one TJX (Allied Interstate). The credit cards not in collection yet will be soon, as they are 3-4 months past due. Approximate total credit card debt is $ 57,525.
I have one medical collection account for about $ 4k.
I can’t pay anything on the above accounts. I am working part time as a cashier to pay utilities, while looking for full time office work.
I am interested in talking with a consumer debt bankruptcy lawyer regarding my situation.
I live in Charlotte, NC and I see an earlier post where you recommended an attorney in Charlotte, NC. Can you give me that attorney’s contact information please? Any help is greatly appreciated.
I am going to send you an email with contact details to a law office that handles debt collection abuse and bankruptcy in the Charlotte area. Let me know how that consult goes. You can also use the resources I post in the above article.
Hi Michael,
Is there a way to private inbox you my situation? Your expertise is well appreciated and thank you very much in advance for your help,
In the right rail of every page of the site is a “Talk with Michael…” form you can fill in and submit. Those all come to me. I try to get back with everyone same day on those.
I had a question: I have a credit card with a very high balance in addition to other debts that I can no longer keep up with, so I am considering filing for chapter 7. I contacted my credit card company to see if I could get a lower monthly payment and the only way to do so would be to close the account, which i know will happen once I file anyway. Once I close the account, I am enrolled in a program where I pay the lower payment on the credit card over a 5 year period. Would I still be responsible for those payments after I have filed or is this something that can be thrown into the bankruptcy? Also have rental car that was totaled with damages of $13,000 by ex who hasn’t the income to pay for it, was not on my insurance and so I will be responsible. Should I enroll in hardship program for lower monthly credit card payments in the meantime? Should I file for chapter 7, will I still be responsible for making payments on the hardship program?
If you enroll in a hardship repayment plan with a creditor, or are in a debt consolidation plan working with a company, you can still file bankruptcy and include any of those debts. You would not be responsible for payments if you file chapter 7.
I would not engage in a debt consolidation or hardship payment approach if you thing you will be filing chapter 7 anyway. It would be the equivalent of throwing money away.
How much total debt do you have?
I was unemployed for about 2 years, racked up a lot of debt, and had fraudulent accounts opened in my name. It’s been a mess.
Now, I’m in a better position, I’m taking care of a temporarily disabled parent, so I’m not paying anything toward rent/utilities. This would be a good time to put as much toward the debt as possible, but I’m in a time crunch as far as needing to fix the damage to my credit. At the end of this year, I’ll have to be able to qualify for a place of my own, and buy a car. Currently, my credit is too poor for either.
I am afraid I may be too far gone for not just filing bankruptcy. However, I don’t want to put myself in a worse position at the end of the year by filing now.
Given the situation I would want to file chapter 7 bankruptcy as quickly as possible. You can get a decent car loan a year after your bankruptcy. You can still find an apartment after chapter 7. Check out the page I have dedicated to finding a place to rent with bad credit.
How much do all your unsecured debts add up to?
Around $11k, though because of the ID theft, there are more accounts I’m trying to clear up.
Talk to a local bankruptcy attorney or two and let me know what your thoughts are afterward. When the debt totals are around 10k and lower, and if you could raise roughly half of what you owe in unpaid debt, I may try to avoid the bankruptcy.
I spoke to you the other day about debt settlement, but since then I believe I am leaning towards filing chapter 7 bankruptcy. I do not know if there is another place on your website that covers the steps to follow towards filing ch 7. I am in Pennsylvania & I understand from you that pa has some of the least favorable laws. If possible could you email me links to your website about filing ch 7. & interviewing bankruptcy attorneys & whether or not the steps toward settlement or bankruptcy are the same. Do I stop making my payments now whether I decide if I can settle my debt or file bankruptcy? We discussed the fact that I need to do that to begin that process. I am still a little unclear, due to my memory dysfunction from the auto accident. Thank you again for your help.
Your next step should be calling to consult with a bankruptcy professional. You can reach one by calling my hot line at 800-939-8357, choose option 3. You can also look for one at http://www.nacba.org
Hi Michael,
I received a letter in the mail yesterday from Mandarich Law Group LLP (Chatsworth, CA). In the letter it states
“THIS COMMUNICATION IS FROM A DEBT COLLECTOR. THIS IS AN ATTEMPT TO COLLECT A DEBT, AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE.
Your account has been sold and assigned to our client, CACH, LLC. This office has been retained to collect the above balance that you owe our client. This is a demand for payment of your outstanding obligation.
In making this demand, we are relying entirely on information provided by our client. At this time, this firm is acting in its capacity as a debt collector and no attorney with this firm has personally reviewed the particular circumstances of your account”
It also states that I have 30 days to dispute the validity of the debt or they will assume the debt is valid.
The current creditor is CACH, LLC and the original creditor was First National Bank of Omaha. Current balance is $2,942.14.
I live in California. The above credit card account is one of the 3 credit cards I could no longer make payments on and stopped making payments about a year or two years ago. I am not able to pay the $2,942.14 on this account or any of my other accounts. What are my options right now? Should I respond and ask for a validity of the debt? What would happen if I don’t respond to the letter? Given my situation, what would you do in my shoe?
Thank you,
Kayness.
Can you raise half of the balance Mandarich Law is trying to collect for Cach? If you were able to do that, how long would it take?
Debt validation requests are far too simple for debt collectors to meet. Sending the request does serve a strategic purpose some of the time, but is counter productive in others. I cannot be certain of your situation with such little detail to draw from.
Thanks for the quick response Michael. I can possible do half of of the balance on this account if they were to offer me some kind of low monthly payment option. The problem is that I also have two other credit cards which are also in collection, with one being about $6K and the other about $4K. I wouldn’t be able to make monthly payments on all three of them 🙁
I filed for BK Chap7 in 2002 due to a lousy relationship with an ex, we owed a couple thousands in credit cards. I am so disappointed in myself right now because I got myself into the same situation again, but since I stopped making payments on the three credit cards it allowed me extra money to better budget my finances and expenses of keeping up with my mortgage and utility bills. I know this sounds bad but would it make sense to file for BK Chap7 again? I bought my house in 2012 for $314K and it is probably worth about $360K right now. I don’t want to lose my house.
I can indeed make sense to file chapter 7 bankruptcy again. If keeping the home is the priority, what state are you in (so we can determine your equity exemption when filing chapter 7)?
Hi Michael,
I am in California.
Thank you.
Should I wait to see if the law office decides to sue me first before I file BK Chap7? Will it be too late to file for BK once I am summoned a letter from the law office?
California protects 75k of home equity, and up to 100k if married (more if you meet certain elder provisions).
You could wait out getting served to file, but it would be a good idea to get the process rolling if you know you will be doing it anyway. Your credit bounces back pretty quick from bankruptcy these days, so might as well get that clock ticking.
Thank you so much Michael. I think I will take your advice and start the BK process. I have one last question for you. In 2002, I used a paralegal service to file my BK paperwork for me, do you think it would be ok to use a paralegal service to start the BK process for me this time? I am afraid hiring an attorney would be too costly. I currently have a mortgage which I’m current on (never been late), and a few department/credit cards which I’m also current on. Do you think my case is simple enough that I could file myself or use a paralegal service instead of an attorney? What’s your thought on this?
Michael, again, thank you. I really appreciate your time and the help you were able to give me. I’ve bookmarked you and will be referring anyone I know here.
Bankruptcy laws changed fairly dramatically in 2005. There are counseling certificate requirements pre and post bankruptcy, median incomes, and other changes you will notice. I do recommend working with a local attorney whenever possible. But I also recognize that many bankruptcies are just not complicated and can be done with some basic assistance (even with the 2005 changes).
You can probably find an attorney to help you from start to finish (including all court costs) for around $1,500.00. Contact a paralegal and let me know what they charge if you don’t mind.
Hi Michael,
So I spoke to a Paralegal who said he charges $125 to file Chapter 7. I would also pay $335 court fees, and $25 counseling fees.
Can you please take a look at my information below and based on your experience what is likely to happen? I’ve read that taking a loan against my car Title would be an option to save my car and I really don’t want to have to do that, but if that’s the best option for me, I may have no choice but to do so.
I have a 2010 Mazda CX-9 worth about $8K – my car will be paid off this month. Will this be too much of a value? I don’t want to lose the car.
I bought a house with a relative in 2012. Current house is worth $358K (per Zillow) with $280K left on the loan. There are two people on the loan, and 3 people on the Deed. When determining my share of the equity value is it divided between the two people on the loan or divided by the three people on the Deed?
My gross income is about $3,300 a month.
Family of 4 (myself and three children ages 13, 17, 19).
Thank you.
Your cars value is more than double the allowable chapter 7 bankruptcy exemption in California. I do not like the title loan angle at all. You could hit a rough patch and lose the car without any means to replace it.
Talk to a local bankruptcy attorney about the home equity. I do not see it being a problem at the $75,000.00 bankruptcy exemption for your residence in CA.
You are way under the roughly $80,000.00 income means test for a family of four living in California.
I moved the discussion from the page about debt that debt collection attorney sending you the notice your debt is being handled by them, to this page about finding a bankrupt attorney. I think people will benefit from your experiences using a paralegal as a cost saving alternative. Please continue this discussion here if you do not mind.
Great insight…my husband and I went to 3 attorneys free consultations, and all 3 were great informational experiences. After reading reviews about each of the attorneys we saw and discussing how we felt about each one, together we picked the one who not only answered all the questions we asked but the one who made us comfortable. Our peace of mind played heavily in our decision. We started the bankruptcy process on 3/18/2015. With our second “meeting”. We are paying per meeting as we go. The remaining amount, which is the biggest payment, has to be in full before they will file. Which is fine because we need this ball to get rolling because of pending litigation. The one thing to remember if you owe debt to a credit card that is associated with your checking/savings account change to a bank that you do not have any debt with. They will freeze those accounts once you file. And some banks will still freeze accounts even if no debt is with them, like WF. On the road to a new start.