Q: If I file bankruptcy, will I lose my house?
A: Our main concern is to protect your property, specifically your home. We haven't lost a single home in 14 years when we anticipated that it would be part of a bankruptcy. We will help you save your home under Chapter 13, which is specifically designed to do so.
Q: How else can bankruptcy affect my credit rating?
A: If an individual has a high credit rating, about 700 and up, bankruptcy can reduce that credit rating to a level still approvable by many lenders. Those with a very low credit rating should experience a credit score increase over time after concluding their bankruptcy.
Q: How much does bankruptcy cost?
A: The attorney fees for Chapter 7 start at $700, depending on circumstances. For Chapter 13, the attorney fees are part of the payment plan. In most cases, there are no upfront fees aside from a mandatory $35 credit counseling fee. For more information about our affordable fees, contact Marshall Entelisano Law today.
Q: How fast can we get started and how soon can I begin to protect my possessions? How soon can we stop the creditors from trying to collect?
A: Once we gather the necessary documentation, our average turn around is generally 48-72 hours. As a service to clients, we also pull credit reports to confirm.
Q: What documents should I bring to my first meeting with you?
A: We need a 60-day record of clients' most recent pay stubs, their most recent tax returns and as many billing statements as possible. We also need proof of Social Security number and a valid photo ID (such as a driver's license).
Q: What about the credit union or other local financial institutions that I am currently a member of and do business with?
A: Often we are able to fashion a plan that doesn't affect personal banking and relationships with local financial institutions and personal banking.
Q: Will bankruptcy hurt my credit?
A: A person often looks stronger after bankruptcy, as it shows that the debt is extinguished.
Q: What if someone has cosigned on a loan? How will my bankruptcy affect them?
There is no simple, “One Size Fits All” answer. It depends on the type of bankruptcy, type of debt, status of the debt, and other factors that must be considered on a case by case basis.
The filing of a bankruptcy petition does not increase or create liability for a non-filing co-signer. If you co-signed with someone on a loan or are joint and severally liable for tax debt pursuant to a jointly filed return (and are not eligible for an injured or innocent spouse claim), you are liable for 100% of the debt in Alabama; regardless of who is the “primary” signer vs. the “co-signer.”
A secured debt may be reaffirmed by the Debtor in a Chapter 7 case with permission of the Court and the permission of the creditor. Generally, the creditor requires that payments be current and the collateral insured as a condition to reaffirm. If the debt is reaffirmed and the Debtor remains current under the terms of the contract, the co-signer will not be affected by the bankruptcy filing. The Court will not approve reaffirmation of unsecured debts such as a personal loan or lease; and the co-signer will remain liable under state law for the balance of the debt; but no more liable than prior to the bankruptcy.
Chapter 13 provides for a co-debtor stay pursuant to 11 U.S.C. Section 1301 for a consumer debt that prevents the creditor from collecting the debt from the non-filing co-signer if the Debtor’s Plan proposes to pay the debt in full through the Plan, and is one reason that a Chapter 13 may be preferred by a Debtor over a Chapter 7. However, there are situations in which the Debtor is unable or unwilling to protect a non-filing co-signer. There are also situations in which the co-signer is “judgment proof” and the creditor cannot practically collect any money or collateral from the co-signer; in which case it makes little sense for the Debtor to propose to protect the non-filing co-signer by paying the debt. It is important to note that tax debt is not a consumer debt, so there is no co-debtor stay as to the collection of any joint and several tax liability for the non-filing taxpayer.
The Debtor’s desires and options for co-signed consumer debts are thoroughly discussed and analyzed in order to choose the right chapter and plan for each client.