BANKRUPTCY FREQUENTLY ASKED QUESTIONS

WHEN DO MY CREDITORS HAVE TO LEAVE ME ALONE?

It is important to know that the trigger to formally be in bankruptcy is when your lawyer files the papers (electronically) and obtains an index number, otherwise known as a case number. At this point you will be in bankruptcy and an automatic stay is created.

 

WHAT IS AN AUTOMATIC STAY?

A stay is a fancy word to describe the fact that once a bankruptcy is filed, your creditors can no longer contact you or seek payment from you. They are estopped (prevented) from coming after you.

Simultaneous with the stay, your possessions and any assets you own will fall to the bankruptcy trustee to deal with.

 

WHAT IS A BANKRUPTCY TRUSTEE?

A bankruptcy trustee is usually a lawyer that is in private practice but also works per diem (on a case by case basis) for the bankruptcy court. The trustee does not have to be a lawyer and many trustees are in fact accountants and the like. 

A trustee is an appointed position and for each court there is a pool of several trustees depending on how busy that court is. A debtor has no control over which trustee they will be assigned. The electronic filing of the bankruptcy case will auto generate the trustee, judge and index number.

 

WHAT DOES A TRUSTEE DO?

The main job of the trustee is to make certain that a debtor in fact qualifies for the bankruptcy type (7 or 13) they have elected. That the debtor is not hiding any assets or has failed to list certain assets and to make sure that in a 13 the creditors are repaid (despite it being less than what is actually owed) fairly in relation to the other creditors. 

There is also one mandatory meeting with the trustee at the bankruptcy court where the debtor will be sworn in and the trustee will ask several questions about their filing. Do not let this concern you. Grant Phillips Law, PLLC will attend this meeting with you and will prepare you for the meeting. The actual meeting itself is about 5 to 10 minutes. 

Again, Grant Phillips Law, PLLC will have one of our dedicated and experienced attorneys sitting beside you at all times throughout the meeting.

 

HOW MUCH WILL A BANKRUPTCY COST?

There are several fees involved in filing a bankruptcy. They are as follows:

 

  • Attorney Fee – The cost your attorney will charge you. This fee varies from lawyer to lawyer, however there are certain guidelines and caps that if breached, will be questioned by the Trustee.
  • Court Filing Fee – This fee is statutory and fixed across the country. This fees pays for the index number and for the court to mail notice of your bankruptcy filing to all you creditors as listed on your creditor matrix. (The Matrix is simply a list or labels of all creditors by name and address)
  • Credit Reports – it is imperative that a credit report is obtained from each of the 3 main credit reporting agencies so as to make certain you are finding ALL your creditors. Remember what is listed on Experian for example may not be listed on the Transunion report. Hence, we obtain all 3 reports.
  • Tax Filings – one is not able to file a bankruptcy of any sort until all tax filings are up to date. This requirement is not as onerous as it sounds. It simply means there cannot be years where tax filings are still outstanding.
  • Credit Counseling & Debtors Education Courses –The bankruptcy code requires that a debtor who files a chapter 7 bankruptcy take a Credit Counseling Course prior to filing – a course done over the phone or online that teaches budgeting and best financial practices – and a Debtors Education Course after filing – again this course can be completed by phone or online. Both of these courses are offered by dozens and dozens of formal providers and usually a package for both is about $65. These courses are mandatory requirements as part of the bankruptcy

HOW LONG DOES A BANKRUPTCY STAY ON MY CREDIT REPORTS?

The time period differs according to the bankruptcy filing. For a total liquidation / Chapter 7 it will remain on your credit for 10 years. For a consolidated but discounted repayment plan / Chapter 13 it will remain on your credit for 7 years.

 

HOW CAN I REBUILD MY LIFE?

As stated previously, a bankruptcy is not the end but in fact the very beginning. It was designed and intended to provide a debtor with a fresh start. The lawyers are Grant Phillips Law, PLLC will show you many different ways to rebuild your credit. Additionally we have clients that have obtained credit soon after their bankruptcy filing. 

You will rebuild and with the help of Grant Phillips Law, PLLC and our comprehensive debt approach we will broach and discuss different options for cars and various types of housing. Grant Phillips Law, PLLC has clients that have filed bankruptcy and leased new cars or even purchased a house. It is important to know that happened in the past is no reflection of your future. 

You have made a business decision and you will rebuild financially. It is fascinating to know that at times we have even seen a client’s credit score INCREASE after the filing of a bankruptcy. The credit agencies algorithms are computer generated and the algorithm is programmed to reward consumers for taking care of debt rather than leaving it to sit.

Bankruptcy is not fun and certainly not a solution for all. However it is the ultimate form of taking ownership of the debt one owes and showing the algorithm that you have taken action rather than let past due bills sit. For this the algorithm will usually reward you with a slight increase in credit score. With your will and our experience and compassion, we will get through this together with minimal fuss using our logical, methodical and precision focus. 

Grant Phillips Law, PLLC is a different kind of law firm. You are NOT a number. You will only deal with an attorney from 1st consultation through to discharge – when your case has been approved and debts written off.

Grant Phillips Law PLLC

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670 Long Beach Boulevard, Long Beach, NY 11561 (516) 670-5165