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You will need to complete the Consumer Bankruptcy Information Form or Business Bankruptcy Information Form and bring it to your appointment. This information will determine whether you are eligible for a bankruptcy discharge and help evaluate which bankruptcy (Chapter 7, 13, or 11) is right for you. It should take about 15 minutes to complete. The forms can be downloaded (from our website), emailed or mailed to you prior to your appointment.
Tragic events in life such as mounting medical bills, sudden job loss, divorce, mortgage foreclosure, wage garnishment, unpaid credit card bills, or a failed business are common reasons people file bankruptcy. Filing bankruptcy is a serious matter. Failure to have knowledgeable representation could result in being denied a discharge, your case being dismissed, and/or initiation of a criminal investigation. The Kugler Law Firm, P.C. offers clients experienced and confidential legal advice regarding your unique situation.
We will analyze which form of debt relief is most beneficial for you and explain the relief you can obtain with its limitations. Filing a bankruptcy case includes completing documents such as a Petition, Schedules, Statement of Financial Affairs, and possibly a Statement of Intention to be filed with the bankruptcy court. Once your case is started, you are required to attend a “first meeting of the creditors” to be examined by the trustee and creditors. Attorney Bruce Kugler will prepare you and will personally appear with you at this meeting.
You can choose the kind of bankruptcy that best meets your needs (provided you meet the requirements):
Chapter 7 – A trustee is appointed to take over your property. Any property of value will be sold to pay creditors. Depending on the law of the state where you live and the applicable exemptions, you will be able to keep some personal items and possibly real estate. Creditors may ask you to reaffirm a debt (continue to be liable for the debt).
Chapter 13 – Usually allows you to keep your property, but you must earn wages (or have some other source of income) and agree to pay your creditors for 3 to 5 years. The court will approve your budget and repayment plan. Your appointed trustee will collect payments from you, pay your creditors, and verify that you live up to the terms of your repayment plan.
Chapter 12 – Like a Chapter 13, but it is only for family farmers and family fishermen.
Chapter 11 – Used mostly by businesses and individuals with a significant amount of debt. In a Chapter 11, you continue to operate your business, but your creditors and the court approves a plan for you to repay your debts. No trustee is appointed unless the judge decides one is necessary. If a trustee is appointed, the trustee takes control of your business and property.
A discharge is a court order that relieves you from most of your debts. Some debts cannot be discharged. For example, you cannot discharge debts for:
- Most taxes;
- Child support;
- Most student loans;
- Court fines and criminal restitution;
- Personal injury caused by driving under the influence of drugs or alcohol
The discharge will only apply to debts that arose before the date you filed (if the judge finds that you received money or property by fraud, that debt may not be discharged). Debts not listed in your bankruptcy schedules may not be discharged. Debts may also be denied a discharge if you attempt to destroy or hide property, change records, falsify information, or disobey a court order. You may receive a Chapter 7 discharge once every eight years. (Other rules may apply if you previously received a Chapter 13 discharge).
Once a debt has been discharged, you are not legally bound to pay it; however, you may voluntarily pay any of your debts. You need not sign a reaffirmation agreement or any other kind of document to do this. Some creditors may hold a secured claim (i.e., the bank’s mortgage on your house or the loan company’s lien on your car). If the secured debt is discharged, you will not pay, but the creditor can take your property.
Reaffirmation agreements allow you to pay a debt that could be discharged. For example, you may want to keep your car. To pay that debt, you must work out a plan with the bank and file a reaffirmation agreement with the court. Reaffirmation agreements are voluntary.
- Must be voluntary;
- Must not place too heavy a burden on you or your family;
- Must be in your best interest; and
- Can be canceled anytime before the court issues your discharge or within 60 days after the agreement is filed with the court, whichever is longer.
If you reaffirm a debt, the debt is now non-dischargeable. If you fail to pay it, the creditor can take action to recover any secured property (i.e., property with a lien or mortgage). The creditor can also take legal action against you to recover a judgment.
There are mandatory government fees to be paid to the Clerk of the Bankruptcy Court for any person who files for bankruptcy. The filing fee for a Chapter 7 is $335.00, Chapter 13 is $310.00, and a Chapter 11 is $1,717.00 (these fees are periodically increased by the government). In addition, there may be other required filing fees such as amendments to schedules, creditors’ matrix motion or notice to convert, motion to reopen the case, motion for deconsolidation, and notice of appeal. These fee prices vary, but most are under $60.
Two classes, credit counseling and debtor education, are required by law for anyone filing for bankruptcy. These classes are approximately $12 each and take about 60 to 90 minutes to complete. Both classes can be taken online or over the phone.
Attorney fees are often charged in one of three ways:
- A flat fee which is often used for individuals filing a Chapter 7 case.
- An hourly fee which is normally charged in Chapter 11 cases.
- A combination of a flat fee and hourly fee which is often used for individuals filing a Chapter 13 case.
In Chapter 7, the flat fee will vary depending on the complexity of the case and the legal services that you need. The flat fee rate is based on several factors including, but not limited to:
- Single or married
- Number of creditors
- Income for the last 6 months
- Existence of pending mortgage foreclosure
- Decision to reaffirm a secured debt
- Pending lawsuits
- Wage garnishment
- Property that is subject to a mortgage or lien
- Existence of federal, state, or county tax claims or liens
- Eligibility for a Chapter 7 or Chapter 13
- Location of court where bankruptcy case will be filed
In Chapter 13, clients pay an initial payment toward attorney fees. The law firm receives the balance of the fees incurred from the Chapter 13 Trustee as payments are made pursuant to the plan. The client pays an hourly fee for post-confirmation legal services, as needed..