Bankruptcy - It's What We Do!

Mr. Lewis has counseled hundreds of clients with regard to filing bankruptcy. The filing of a bankruptcy petition in court gives you the protection of federal law against aggressive creditors and debt collectors. The preparation and filing of a bankruptcy petition is a highly technical and complicated procedure that requires the expertise of a professional to help ensure that your case is successful.

What exactly is bankruptcy? 

Bankruptcy is a federal law that allows a "debtor" to eliminate or reorganize debt according to a specific chapter of the bankruptcy code. For individuals and consumer debtors, Chapters 7 and 13 are the most widely employed means of filing for bankruptcy protection. Bankruptcy is a financial planning tool utilized by individuals and businesses alike to get a fresh start and enables people to start rebuilding their credit worthiness. Bankruptcy is the legitimate means of getting back on your feet by shedding oppressive and burdensome debt and at the same time keeping property exempt from aggressive creditors and avoiding harassing debt collection efforts.

How does bankruptcy work? 

One who files for bankruptcy is called a "debtor." When a debtor files a bankruptcy petition, he or she is asking the bankruptcy court to "stay" collection efforts by creditors. When a bankruptcy petition is filed, an "automatic stay" against collection goes into effect against most, if not all, creditors and lawsuits. All of your legal and equitable interest in property is held by an appointed bankruptcy "Trustee" who will examine your bankruptcy petition to determine if you have any non-exempt property or assets.

In a Chapter 7 bankruptcy, if you have non-exempt property (property you cannot keep), that property is turned over to the Trustee for "liquidation" and distribution to your creditors. Because of "exemptions," most people who file bankruptcy keep everything, including your home, car and personal possessions. If all of your property is exempt (most common), the Trustee reports to the Court that there is nothing available for distribution to your creditors, the Court thenenters a "discharge" order and your case closes - forever barring your creditors subject to the stay from ever collecting your debt.

How much does  bankruptcy cost? 

The main costs associated with filing bankruptcy are the attorney fee, court filing fee and cost of mandatory credit counseling. The court charges $313 to file a Chapter 13 and $338 to file a Chapter 7 case. For Chapter 7, the attorney fee depends on your unique case and how much work it will take to get it done right. Lewis Legal believes in charging a fair and reasonable fee for quality work. Be wary of any law firm that has established a "one size fits all" fee. It likely means that your case will not be given much attention and it may even fail in court. After an initial consultation, you should have a  pretty good idea as to how complex or straightforward your case should be and what it will cost. In Chapter 13, attorney fees are capped by the bankruptcy court at the typical fee of $4,500. Credit counseling varies in price but should be no more than $40 for both required courses together.

What is the difference between Chapter 7 and Chapter 13? 

Chapter 7 bankruptcy involves the turnover and liquidation of non-exempt property, if any, for the benefit of creditors (people you owe money). Chapter 7 is the most common type of bankruptcy and is typically thought of as "wiping out" debt. Chapter 13 bankruptcy is a debt reorganization plan for wage earners and debtors who have regular income.  In Chapter 13, the debtor proposes a repayment plan done in good faith and with the best efforts of the debtor. The amount of the required repayment is determined by a  variety of parameters set by the bankruptcy code. Lewis Legal Services will help you determine if Chapter 13 is an option and how to propose a plan that will be confirmed by the court.

Will I lose anything in bankruptcy? 

Bankruptcy law allows you to keep a certain amount of property by claiming it "exempt." For most people who file bankruptcy, this means that you end up keeping everything you have and the only thing that you "lose" is your debt. 

The extent and type of property that may be claimed exempt is complicated and varies from state to state.  Lewis Legal Services advises clients on what the exemptions are and how they work to make sure that you make a fully informed decision in filing bankruptcy.

Will I qualify for bankruptcy relief? 

Whether you "qualify" to file bankruptcy is very fact specific and depends entirely on your unique situation. A full consultation with Lewis Legal Services will provide you with a fully informed opinion as to which bankruptcy chapter you may file and what your best option would be.

Creditors / Debt Collectors are harassing me! When will that stop?

One you have retained our firm, you can refer creditors or collection agencies to call your attorney and if they have sued you, they can't call you directly once they know you are represented by an attorney. Once your bankruptcy case is filed with the court, you are provided with the protection of the "automatic stay" which prohibits creditors from contacting you in any way for the purpose of pursuing collection of debt.

What is the "automatic stay" in bankruptcy?

The "automatic stay" in bankruptcy is basically a restraining order imposed by the court as a matter of law against all of your creditors (people to which you owe money). The automatic stay goes into effect immediately upon the filing of your bankruptcy petition with the court. Some people to which you owe money, such as a child support recipient, are not subject to the automatic stay and some others are only partially limited. The automatic stay stops garnishments, repossessions, foreclosures and the like from being further pursued unless given permission by the bankruptcy court via a "lift of stay"

Does bankruptcy stop garnishments, foreclosures and frozen bank account?

Yes, immediately upon filing your bankruptcy petition with the court, the "automatic stay" prohibits further action from proceeding with respect to wage garnishments, foreclosures, freezing non-exempt assets in bank accounts and other debt collection actions.

Will I have to go to court?

Everyone who files bankruptcy must personally appear at a "Meeting of Creditors" before an appointed bankruptcy Trustee. Also known as a Section 341 meeting, the purpose of this proceeding is for the bankruptcy Trustee to ascertain that all documents have been provided and required forms have been completed truthfully and in full and to ask the Debtor questions under oath about his/her financial condition. As the name implies, the meeting serves as an opportunity for interested creditors to ask questions of the debtor on the record, although it is most common to be a meeting between only the appointed trustee, the Debtor(s) and the Debtor's attorney.

How can bankruptcy save my home from foreclosure? 

Foreclosures and repossessions can be stopped and eliminated by Chapter 13 bankruptcy relief. Chapter  13 is a reorganization plan that can be used to stop foreclosure and  restructure the arrearage (the amount of payments and fees that you are behind on)  into a payment plan between 36 and 60 months in length.  The amount that you are behind is stretched  out to be payable over the life of the plan and upon completing the repayment  plan, you will be back on track with your regular mortgage payments with no  arrearage. When a Chapter 13 repayment plan is filed with the court and confirmed, the bank must accept the repayment plan and stop all effort at foreclosure or repossession.

What bankruptcy can and cannot do? 

Bankruptcy is about getting a fresh start; however, some debts are not subject to "discharge" and are generally unaffected by bankruptcy. Debts are classified into different classes under the bankruptcy code, ranging in priority, non-priority and "dischargeability."

Generally, debts that can be cancelled in bankruptcy (discharged) include credit cards, personal loans, lawsuits on debts, deficiency judgments, medical bills, some tax debts.

Debts that are not subject to discharge and remain intact after bankruptcy generally include child support obligations, most tax debt, most student loans, alimony, criminal fines and restitution. Also, any debt can be deemed unable to be discharged by the bankruptcy court if fraud or other gross misconduct is found (i.e. running up credit cards before filing bankruptcy).

Did You Know? 

Bankruptcy and the ability to shed the oppressive weight of debt was so important to the founding fathers of our country that it was a part of the Constitution before the Bill of Rights, including freedom of speech, exercise of religion, etc. In supplementing this guaranteed right, Article One of the Indiana Constitution recognizes the "privilege of  the debtor to enjoy the necessary comforts of life" by keeping a reasonable amount of property exempt from seizure by creditors.

Knowledge is Power 

Lewis Legal Services can guide you through the very complicated maze that is bankruptcy and determine if bankruptcy is the right solution for you. 

Call or email today to set up an appointment for a consultation.

A free consultation with Attorney Eric Lewis provides an informed opinion as to what your options are in consumer bankruptcy relief and whether that particular course of action would be your best solution for your particular circumstances. 

Timing is crucial when threatening collection actions escalate and debt collection lawsuits become judgments resulting in liens and garnishments. Don't sleep on your rights! Seek confidential legal advice today.