One myth surrounding bankruptcy is that your credit score will always drop after filling a case. Typically, about 12 months after filing your credit scores go up. The 3-bureau credit reports that we obtain show a projected post-filing score that usually goes up from those scores as tabulated prior to filing. For many of our clients we offer a free credit repair program designed to get their scores to a 720 shortly after filing for bankruptcy. But we must stress that the idea behind filing for Bankruptcy is not to build credit, but rather, to get out of Debt.

If you think about Bankruptcy and credit scores rationally it makes sense that the FICO scores go up. Someone has lots of debt before they file for Bankruptcy. No one, including credit card companies and other lenders are interested in standing in line to collect money from someone who owes many creditors. After someone gets a discharge in Bankruptcy they typically have no debt and can’t file another case for several years, making him or her a better credit risk.

Probably no one that you don’t tell unless they have also filed for Bankruptcy and are at the same meeting of creditors as you are. Your creditors will all get a notice in the mail. Typically, discovering that someone has filed for Bankruptcy requires access to confidential information such as a social security number and an account with a Court supervised vendor named Pacer. Historically, most employers do not run credit checks and it is a rarity that you will cross paths with anyone that knows that you have filed for Bankruptcy.

Up to 10 years from the date of filing.

The means test was created in 2005 by congress to make it difficult for people to qualify for Chapter 7 Bankruptcy. Ironically, in 2005 when The Bankruptcy Abuse and Consumer Protection Act was enacted it did very little to protect consumers.

At Randall and Waldner we pride ourselves knowing all of the ins-n-outs of the Means Test. While, it can be a challenge, we can almost always get you through the Means Test.

You can try.  I certainly would not recommend it in the case of Chapter 13.  Similarly, in a chapter 7 you can lose your assets if you do not exempt them correctly by listing the correct sections of the Bankruptcy Code.  It just makes good sense that  at the end of the day  attorneys are the best  at practicing law, just as  engineers are experts at designing buildings and surgeons are experts at surgery.   If you are not an expert in those fields you do not attempt to do what these experts are trained to do.

For these same reasons we do  not recommend hiring a preparer to take a stab at completing your case.   These people are non-lawyers who often are called out  for the unauthorized practice of  law and for this reason can’t lawfully give you advice.   Further, their cases are  often red-flagged by the Courts  as well as the Department of Justice for  extra scrutiny because many a citizen has fallen victim to their errors.  And it is not at all unusual for a Trustee  to ask an unrepresented debtor  who had helped them prepare the paperwork.  This question will be asked under oath and the last thing you need when attempting to escape a debt owed to a creditor is to perjure yourself and risk criminal prosecution that includes jail.    Once a trustee finds out a non-attorney helped prepare a case usually everyone, including the Debtor, gets into trouble.

Chapter 13 plan payments are very complicated but here are a few things that need to be considered:

1. Household income
2. Disposable income on the means test
3. Monthly living expenses for a household
4. Certain debts that must be paid in the case such as some taxes, domestic support and arrears for a mortgage, car or rent.