Randall and Waldner PLLC

Frequently Asked Questions

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  • Chapter 7 Bankruptcy FAQ
  • Chapter 13 Bankruptcy FAQ
  • Not Sure Which?

When you file for bankruptcy, it will become a public record. A letter declaring your bankruptcy from the courts will be sent to your creditors, and the discharge will go on your credit report, but other than your creditors and future creditors, typically the only people wo will find out are the ones you choose to tell. You may feel embarrassed if you have to file bankruptcy but you shouldn’t. In actuality, filing for bankruptcy is the responsible step in solving your financial problems and restoring your worth to society. A competent and hard-working person should feel that it is his/her duty to eliminate their disabilities to the extent possible and drowning in debt is one disability that can and should be eliminated.

If you are considering filing for bankruptcy, your credit score is probably not so great to begin with. It is a myth that filing for bankruptcy will ruin your credit score and make you unable to secure any loans in th4e future. In fact, the average credit score after Chapter 7 discharge is better than the credit score before filing for bankruptcy. Before filing it is unlikely that any creditor would lend you money with all of your outstanding debt owed to other creditors. After filing you are a better bet to future creditors because there is no one else you owe money to and that you are precluded from again filing for bankruptcy for ___ years after discharge.

Because of the financial recession that started in 2008, many financially responsible people were forced into filing for bankruptcy. With Chapter 7 being more common, lenders are not as wary of lending to someone with a Chapter 7 discharge as they may have been in the past.

Some debts cannot be discharged by filing a Chapter 7 Bankruptcy. Typically these types of debt include child support or alimony, government fines, student loans and most taxes.

One of the biggest benefits of hiring a bankruptcy lawyer is in the protection of your property and other assets like your home and car. Randall & Waldner will help you use legal exemptions to keep your property exempt to the fullest extent available under the law. We will also inform you in advance of any property or possessions that may be at risk of liquidation by the trustee.

This type of situation is the reason to let a competent bankruptcy lawyer review your case and advise you of your rights. So, while there are some people that cannot qualify for a Chapter 7 discharge, we are versed in other Chapters of the Bankruptcy code that you might qualify for.

Not necessarily but the possibility of a liquidation by the trustee is a reasonable concern. Under both state and federal law there exists exemptions from liquidation when filing for Chapter 7 relief. This highlights one of the biggest advantages of hiring a reputable bankruptcy lawyer. Having a knowledgeable attorney in your corner will ensure that you will be able to protect your property to the fullest extent of the law and most of your property is typically protected from liquidation. Historically, most people who are represented when filing for Chapter 7 hold on to their house, car, family heirlooms, and other valued items.

Learn more by reading: Do I Get to Keep My House and Other Assets in Bankruptcy?

In order to qualify for Chapter 7, a debtor must pass the means test. The test is a two-step income and expense analysis that is very complicated to calculate. Our office will evaluate your situation to determine if you can qualify for a Chapter 7 or any other alternative (like a Chapter 13) to get the help you need. Just call us for that free consultation and you won’t be sorry.

Absolutely. Once you retain Randall & Waldner, we’ll timely file your Petition and deal with your creditors so that you won’t have to do so yourself. Once collection agencies are informed that our office represents you, they are no longer allowed to harass or even contact you. Other collections, such as wage garnishments, are also halted once your case if filed. Furthermore, Bankruptcy can stop foreclosures and repossessions of your property.

Certainly, but it may not be a good idea for you to do so. It might be a devasting mistake for you to represent yourself, hire a petition preparer, or even retain an inadequate attorney. Remember the very old saying that “A man who represents himself has a fool for a client.” Or to put it another way “Don’t try to step out of one mess by stepping into another.”

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, t heir 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.

Remember, in Chapter 13 most of your debt does not need to be repaid or is greatly discounted as a means of aiding you reorganize. In essence, your actual disposable income is the amount you are required to pay the trustee each month your plan remains in effect. If there is enough disposable income to fund a chapter 13 then it will likely be successful. And once the case is over virtually all of your debts get discharged regardless.

Absolutely, we help Debtors with this every day. Typically, court approval is required but we always look at the feasibility for a modification.

One thing unique to Chapter 13 Bankruptcy is called the “Co-Debtor Stay” Which is an automatic stoppage that applies to a co-signor of consumer debts while your case is open and before discharge.. That means that if you and a member of your family are jointly liable on a consumer credit card and one of you files for Bankruptcy then the creditor will not be allowed to go after the non-filing family member to collect on the debt but only while the case remains open. This stay will not apply to business debts.

Even most debts that are not Dischargeable are actually paid out in a chapter 13 case. So, creditors cannot try on collecting on debt, with a few exceptions, while in chapter 13. Some debts that are not discharged (but usually paid off by the Trustee anyway) are:

  1. Mortgages on assumed property
  2. Rental arrears on assumed leases
  3. Domestic support that is not paid in the case
  4. Student Loans
  5. Criminal Restitution

It’s complicated but a Chapter 13 discharge will eliminate credit card, medical and most other unsecured debts. Student loans are almost never forgiven. And should there exist a second or third mortgage on a home or other property that is under-secured (meaning that there is no equity left in the property securing them) then they can often be wiped out completely.

The answer is almost always yes. A Chapter 13 trustee will try to get you to pay back as much as possible without destroying the feasibility of your Plan. They do this by trying to persuade the Court and the Debtor to increase the plan payments. But our job as your bankruptcy attorney is to show the Court and trustee why the payments should be lower and not higher. Having the right attorney can save you many thousands, or tens of thousands , over the life of a Chapter 13 case. Many of the Chapter 13 cases we have worked on have payments of less than $200 per month.

Absolutely. Chapter 13 can help with your taxes, domestic support obligations, and even with student loans if you know how to structure it properly and you also have the option of using Chapter 13 to create a long term repayment plan for certain debts that are not dischargeable in Chapter 7 Bankruptcy. But this is serious business that you’ll need serious attorneys in order to take advantage of the full range of options available to you. So don’t delay and call Randall & Waldner for a free no obligation evaluation of your situation.

Chapter 7 or Chapter 13?

Find out which is best for you. Call today.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is a form of debt relief intended to help honest individuals get a fresh start by discharging most debt. It is the most common form of bankruptcy. Chapter 7 bankruptcy is sometimes called “liquidation bankruptcy” because certain assets may be liquidated to repay creditors. However, chapter 7 bankruptcy is more commonly known as “fresh start bankruptcy” because the majority of debt discharged when filing chapter 7 is wiped clean without repayment or the liquidation of assets.

Benefits of Filing Chapter 7 Bankruptcy

  • • Become Debt Free!
  • • Find Relief from credit card debt, personal loans, or medical bills
    • Stop wage garnishment and collection efforts
    • Discharge your debt in as little as 3 months
    • Keep your property through legal exemptions
    • Improve your credit score and eligibility for loans in the future

Will filing for bankruptcy get rid of all my debt?

Chapter 7 discharges (get rid of) most unsecured debt. This is why its commonly referred to as a “fresh start” bankruptcy. Once you have filed for bankruptcy, the courts will discharge your unsecured debt freeing you to move forward with your life.

Will filing for bankruptcy get rid of all my debt?

Chapter 7 discharges (get rid of) most unsecured debt. This is why its commonly referred to as a “fresh start” bankruptcy. Once you have filed for bankruptcy, the courts will discharge your unsecured debt freeing you to move forward with your life.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a form of debt forgiveness intended to help individuals who are behind on payments, such as their car or mortgage payments. Unlike chapter 7 bankruptcy (which discharges debt) Chapter 13 bankruptcy restructures a person’s debt with a repayment plan, allowing them to repay a portion of their debt over a period of 3 to 7 years, and can also discharge or reduce unsecured debts. Once the plan payments are completed, the debtor will receive a discharge of almost all liabilities and will be able to keep his or her property.

What are the Benefits of Filing Chapter 13 Bankruptcy

  • Stop foreclosure proceedings immediately
  • Stop repossessions
  • Keep all of your assets
  • Prevent interest from increasing on tax debt
  • Eliminate second and third mortgages
  • Stop collections against your co-signers
  • Get out of Tax debt
  • No student loan payments are required while in chapter 13 bankruptcy

How does a Chapter 13 Bankruptcy plan work?

During Chapter 13 bankruptcy a petitioner must submit a repayment plan to the Court. Chapter 13 plans are complex and require the expertise of a qualified Washington State bankruptcy attorney to ensure your repayment plan is accepted by the Court and that your plan provides you with the most strategic repayment arrangement available. Typically, chapter 13 plans contemplate monthly payments made directly to a trustee. The trustee then disperses the money to creditors in accordance with the Bankruptcy Code. Depending on your circumstances, the repayment plan spans 3 to 7 years. Once a chapter 13 plan is completed, your debt is discharged.

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