Yes! You can still file Bankruptcy. Bankruptcy relief is still available. You may have heard about a new law passed by Congress that went into effect in October 2005. While it is true that the new law makes the process much more complicated, the basic right to file bankruptcy and most of bankruptcy’s benefits still remain for most consumers. We have extensively studied and practiced under the new bankruptcy law and can full explain your rights and options.
No! Do Not Procrastinate if you are facing legal action. Often, even when people are in danger of foreclosure or car repossession, or are being sued, or are having their wages garnished – even then, they do not want to think about filing bankruptcy. It is very painful to think of filing bankruptcy – especially before the person understands bankruptcy. In most cases, once we explain your bankruptcy options, you’ll be greatly relieved to find that your problems can be resolved after all. Do not wait until after your house is foreclosed, your car is repossessed, or your wages are being garnished. Find out what bankruptcy relief is available to you sooner rather than later.
Avoid debt counseling, credit repair, and bankruptcy-related scams. Sometimes when people are in difficult financial situations and they fear they cannot afford an attorney, they may listen to the assurances of unscrupulous operators who are all too willing to take their last remaining dollars. These operators appear in a number of types of businesses, but all offer the lure of a cheap, easy way to make financial problems disappear. They invariably leave the person poorer and, in many cases, much worse off than before. Here are some of the scams:
- Typing services (also called bankruptcy petition preparers) never provided very good service to bankruptcy clients. However, under the old bankruptcy law if you had a simple case the mistakes they made probably wouldn't cause your case to be rejected by the bankruptcy court. That is different now. Congress has made filing bankruptcy so complex and the legal knowledge to prepare a case is so important that typing services just cannot do the job. They cannot advise the debtor of ways to eliminate liens or pursue more complicated procedures. They cannot go to court or defend the debtor if a creditor attempts to oppose the bankruptcy or take advantage of the debtor. They cannot give legal advice that could save the debtor hundreds or thousands of dollars. A bankruptcy filed with only the help of non-attorneys often fails to accomplish even its basic purposes, thus leaving the debtor worse off than before. In fact, many cases prepared by typing services and filed under the new law have been rejected by bankruptcy courts. When debtors whose cases are rejected they try to file a second, corrected case, the new law takes away many rights they would have had in the first case. Therefore, it is very important to get the advice of an experienced bankruptcy attorney for your first case so that you will have all the rights and protections possible in that case.
- Other operations offer “credit repair” or credit counseling but are not associated with the established nonprofit credit counselors in the community. These outfits promise to make credit problems go away and to obtain new credit for those who have bad credit records. However, they know no magic tricks. At best they may obtain an expensive “secured” credit card, which can be used as long as the card user keeps enough money in a special account to cover the amount charged on the card. In most cases, customers do not even receive this dubious benefit, and the operators simply fail to deliver on their promises after taking the customer’s money.
- Other rip-off artists sell services that consumers could obtain for free or at minimal expense. After taking the consumer’s money, some offer only a referral to a bankruptcy attorney, who may not be very knowledgeable. Others, who claim that they can help consumers with bad credit to find housing, give lists of apartments taken directly from newspaper advertisements. Finally, some offer a debt-consolidation loan, which often means a home-equity loan or a refinancing of the debtor’s first mortgage. These loans can be big mistakes, turning unsecured credit card debts that can be wiped out in bankruptcy into mortgages that cannot be discharged; or trading debts with little or no interest for debts with high interest rates. The brokers or lenders who push these loans on debtors with poor credit histories usually charge very high fees.
The decision to file for bankruptcy requires careful analysis of your situation. You should file for bankruptcy only after determining that it is the best way to deal with your financial problems. There are a number of potential pitfalls and tricks in the new law, so it is very important to consult with a knowledgeable bankruptcy attorney. If your case is filed wrong, it may be dismissed for not filing a required document and if you have to file a new case you may not be able to get the same protection from your creditors. A good bankruptcy attorney:
- Is well-versed in the possible complications that might arise in what seems to be a simple and straightforward case;
- Is aware of recent changes in the law and of court decisions in the local courts;
- Can usually find ways of making a bankruptcy case more productive and effective than it would be if the debtor tried to handle it without an attorney, ultimately saving the debtor many hundreds or thousands of dollars more than the attorney’s fee.
Finally, having a good bankruptcy attorney can bring debtors the peace of mind that results from knowing their cases are being handled without the mistakes that they might make on their own