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Bankruptcy FAQs

If you are experiencing financial stress, we know that you have a lot of questions and many concerns. We have compiled answers to some frequently asked questions. These answers are designed to begin to answer some common questions. However, they are not a replacement for, nor should they be considered legal advice. Please contact Jennie Patton’s office to schedule your free initial consultation to learn more about the options available to you and get your specific questions answered.

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Can I File Bankruptcy?

Whether or not you qualify to file for bankruptcy, and whether you should file for bankruptcy are two questions that are best that you discuss with an attorney. Jennie Patton can answer both these questions more fully when you schedule an initial consultation. In many cases, the answer is often yes, most people can file for bankruptcy.

Whether you qualify for a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy depends on your unique circumstances. Only a few may not be able to file a Chapter 7 Bankruptcy. This includes people who have filed a previous Chapter 7 Bankruptcy in the past 8 years, and people with high income. Some people who are not eligible to file under Chapter 7 are able to obtain relief under Chapter 13 Bankruptcy.

Contact Jennie Patton’s office to learn about the differences and to schedule an initial consultation.

Are my debts dischargeable?

A Chapter 7 Bankruptcy can “wipe out” most unsecured debt. Examples of debts that can be discharged include credit card debt, medical bills, debts owed on repossessed or surrendered vehicles, and many payday loans. Even most debts in collection status can be discharged. On the other hand, there are some debts that cannot be “wiped out” in a Chapter 7 Bankruptcy. Non-dischargeable debts include most IRS taxes, student loans, and child support.

What are the advantages and disadvantages of a Chapter 7 Bankruptcy?

Chapter 7 is the most common type of bankruptcy. It is the quickest and often the least expensive way to resolve insurmountable debt. Many people with debt problems qualify to file under Chapter 7. Chapter 7 Bankruptcy can “wipe out” credit card debt, medical bills, and debts from repossessed and surrendered vehicles among others. The greatest advantage of Chapter 7 is that you receive a financial fresh start. The emotional stress of an otherwise impossible financial situation ends.

The disadvantages of Chapter 7 include that your bankruptcy will appear on your credit report for up to ten years. The bankruptcy will affect your credit score although its negative effect will diminish over time.

Each person should weigh the advantages and disadvantages for themselves after obtaining information about what a bankruptcy would look like given their particular situation. Though it should always be a last option, most people struggling with debt report feeling a huge sense of relief when they decide to file bankruptcy.

What are the advantages and disadvantages of a Chapter 13 Bankruptcy?

The advantage of Chapter 13 Bankruptcy is that your creditors are stopped from all collection activity to give you time to catch up slowly, over time. A Chapter 13 repayment plan allows you to pay an affordable amount in an organized way. While in a Chapter 13 repayment plan you are protected from all collection activities including garnishment, repossession, and foreclosure. Embarrassing, stressful calls from collectors stop.

The disadvantage of filing Chapter 13 is that your credit is negatively affected. Also, while in a Chapter 13 repayment plan you need court permission to incur new debts, such as replacing a car, or refinancing a home.

For many people the advantages of filing greatly outweigh the disadvantages. Having a workable plan to protect your home, vehicles, retirement savings, and other assets while you tackle your financial problems in an organized manner brings much needed peace of mind. It feels good to propose a “best efforts” repayment plan and have a financially feasible solution to otherwise insurmountable problems.

Working closely with an experienced consumer bankruptcy attorney, you will propose a financially feasible repayment plan acceptable to the court. Jennie Patton will draft a Chapter 13 Petition and Plan will list all of your assets, all of your debts, and show how each debt is to be handled. While in Chapter 13 you are protected from all collection activities including garnishment, repossession, and foreclosure – thus giving you the time you need to resolve your financial problems.

What does the credit counseling requirement mean, and how do I meet this requirement?

Everyone who files must complete a pre-filing credit counseling course, and a post-filing financial management course. These courses were added as a requirement when Federal bankruptcy law changed in October 2005. These counseling requirements are easy to fulfill by either online or by telephone and must be completed before filing bankruptcy.

To meet this requirement, you will need to complete both courses from a court-approved vendor. If you work with Jennie Patton, she will refer you to our approved course vendor. Before taking any course, it is best to speak with an attorney, as he or she often will have advice on the most commonly used courses and may have arrangements in place to cover payment for the courses.

Were there other changes made to bankruptcy law in 2005?

There were sweeping changes to Federal Bankruptcy Law in 2005. The addition of the credit counseling and debtor education courses as a requirement for filing were not the only changes that were enacted in 2005. However, most people filing now will find that the current laws will not significantly affect the outcome of their case. Most people will be able to obtain the same results today that they could have received prior to the law changes made in 2005.

Additionally, today there are more possible errors or “traps” that people filing bankruptcy must avoid. Missing a deadline, not fulfilling a legal requirement, failing to submit documents on time, dishonesty or omissions can result in case dismissal. Knowing the law and staying up to date on changes to Federal and State Bankruptcy Laws is crucial to proper filing of your bankruptcy case. Seeking advice from a qualified Bankruptcy Attorney is the only way to ensure that your petition and documents are filed accurately without missing any deadlines.

If you are ready to file for bankruptcy, contact a qualified legal professional to help you navigate through the process and alleviate the complexity of the process.

How Can I Get A Copy of My Credit Report?

Everyone can obtain a free copy of their credit report from each of the three credit bureaus once per year. Go to AnnualCreditReport.com to obtain your free copies. This web site will ask you for your personal information. Select which report you want first: Experian, Equifax, or TransUnion. You will be directed to a section of your selected credit bureau’s web site and asked several additional questions to verify your identity. The questions are based on information contained in your credit report. If answered correctly, you will be able to view and print out your report. You can decline any additional services, such as obtaining your credit score, which costs money. The credit reports themselves are absolutely free.

Once you have your first report, return and repeat with another credit bureau. If you are stuck and can’t get a bureau’s report, try another one. If you do not have access to the internet you may call toll free 1-877-332-8228 and your reports will be mailed to you.

It is wise to review all three of your credit reports annually. If you catch errors on your reports, there are links to correction procedures.

Once you have your first report, return and repeat with another credit bureau. If you are stuck and can’t get a bureau’s report, try another one. If you do not have access to the internet you may call toll free 1-877-332-8228 and your reports will be mailed to you.

It is wise to review all three of your credit reports annually. If you catch errors on your reports, there are links to correction procedures.

How Do I Protect My Home and Other Assets?

The best way to protect your home and/or other assets is to have adequate income and make all payments on time. It is also important to have adequate savings, and full insurance to cover unanticipated problems. Unfortunately, real life doesn’t go so perfectly – we are human. Sometimes, despite our best efforts, things go awry. If you find yourself with insurmountable debt and the sense that you are sinking even though you are doing everything you can, then filing bankruptcy is a good option for you to consider.

Of great concern to most people is protecting their home and the things they have worked hard for. Most bankruptcy cases allow people to keep everything they own.

What are bankruptcy exemptions, and how do I plan for them?

The bankruptcy laws are not designed to strip away everything you own. Claiming an exemption protects a certain amount of assets, keeping them safe during bankruptcy. Exemptions are treated differently in Chapter 7 and Chapter 13 Bankruptcy.  The property is excluded from the bankruptcy by way of exempting its value from your available assets thereby protecting the property from liquidation to be used to pay towards your debt.

Working with a knowledgeable attorney such as Jennie Patton will help you plan for the exemptions you need to protect your property. Whether you file for a Chapter 7 or Chapter 13 bankruptcy will also depend on the type and value of the assets you need or want to protect.

There are limits to the amounts that can exempted based on state and federal bankruptcy laws. Therefore, it is best that you discuss these options with an attorney.

With proper planning, most people are able to exempt most if not all of their assets when filing for bankruptcy. It is important to be honest when disclosing property that you own. Odds are likely that you will be able to protect all of your property. Hiding real estate or other assets is fraud and comes with serious consequences. Contact a qualified professional to discuss how you can protect your property during bankruptcy. Jennie Patton’s attention to detail will help ensure that your assets are protected during bankruptcy. Most people who file with Ms. Patton keep everything they own.

How Does Home Foreclosure Work?

In Washington State residential foreclosure is a two-step process. When your mortgage becomes past due you are likely to receive a Notice of Default which requires you to catch up on your mortgage payments within 30 days. If you are unable to bring the mortgage current within 30 days, then a Notice of Foreclosure is served on you. This second step sets an auction date for the sale of the home in 90 days. Once the foreclosure process has started, the mortgage company will not accept partial payment, and the past due amount (which grows each month), plus fees and costs, must be paid in full prior to the sale date in order to save your home.

Mortgage companies are required by law to consider loan modifications and offer workout plans, but many people’s applications are ultimately denied, or the required payments are not financially feasible. In addition, refinancing or selling a home is difficult to complete while foreclosure is pending.

Fortunately, filing for a Chapter 13 Bankruptcy enacts an automatic stay and provides complete protection from foreclosure proceedings and other collection actions. The automatic stay helps you save your home and protect other assets. If you are facing foreclosure, you should contact a knowledgeable and experienced bankruptcy attorney such as Jennie Patton to learn more about the process. Do not delay, contact our office to schedule your initial consultation.

How Can A Lawyer Help?

Federal bankruptcy laws are complicated and unfamiliar to most people. Few attorneys are knowledgeable about bankruptcy law. Be sure and choose an experienced consumer bankruptcy attorney who will spend time with you to learn about your particular financial situation and then explain to you whether and how a bankruptcy could work for you. A good attorney will not only thoroughly explain the bankruptcy process but will also tell you exactly how each debt you have will be treated; let you know whether everything you own will be protected; and answer all of your questions. Working with an experienced consumer bankruptcy attorney will help you steer clear of potentially negative outcomes. Picking an attorney whom you trust and feel comfortable working with will ensure the best possible results and provide you with peace of mind. Jennie Patton will help guide you through the process of filing bankruptcy. She will take the time to answer all of your questions. With Ms. Patton you can rest assured that everything will be filed accurately and on time.