Thousands of people file bankruptcy each day because hard times prevent them from paying their bills. Job and medical problems are the most common reasons people file bankruptcy. A study by Harvard Law School showed that two out of three people in bankruptcy have lost their job and half have experienced a serious health problem. Thirty percent of bankruptcies are filed by women filing alone and the average age of bankruptcy filers is 38. Contrary to public perception, the average bankruptcy filer is well-educated, a homeowner and married. In fact, many successful people, including Walt Disney, Donald Trump, Mark Twain and Frank Lloyd Wright have used bankruptcy to get a fresh start.
Unfortunately, many people wait too long to file bankruptcy, which hinders the fresh start. They wait until a foreclosure has started or their retirement accounts have been drained trying to stay afloat. They wait until a judgment has been entered and garnishment is possible. Bankruptcy has been called a last resort but it should instead be one of the first alternatives you consider.
At Nancy L. Thompson Law Office, P.C. we try to make the process of filing bankruptcy as stress free as possible. We start by having clients complete and return a questionnaire that helps us make sure all the information we need is provided. We also ask you to provide several documents like a credit report, tax returns and six months of paystubs. A complete list of these documents is included in the bankruptcy client packet we’ll send upon request. The packet also contains an engagement agreement that describes our representation and the website address for completing the credit counseling required prior to filing bankruptcy. You can request this packet by emailing us at [email protected] or by calling 515-875-4850.
Bankruptcy Do’s and Don’ts
Once you’ve decided to file bankruptcy it’s important to understand some “do’s and don’ts”. For example,
- Don’t use your credit cards anymore. The use of credit and cash advances before filing bankruptcy might be considered fraud and could delay filing.
- Don’t repay loans or debts to family members and friends. Preferring these “creditors” over others could result in them having to repay the money.
- Stop paying unsecured debts that will be discharged in the bankruptcy.
- Stay current on loans secured by property you want to keep, like your house and vehicle.
After we receive the completed packet and retainer we’ll get the paperwork prepared and schedule an appointment to meet and review it. If the fee has been paid in full and all the information provided we can file the bankruptcy shortly after this meeting. About 30 days following the filing of the bankruptcy schedules, you’ll meet with a trustee appointed to oversee the bankruptcy. Creditors are also allowed to attend these meetings but rarely do. At the meeting the trustee will ask questions about the paperwork and try to determine whether there is any property that’s not exempt and available to pay unsecured creditors. Your part of the meeting usually doesn’t take more than a few minutes.
About two months after this meeting a Chapter 7 bankruptcy will result in a discharge. In a Chapter 13 the proposed plan of repayment will likely be confirmed within two months. You’ll also need to take a second counseling session before your bankruptcy case can be discharged. Once your case has been closed we’ll send you a letter about next steps to making sure your fresh start is really achieved.