Frequently Asked Bankruptcy Questions

I am afraid if I file bankruptcy all of my neighbors, co-workers, and friends will know that I filed and my picture will be in the newspaper and on TV. Is this true?

Usually all of your friends, co–workers, and neighbors will never know you filed bankruptcy unless you tell them.  If you apply for new credit, the new creditor will run a credit check on you and they will know you filed bankruptcy in the past.  Usually, your name will not be in the newspaper ot TV, unless you are a millionaire filing or some celebrity.  Each year there are over 1,000,000 bankruptcy cases filed in the United States.  Therefore, there are probably some of your co-workers or neighbors that have filed bankruptcy themselves.   Many years ago it was considered immoral to file bankruptcy.  Now with today’s financial times, it is an option many people use. I have personally filed thousands of bankruptcies.  I have never had a client tell me later that that was a terrible mistake. Nearly everyone tells me how happy they are now to get rid of all the stress the debts had caused.  Are you aware that, among other famous people, Abraham Lincoln and Walt Disney filed bankruptcy?  They didn’t turn out to bad did they?

I am behind on paying my taxes. The IRS and state have threatened me with garnishing my paycheck, taking all the money from my bank accounts, and taking my property and selling it to pay off some of the taxes. If they would just agree to work with me I could try to pay them. Is there anything I can do to stop them?

You should consider filing a Chapter 13 bankruptcy.  A Chapter 13 consolidates all of your tax debts into one monthly payment which you pay to the Chapter 13 Trustee, and in turn he/she pays it to the IRS or the state over a three to five year pay back plan.  The Chapter 13 bankruptcy stops the IRS and state from garnishing your wages, taking money from your bank accounts, and selling your property at a tax sale.  Even the IRS has to follow federal law when it comes to bankruptcy protection.  Under some circumstances, we may be able to eliminate old taxes that you owe.  See me for the details.

I am behind on my credit card payments and I owe more than I can afford to pay back. Creditors and collection agencies are calling and harassing me day and night. Can bankruptcy stop these horrible nasty collection people from harassing me?

Once the bankruptcy is filed, under federal law 11 USC § 362, an “automatic stay” which is a court order from the federal bankruptcy judge, is immediately enacted.  Under federal law, your creditors cannot call you, sue you, or harass you without permission from the judge.  This is valid throughout the United States. So yes, the initial filing of the bankruptcy stops the harassment from creditors.

Is there a cost for the first consultation?

At Duncan law we usually offer free initial consultations.  We will sit down with you and discuss your options regarding how bankruptcy may help you.  If there is going to be an initial consultation fee (which 99.999% of the time there is no fee) we will let you know before you meet with us. The initial free consultation is for about 30 minutes.  However most free initial consultations last longer than the 30 minutes.  You do not pay any additional fees for the additional time (up to a limit). However, we cannot spend all afternoon talking to you about your case for free or we would go broke ourselves!

I can barely afford to pay these debts that I have. How can I afford to pay an attorney to help me?

At Duncan Law we understand that times are bad. We are very competitive with our attorney’s fees.  There are some newer, less experienced attorneys that may be a few dollars less than us on attorney’s fees.  There are many attorneys that are more expensive than us.  What we try to do is give you a good value in what you spend in attorney’s fees.  We offer easy payment plans.  Many people tell us the attorney’s fees are well worth all the debt that we can eliminate.  We cannot give you an exact dollar quote on this website for a bankruptcy because of the different complexities and issues in each individual bankruptcy.  However call our office at 704-297-4000 and we can give you a rough estimate after we have discussed your case with you.

How is Duncan Law different from these “stop foreclosure” companies to save my house?

The “stop foreclosure” companies attempt to convince the mortgage company to work with you when you are behind on your mortgage payments.  The mortgage companies may or may not agree to work with you on a loan modification or restructuring your mortgage.  Once the foreclosure process has begun, the time for negotiation is usually over.  Many times the mortgage company is not willing to work with you and they proceed with the foreclosure sale process.

Duncan Law does not negotiate with the mortgage company.  Using the power of the federal courts, we force them in to a Chapter 13 repayment plan and stop the sale of your home (with very few exceptions). There is no negotiation with the mortgage company.  They are forced to work with you on paying back your late mortgage payments by the federal courts. This process stops the sale of your home if you qualify for the Chapter 13.

There are many “stop foreclosure” companies on the Internet and on TV. Should I use these companies instead of Duncan Law to stop the foreclosure process on my home?

BE CAREFUL!  Most of these companies are con men that “promise you the world” to get you to pay them money.  There are a few legitimate companies, but be very careful, especially if they want you to pay them large sums of money up front.  They prey on your desperation to save your home. They will usually only make a few phone calls to your mortgage company on your behalf to try to stop the foreclosure.  You could make those same calls yourself for free. If you cannot talk to these companies in person and they are in another state, you should be very careful.  I see clients all the time complaining about how these people took their money and did nothing for them.

My home is about to be foreclosed. Can a Chapter 13 bankruptcy stop the foreclosure sale of my home?

Normally a Chapter 13 bankruptcy can stop a foreclosure sale of your home. You must file the bankruptcy before the actual sale of your home (with a few exceptions).  In the Chapter 13, you payback the amount you were behind on, plus your regular house payments, over a three to five year repayment plan to a Chapter 13 Trustee. However, you prove you make enough income to payback the Chapter 13 plan payments.

What are the requirements for a hardship discharge of a student loan?

A common example for a possible hardship discharge is if you were in an accident and were paralyzed from the neck down and on a breathing machine.  You had no money coming in and were totally broke. That may be considered a hardship! As you can see, this is a very high standard for a “hardship.” Otherwise, you can pay back something each month on the student loans and the student loans will not be eliminated in the bankruptcy.

I read on the Internet if it was a hardship for me, student loans could be eliminated in bankruptcy. Paying back these outrageous monthly student loan payments over may years is a hardship for me. Can I get rid of these student loans because of this hardship?

Usually No! There is an exception in the bankruptcy code for student loans which states student loans that cause a hardship may be eliminated in bankruptcy.  The key question for the bankruptcy judges is what is a “hardship”?  Most bankruptcy judges in the United States have ruled if you can pay back any amount of the student loans, the student loans cannot be wiped out in bankruptcy.  This is true even if you are paying back the student loans for the rest of your life. Therefore, nearly no one would qualify for a hardship discharge in bankruptcy.

Can bankruptcy wipe out student loans?

Sadly the answer is usually NO!  If we could wipe out student loans in bankruptcy, I would have people lined up outside my door to see me.  The bankruptcy code specifically states  student loans cannot be wiped out in bankruptcy.  Most student loans are guaranteed by the federal government, this is why they are so easy to obtain (but not pay back).  The federal government is going to make sure they are paid back their money and specifically excluded student loans from bankruptcy discharge laws.

I was told if I file bankruptcy I would not be able to get any credit for the next seven to ten years, is that true?

Most people can obtain credit immediately after the bankruptcy is over. In the case of a Chapter 7 bankruptcy, that is about 3-4 months after you initially file the bankruptcy.  However, you will usually pay higher interest rates and receive a lower line of credit for the first few years.  Many of my clients are surprised immediately after the bankruptcy is over they are receiving offers in the mail for new credit cards and offers for them to purchase new cars. Normally it will take you about two years after the bankruptcy to “rebuild” your credit.  At that time you will usually be able to get credit and pay “normal” interest rates. I have clients buying new homes, with good interest rates, as soon as two years after the bankruptcy.

I have done research on the internet and many companies offer blank bankruptcy forms that I can fill out for a relatively low amount of money, why should I pay an attorney money when I could probably fill out these forms on my own? I am a smart person!

Despite what you can read on some websites, not all information on the internet is true.  Yes, you do have the legal right to try to file your own bankruptcy.  You also have the legal right to build your own jet airplane and try to fly it off the side of a cliff.  With so much at risk, like your home, retirement savings, and other property, is it worth the risk to save a small amount of money on attorney’s fees and attempt to do this complex legal matter by yourself?  Don’t gamble your financial life in a way that could hurt you for years to come and possibly lose all your property. Do it right the first time with Duncan Law.

I was told if I file bankruptcy I would be able to wipe out the mortgages I have on my house and keep the house free and clear of any mortgages. Is this true?

It would be nice to file a bankruptcy and wipe out your mortgage and have a house that is bought and paid in full.  Unfortunately, bankruptcy law does not wipe out secured debts, such as mortgages on homes, unless you are willing to give back the home to the mortgage company.  In a few limited circumstances, it is possible to eliminate second and third mortgages in a Chapter 13 bankruptcy by doing what is known as a “lien stripping.”   Lien stripping is a complicated and difficult legal process too detailed to discuss on this website without knowing your individual circumstances.

Also, if you have too much equity on your home, you may lose the house in the bankruptcy. Nearly all clients do not have too much equity on their home and are able to keep their house in the bankruptcy process as long as they continue making their regular mortgage payments. See me for more details as to how much equity you can have on a home to be able to keep the home in bankruptcy.

I was told if I file a Chapter 7 bankruptcy and wipe out most of my debts, I would lose my house. Is this true?

Most people who file chapter 7 do not lose their home. If you are not behind on your house payments, most people get to keep their house if a file a chapter 7. However, if you are behind on your house payments, a chapter 7 will normally not stop the foreclosure process. To save the house in a foreclosure preceding, you would need to file a chapter 13 bankruptcy. Be aware that you must continue making your regular house payments to keep the house in a Chapter 7.

I was told that if I filed bankruptcy I would wipe out all my debts, but I would lose everything. Is that true?

Contrary to popular belief, most people who file bankruptcy do not lose anything.  They are able to keep their car, house, clothes, furniture, retirement accounts, and most other property.  We use state and federal exemption laws to protect this property.