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FREQUENTLY ASKED BANKRUPTCY QUESTIONS AND ANSWERS
Have a bankruptcy question? Do not worry, because you are not alone. In this area we provide some of our most common bankruptcy-related questions along with the answers. While the majority of our clients are first-time bankruptcy filers, some of our clients are not. Nevertheless, with all the recent changes to Bankruptcy Law everyone may have questions. If you do not see your question here, then please contact us for further information.
What should I bring to my bankruptcy consultation appointment?
It is helpful if you bring; 1) a list of your creditors with approximate balances owed, 2) detailed information on all household income and expenses for the past 6 months, 3) information regarding any expected changes to your financial situation, and 4) a list of your own bankruptcy questions that you want to remember to ask.
What happens at the bankruptcy consultation appointment?
The attorney, David Allegrucci, will sit down with you and go over your complete financial situation at your free bankruptcy consultation appointment. Then he will tell you if he feels that a bankruptcy filing is appropriate for you at the present time. If David feels that bankruptcy is the best route for you, then he will also tell you what bankruptcy chapter he recommends and what the legal fees would be.
How much does it cost to file bankruptcy?
Since every case is different, the attorney fees for each bankruptcy case are also different. At Allegrucci Law Office most fees for bankruptcy cases are arranged as a "flat rate" fee, which means there is one projected total price that you will pay for legal fees through discharge of a chapter 7 bankruptcy case, or through confirmation of a chapter 13 bankruptcy case. The fee covers everything reasonably expected to occur during that period of time. On very rare occasion, unexpected time requirements and/or litigation may arise, which would be then discussed on an individual basis. Chapter 11 bankruptcy legal fees typically involve payment of a retainer followed by an hourly billing arrangement.
Can I make payment arrangements for bankruptcy legal fees?
We do offer limited payment arrangements for bankruptcy legal fees. Typically, the first half of the bankruptcy legal fee for your case is paid when you come to the office to turn in your completed bankruptcy worksheets and required documentation (we call this your "papers" appointment). The second half of the bankruptcy legal fee is paid when you return to the office to review and sign your prepared bankruptcy case documentation (we call this your "signing" appointment). These two appointments are normally one week apart to allow time for the preparation of your bankruptcy documentation. The time can be shorter if you need to file bankruptcy faster or longer if you need additional time before submitting the final legal fee payment.
Are the legal fees the same for chapter 7 and 13 bankruptcy?
The legal fees are somewhat lower for a chapter 7 bankruptcy filing than a chapter 13 bankruptcy filing. In chapter 13 bankruptcy, a portion of the legal fees are paid prior to the filing of the case, with the remainder paid through the chapter 13 bankruptcy plan payments. In a chapter 7 bankruptcy, all legal fees must be paid before the bankruptcy case can be filed.
What if I cannot afford to pay the bankruptcy legal fees?
Allegrucci Law Office makes every effort to keep their bankruptcy legal fees as low as possible by maintaining low overhead, and relying on a small - although dedicated and highly experienced team of professionals. As such, no additional fee reductions are available. However, when you are preparing for the filing of your bankruptcy proceeding, there are some expenses that you might be able to avoid while saving for bankruptcy legal expenses. We can assist you in reviewing your budget to locate some of these kinds of expenses. Representation by an attorney is not required for filing a bankruptcy in the state of Arizona, although it is typically recommended.
Who am I in my bankruptcy case?
When you are the person filing bankruptcy, you are known as the "Debtor" or the "Petitioner". The people or companies to whom you owe money are referred to as your "Creditors".
What is a BankruptcyTrustee?
The Bankruptcy Trustee is the person appointed by the court to evaluate your case and determine whether any assets are available for distribution to your creditors. Immediately after your case is filed, your Bankruptcy Trustee will send you a form letter requesting documentation from you. You will need to provide the initial documentation requested by your Bankruptcy Trustee in this letter prior to your creditor's meeting. Any further requests from yourBankruptcy Trustee will be answered jointly with our office.
What do I include in my bankruptcy?
When a person files bankruptcy, by law that person is required to include all their debts and all their assets in their bankruptcy filing. After the filing, you can choose to continue paying any debt you wish. You must continue to pay any secured debts for which you plan to keep the auto, home, furniture, etc. purchased with the loan.
Am I ready to file bankruptcy ?
Remember, on the day that you file your bankruptcy petition the law only allows you to exempt (protect) up to $150.00 in your bank account, and $0.00 in cash on hand. As you prepare for your filing date, you will need to make sure that you do not have extra money in your bank account. If you do have extra money in your account on your filing date, then that money will have to be paid over to the trustee for distribution to your creditors. Even checks that have not yet cleared are considered "money in the bank" by the trustees. Be careful during this time, and pay your expenses with cash or money orders - and always SAVE YOUR RECEIPTS. You will need to be prepared to document all large transactions during this time period.
Will I have to go to Court?
Most bankruptcy cases do not require an appearance before a Judge; however all bankruptcy cases require an appearance before the case trustee. This is called your Creditor's Meeting, and it will normally be held about 4 or 5 weeks after your case is filed. All Debtors must appear and prove their identity, by showing their Driver’s Licenses and Social Security cards, or the case will be dismissed. David, or another attorney, will be there with you. Typically your meeting will conclude within 30 minutes of the time it was scheduled to begin.
Do I have to take any classes?
Before your bankruptcy case can be filed, you need to take a class called “Credit counseling”. Before you can receive your bankruptcy discharge you need to take a second class called “Financial Management”.
When will I get my discharge?
In a chapter 7 proceeding, your discharge is due approximately 90 days after your creditor’s meeting. In a chapter 13 proceeding, your discharge is due after you have paid all your plan payments for 36 to 60 months.
What is a bankruptcy "DISCHARGE"?
The ultimate goal in most bankruptcy proceedings is the Court Ordered "DISCHARGE" of Debt. Once the Discharge is granted by the court, that means the Debtor is no longer legally responsible for the repayment of the discharged debt, so those creditors cannot come back after the debtor in any way for the money. Some types of debt are not dischargeable. The attorney can explain whether any of your debts might not be dischargable.
What about the liens on my real estate, vehicle, or personal property?
Bankruptcy discharges debt, however it does not eliminate the lender's lien on the collateral attached to the debt. For example, if you bought a house or a vehicle with money from a loan - and that lender put a lien on your house or vehicle, then that loan still has to be repaid as long as you want to keep your house or your vehicle. If you stop making the payments, then the lender can foreclose on the house or repossess the vehicle. After which, your bankruptcy would prevent the lender from being able to sue you for any deficiency balance. (Some exceptions to this rule do apply, such as scraping-off a second mortgage through chapter 13.) The attorney can discuss any exceptions with you.
What does it mean if my bankruptcy case is "DISMISSED"?
If your bankruptcy case gets "DISMISSED" then you immediately owe all your creditors again. Your creditors would be free to resume collection activity against you immediately - just as if you had never filed bankruptcy. The most common reasons for dismissal include the failure to provide all required documentation, and failure to pay all chapter 13 plan payments.
The information contained on this web site is intended for general purposes only and is not to be taken as advice on specific legal matters. If you need our assistance please feel free to schedule an appointment to meet with us.
For your convenience, we have offices in:
GLENDALE BUCKEYE MESA
Allegrucci Law Office, PLLC