A: Yes. First of all, the credit card “negotiating” company wants your money. They probably discouraged you from filing bankruptcy because they are not real lawyers, and can’t charge you to file for bankruptcy protection. While we expect to be paid for our work on your behalf, unless there are major problems with your case, we charge a fixed amount which is almost for sure less than what the “negotiating” companies charge.
Secondly, don’t let anyone tell you not to file bankruptcy. There is nothing immoral about bankruptcy. Bankruptcy comes from the Bible. In Deuteronomy there is a thing called the “Jubilee Year”. According to the Bible, after seven years, debts must be forgiven. So if it comes from the Bible, how can bankruptcy be bad? If you qualify for a Chapter 7 “fresh start” bankruptcy, you will not have to pay the credit cards anything. Why would you pay more? If you do not qualify for a Chapter 7, you will still be able to do a Chapter 13 “Debt Repayment Plan” Bankruptcy. The difference between using a credit card “negotiating” company and hiring a real lawyer to do a Debt Repayment Plan is that when you file a Chapter 13 Plan, you don’t negotiate with your creditors — you tell your creditors: “This is all you get,” and there is nothing they can do about it. Plus, you are guaranteed a zero percent interest rate.
Thirdly, it is a total myth that bankruptcy is a terrible thing to do. We have filed over 4,000 bankruptcies. In my entire career, not once, not a single time, has someone come up to me in the store, or called me on the phone, and said, “Dai, I am so sorry I filed bankruptcy. What a mistake that was.”
Finally, the credit card “negotiating” companies can request that the creditors not call you or sue you, but they can’t stop them. We have had lots of clients who paid thousands of dollars to a credit card “negotiating” company, and then got sued anyway. If you file bankruptcy, all creditor actions, including phone calls and law suits, stop dead.
Q: I am not current on my mortgage, but I still want to keep my house. Is there a way to do this?
A: Yes. If:
• You have regular income,
• You could stay current on your mortgage if the payments on your other debts were lowered, and,
• You would be able to pay off the past due amount on your mortgage if you could just spread it over three to five years, then you may qualify for court protection from your creditors under a Chapter 13 Debt Repayment Plan. Chapter 13 gives people with regular income the opportunity to work things out with their creditors. During the three to five year period they are repaying their debts they have the protection of the Federal Courts against Sheriff Sales, repossessions, and lawsuits. Monthly payments are determined by the amount you can afford to pay after paying necessary living expenses. (For example, if your take-home pay is $1,300 a month and your necessary living expenses are $1,000 a month, you would pay $300 a month for at least 36 and up to 60 months, which will pay for all your debts that don’t have collateral.)
Q: Do I have to pay all my creditors under a Chapter 13 Plan, such as credit cards?
A: Probably not. Under a Chapter 13 plan you must pay 100% of your mortgage, including past-due amounts. Usually, but not always, you must pay 100% of your loans with collateral, such as vehicle loans or second mortgages/home equity loans. Your other debts depend on your ability to pay. If you can afford to pay 100% over the three to five years, then you have to pay 100% (only without any interest). But if you can only afford to pay a smaller percentage, then you pay the smaller percentage. If you can not afford to pay anything on your debts that have no collateral, then you don’t have to. Even some back taxes can be lowered in this way.
Q: What if some months I would have no money left over after I pay my necessary living expenses — can I still save my home with a Debt Repayment Plan?
Q: How much will this cost?
A: A Chapter 7 “Fresh Start” costs $1,601 total up front. People who have had a business, or whose bankruptcy case ends up with major problems may have additional fees, but we always discuss them with you first. A Chapter 13 Debt Repayment Plan costs $3,981, $1,281 up front, with an additional $2,700 being paid out of your monthly payments into the plan (you do not pay the $2,700 directly to us). All prices include the Bankruptcy Court’s filing fee. Please call Patty at (724) 287-5300 to see if you qualify for a Chapter 7 “Fresh Start”, or to see if a Chapter 13 Debt Repayment Plan makes sense for you.
If you live in the Allegheny, Armstrong, Beaver, Butler, Clarion, Lawrence, Mercer, or Venango Counties of Pennsylvania, please call today. If you wait too long, it could be too late to stop a repossession or Sheriff Sale, so don’t delay. Act now!