Q: Will creditors still be able to call me or threaten me?
A: No. The instant you file a Bankruptcy Petition there is an automatic stop to all creditor collection activity. This means that they are not allowed to call you, are not allowed to repossess your car, and are not allowed to have a Sheriff or Constable Sale to collect a judgment. Even the I.R.S. has to stop while you are in bankruptcy .

If, for example, a mortgage company or car loan company wants to foreclose or repossess, they can only do so after going to court and getting permission from the Bankruptcy Court. We have some clients who tried to work things out with their creditors, but came to us instead in order to stop the harassing phone calls once and for all.

Q: Will I lose any of my personal belongings in a Chapter 7 “Fresh Start” bankruptcy?
A: Probably not. If you bought something on credit, such as a mortgage on your home, a car, or jewelry, the creditor is entitled to repossess the collateral if you don’t want to pay for it (but not always). If you are either current or can get current on your mortgage or other loan, you can “reaffirm” the debt and can keep the house, car, or jewelry. Otherwise, your legal exemptions allow 97% of people in bankruptcy to keep all of their possessions. Even if you put up your possessions as collateral for a new loan, the creditor’s lien can be removed, and you can keep all of your stuff. Judgment liens can also be removed by bankruptcy. You will also be able to keep any pension you may have under any circumstances.

Q: My vehicle was just repossessed. Can I get it back?
A: Yes, but. You have to file for bankruptcy immediately. You will still have to pay for the vehicle, if you want to keep it. If you file a Chapter 7 Bankruptcy, you will have to get caught up within 30 days. If you want to keep the vehicle but can’t get caught up within 30 days, and if to you the vehicle is worth the additional legal fees, you can get caught up over a three to five year period in a Chapter 13. We will explain your options with you and help you decide what is best for you.

Q: I still owe on a vehicle that was repossessed. Will bankruptcy help me?
A: Yes. The key difference in bankruptcy is between debts that have collateral and debts that don’t have collateral. After the lender repossesses a vehicle, you no longer have their collateral.The amount you still owe is no different than credit card or other debt without any collateral. Bankruptcy will make it go away forever.

Q: I don’t have any credit card debt, but I owe doctor and hospital bills. Will bankruptcy help me?
A: Yes. Debts for medical bills are no different than credit card or other debt without any collateral.

Q: I lost my driver's license because I didn’t pay a judgment. Will bankruptcy help me?
A: Probably. Unless the judgment was for an accident while Driving Under the Influence, judgments for motor vehicle accidents are no different than credit card or other debt without any collateral.

Q: I like my doctor (or dentist, mother, brother, or friend). Can I still pay them even though I filed bankruptcy?
A: Yes. Although you will no legal obligation to pay your doctor (or loans from relatives or friends), you can pay them if you want to. It’s up to you.

Q: I have tried to negotiate with my credit cards, and I would like to pay them something, but they just aren’t reasonable. Will bankruptcy help me?
A: Yes. If you have a good job and make more than the average income for a household of your size, you may not qualify for a Chapter 7, but will instead be able to do a Chapter 13 “Debt Repayment Plan” Bankruptcy. Chapter 13 Debt Repayment Plans are explained in more detail in later Questions and Answers, but basically you pay only as much as you can afford to pay, and the credit card companies have very little to say about it. And if you qualify for a Chapter 7 Bankruptcy, you will not have to pay the credit cards anything.


Q: I have been paying a credit card “negotiating” company. Is bankruptcy better?
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?
A: No.

Q: How much will this cost?
A: A Chapter 7 “Fresh Start” costs $1,630 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 $4,500, $1,500 up front, with an additional $3,000 being paid out of your monthly payments into the plan (you do not pay the $3,000 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!