Bankruptcy
Are you paying one credit card bill with another credit card? Do you avoid opening your bills? Do you have excessive late or over the limit fees? If so, don't get burned out with your credit and debt situation. Get assistance from the Bankruptcy Attorneys at Massey & Associates, P.C. We can help you get back on track and relieve your debt so you can start fresh.
We handle bankruptcy cases for people all over Southeast Tennessee, North Georgia, and Northwest Alabama.
We take pains to make sure that our clients’ needs are served promptly and effectively in all areas, with a special emphasis on rapidity in bankruptcy. Whenever our clients call with a problem, they can rest assured that their problems will be addressed quickly.
We are a debt relief agency. We help people seek relief under the United States Bankruptcy Code.
New Bankruptcy Law - 2005 Bankruptcy Act
The 2005 Bankruptcy Act requires all individuals to go through credit counseling with a government-approved organization six (6) months prior to filing for bankruptcy and to complete a financial management instructional course after filing bankruptcy.
Credit counseling organizations help individuals work their way out of debt and provide education to help them avoid incurring debts. The attorneys at Massey & Associates, P.C. can help take care of the paperwork and find a credit and debt counseling service that will best suit your credit and debt needs.
The Bankruptcy Process
We handle hundreds of bankruptcy cases every year including Chapter 7 Liquidation and Chapter 13 repayment plans. Our clients trust us for financial advice and we guide them through every step of the process, making sure they are well-informed and comfortable with every decision.
Chapter 7 Cases
In Chapter 7 Liquidation cases, our fees normally range from $750 to $1,500. The greater the number of creditors, the number of secured creditors, the number of reaffirmation agreements required, the number of collection lawsuits filed against the client already and the urgency of preparing the case are all factors used to determine the amount of the fee for a particular case. Additional fees will also be charged for special examinations required by creditors, adversarial proceedings, or other unusual aspects of handling a case. However, we can usually predict the possibility of such things happening so you will be able to evaluate any such risks prior to filing.
Chapter 13 Cases
In Chapter 13 cases, attorney fees must be approved by a judge. Normally, our fees range from $1,000 to $1,600. However, most if not all of these fees are included in the client’s Chapter 13 periodic payment to the trustee who then pays the attorney fee to us. As such, most of our clients are not required to make a large payment to us prior to filing their case and obtaining relief from the bankruptcy court in Chapter 13 cases. Like Chapter 7, additional fees will be required if unusual tasks are required, but these fees also must be approved and are usually paid through the regular periodic payment.
Understanding Bankruptcy – FAQ
Does Filing Bankruptcy Make Me a Bad Person?
Everyone is entitled to a fresh start. Many times, events occur in people's lives that cannot be expected. You may have had a sudden loss in income, a family medical catastrophe, a work injury, or any one of numerous other difficulties that would have been almost impossible for which to plan. Most of the people that we represent are good people who have encountered unfortunate circumstances and just want to get a fresh start. We understand that for most of our clients bankruptcy is the last resort. Many of our clients have a very difficult time determining if bankruptcy is the right decision for them.
You must ask yourself some important questions. Are the Credit card companies concerned about your financial difficulties? Are you paying your creditors instead of saving for your children's education or your retirement? When is the last time you took a vacation?
The above questions can only be answered by you. If you are thinking about bankruptcy, then you can only correctly answer these questions after consulting with an experienced and helpful legal professional who understands the options available to you and the consequences thereof. We believe that it is very important for an attorney to provide both bankruptcy and non bankruptcy alternatives. We believe in giving you our honest opinion as to what will put you in the best possible financial condition now and in your future. Our clients always come first.
What is Chapter 7?
Chapter 7 bankruptcy is sometimes called Liquidation or “Straight Bankruptcy”. The idea is that a trustee takes possession of all your non-exempt assets and sells them, using the proceeds to pay all or part of your debts.
The first key to a successful Chapter 7 is exempt property. Exempt property is a dollar amount of property that you are allowed to keep and the trustee is not allowed to sell. Because of exempt property, most of our clients do not lose any of their property in a Chapter 7 to the trustee. Some of our clients voluntarily surrender property such as cars, boats, furniture or jewelry to secured creditors because they do not want to pay the debt on those items, but this is a choice the client makes with our analysis and advice.
The benefit to Chapter 7 is the discharge. This is the same benefit of other types of bankruptcy as well. The discharge is a court order that prevents creditors from ever trying to collect your old debts from you again. In short, the discharge makes the debts invalid and gives our client the right to never pay those debts.
What is Chapter 13?
Chapter 13 bankruptcy is a repayment plan with the power of the bankruptcy court. Sometimes called the “federal repayment plan” or “wage earner’s plan,” Chapter 13 allows our clients to repay all or maybe just a portion of their debt over a period of three to five years.
We often file Chapter 13 to prevent clients from losing their homes to foreclosure, losing cars or other property to repossession, or to pay off unsecured debt while not endangering equity in a home or other large asset.
Chapter 13 cases depend on a regular payment from the client to the trustee. Most of the time, the trustee requires people with jobs who are not self-employed to submit a wage order. This allows the payment to be deducted directly from your paycheck and sent to the trustee. The trustee then uses the money to make all the payments on your debt including house payments, car payments, and unsecured debts as well as attorney fees and court costs. The major benefit is that this payment to the trustee is almost always much lower than the payments you had been required to make prior to filing Chapter 13.
If a client does not have a house payment, we are often able to take the client’s car payment and use it for a Chapter 13 payment to pay not only the car, but also every other debt of the client. Also, we are able to tell you, the client, what the payment will be prior to filing your case so you can make the most informed decision.
Can I Keep My House and My Car?
Most of our clients are able to keep their house and car. Of course, we give people advice as to the effects of retaining or surrendering such property and allow them to choose. Many times, after understanding their financial situation, people choose to surrender property to avoid continuing in an unwise agreement in favor of making a true fresh start.
Can My Creditors Stop My Bankruptcy?
Bankruptcy laws are very favorable to Debtors – people who owe money and seek bankruptcy protection. Creditors can not prevent you from obtaining a discharge in Chapter 7 except in very limited circumstances. If you obtained money through fraud or knowing that you intended to file bankruptcy when you incurred new debt, your discharge will likely not apply to that debt. Certain types of debts can not be discharged in bankruptcy including criminal fines, certain taxes, child support, divorce property settlements, governmentally insured student loans, and others.
In Chapter 13 cases, if your plan of repayment is confirmed by the court and you comply with the plan, creditors have practically no recourse to prevent your discharge in most cases. We formulate the plan for you and explain it to you before we ever file you case with the court. Therefore, you will know exactly what you are doing and can have confidence in your chances of discharge.
For normal debt like past due rent or utility bills, credit cards, medical bills, bank loans, etc., creditors have very little ground on which to prevent your bankruptcy from being successful. With us on your side, your likelihood of success is very high indeed.
What If I Have Filed Bankruptcy in the Past?
Traditionally, a debtor who received a discharge in Chapter 7 could not file another Chapter 7 for six years from the date of filing the previous case. In changes that take place in October 2005, debtors will not be able to refile for eight years. Additionally, if cases are dismissed without discharge (usually chapter 13 cases), the automatic stay will not necessarily provide the same protections in new cases filed within one year of dismissals.
How Long Does Bankruptcy Stay on My Credit?
Although bankruptcy may legally be reported to your credit report for up to 10 years, you can begin to reestablish your credit immediately. Remember that "credit" is your ability to borrow money. Lenders consider many factors while determining whether to loan you money, but most importantly, they consider your debt-to-income ratio.
Bankruptcy eliminates most, if not all of your debts, therefore reducing your debt‑to‑income ratio, potentially improving your ability to borrow money in the future. Some financial institutions actively solicit business from people who have filed bankruptcy. Lenders are in business to make money by lending you money and charging you interest. Lenders know that once you have filed bankruptcy, you will not be able to file again for 8 years.
Many of our clients have purchased cars immediately upon receiving their discharge orders. Many lenders have programs that provide for post-bankruptcy debtors to obtain home financing within a year or two after a bankruptcy discharge. Many of our clients even receive solicitations for unsecured credit cards almost immediately upon receiving their bankruptcy discharge.
What Effect Does Bankruptcy Have on My Credit?
Bankruptcy is bad for your credit. Chapter 7 discharges usually result in many “charge-offs” or similar marks being added to your credit. However, if your credit is already low, bankruptcy does not necessarily make it worse. Many of our clients are offered credit immediately after filing Chapter 7, which we advise that they not take.
Chapter 13 usually results in “slow-pays” or similar marks being added to your credit and may result in some charge-offs if you do not pay all unsecured debt. Chapter 13 is usually no worse for your credit than a credit counseling or debt consolidation plan.
Will I Ever Be Able to Buy a House?
Bankruptcy will not prevent you from obtaining credit to purchase a house. After filing Chapter 7, most of our clients undertake a process to rebuild their credit over a period of several months and years. Many of them are able to obtain financing for a house within two to three years but other factors such as income and recent credit history are vitally important. As stated above, our clients are often offered credit immediately after filing bankruptcy.
In Chapter 13 cases, our clients often already have a house. In many cases, after establishing a good payment history and building some equity in their homes, our clients are able to refinance their houses and buy themselves out of Chapter 13 altogether.
Should I File Bankruptcy?
If you are being sued, and you own a home, we strongly urge you to speak with us immediately about filing a bankruptcy. A bankruptcy will stop a lawsuit immediately and prevent your creditors from placing a lien on your home or garnishing your hard-earned wages.
Is your home being foreclosed or is your car about to be repossessed? If it is, very often bankruptcy may prevent the foreclosure action or repossession from proceeding and allow you to consolidate your mortgage arrears or automobile balance and make payments on those debts over time through a payment plan designed by us with your help. If your house is being foreclosed or your car is about to be repossessed, Chapter 7 may not be an option. Chapter 13 may save your house and your car.
Do credit cards or medical bills have you so deep in debt that it is hard for you to save for the future? If you are only paying the minimum payment on the credit card bills from month to month then bankruptcy may be the only way you'll ever get on the road to financial prosperity. You do not have to remain in such circumstances for the rest of your life.
If you or someone you love have credit and debt concerns or has questions about bankruptcy, contact the Bankruptcy Attorneys at Massey & Associates, P.C. at (423) 697-4529 for a FREE Consultation.