I am behind in my mortgage and there is a foreclosure action pending.

You may file a Chapter 13 bankruptcy and pay back your mortgage arrears through a Chapter 13 plan over a period of up to five years. This may be the only way to stop a foreclosure sale and pay back your mortgage arrears. You must have sufficient income to make your monthly mortgage payments and Chapter 13 plan payments at the same time.

I am married. Should both I and my spouse file for bankruptcy?

That depends on how much debt each spouse has. If most of the debts are in both your names, it usually does not make sense for only one spouse to file, leaving the other one still responsible to pay the debts. However, if one spouse has significantly more debt than the other, you should consider having only one spouse file for bankruptcy. Whether both spouses should file will also depend on the assets that each one owns.

What is the automatic stay?

When a debtor files for bankruptcy, all efforts on the part of creditors to collect debts must stop. This includes, for example, phone calls, collection letters, lawsuits, wage garnishments and  bank account restraining notices. A creditor wanting to continue with a lawsuit, repossession or other activity, must bring a motion in Bankruptcy Court to have the automatic stay lifted. There are, however, many exceptions to the automatic stay and, consequently, not all actions against a debtor are stayed.

Who is the bankruptcy trustee?

When a bankruptcy petition is filed, the court appoints a trustee to oversee the case. The trustees are bankruptcy attorneys who are assigned cases on a rotating basis. The main function of the trustee in a Chapter 7 case is to find assets with which to pay the debtor’s creditors. The debtor is required to attend a meeting with the trustee at which the trustee will ask the debtor questions concerning the debtor’s assets, use of credit cards, property transfers, income and expenses.

Do I need an attorney to file for bankruptcy?

The process of filing for bankruptcy can be confusing and difficult to do on your own. Filing for bankruptcy without the advice of an attorney can lead to the loss of your property or to the inability to discharge certain debts, such as tax debts. An attorney can provide the necessary advice and guidance to help decide whether you should file for bankruptcy and when you should file. An attorney will also ensure that your bankruptcy petition is prepared correctly and will appear with you when you meet with the bankruptcy trustee.

What about bankruptcy petition preparers?

These services are not permitted to provide legal advice. They merely prepare the petition based on the information that you supply them. You will also appear at the meeting with the trustee by yourself. The extra money that an attorney will cost you is well worth it.

Do I need to go for credit counseling?

Yes, the new bankruptcy law requires all debtors to receive a credit counseling briefing within the 180 days prior to filing for bankruptcy. In addition, after filing, you must complete a course in personal financial management in order to be eligible for a discharge. The counseling and financial management course can be done over the telephone or internet.

How do I get started?

Call my office. I will speak with you personally to get an idea of whether bankruptcy may be right for you. If so, we will schedule an appointment to discuss your situation further. There is no charge for the office consultation.