Please explain how BK works? - Posted by nickP

Posted by nickP on October 31, 2003 at 02:08:40:

If i own several properties and I happen to file bk one day due to excessive credit card balance and etc,
will the court take the properties away from me to pay back the creditors?

Please explain how BK works? - Posted by nickP

Posted by nickP on October 31, 2003 at 24:12:05:

  1. After one maxes out all his credit cards etc
    can he file BK even if he has a steady income job?

  2. How does he actually go about filing Bk?

  3. Which of his payments must he continue to pay?
    (which ones are exempt from BK protection)?

  4. how will he get new apt to live, get a phone in his own name, get a new car, when his credit is completely trashed for the next decade after filing BK ?

please explain so that I can thoroughly understand

Re: Please explain how BK works? - Posted by kelly

Posted by kelly on October 31, 2003 at 11:46:24:

You can file bk even if you have steady income. If you have a complicated bk (lots of assets, lots of property, etc.) it is more complicated. You can do it but it takes some time and you may want to hire a lawyer. If not, you can do it yourself and the bk laws are Federal so you can access the info pretty easily.
If its simple, credit card debt for instance, you can do it yourself. Stay away from lawyers if you can. they charge several hundred to several thousand dollars and the only time you’ll need them is if THEY screw up. The forms are pretty easy and you have to fill them out with a lawyer or not.

Some of the best advice I’ve ever received about laywers. The law is about common sense. And if it isn’t, it usually will be by the time you get to court. What is fair, what is right, that kind of thing. Those that watch alot of TV may disagree but it’s usually true. And in bk, YOU decide if you wanna pay, who you wanna pay, and how much. The creditors can object but in the case of credit cards, they hardly ever do.
You will hear a lot from folks who have been scared into thinking lawyers are a must in this case so be ready. And don’t blame them, they don’t know any better.
(I know of 2 people that have done bk themselves. In BOTH cases they saved an enourmous amount not hiring a lawyer. Example: One owed the IRS. The attorney INSISTED that he needed to pay them interest on the debt he owed. He refused, payed them off and saved that interest AND attorneys fees)

And if you do hire a lawyer, remember he is your employee. He works for you. He is not in charge, you are. You tell him what you want to do (and forget about what he thinks the judge likes to see). If he doesn’t do it, fire him. As long as what you want is legal, you won’t have a problem. And you can easily find out the law without him.

In a bk you’ll do most of the work anyway. You go to the courthouse or find the forms at an office supply. Make sure you list EVERYONE you owe-no exeptions-none.
Then YOU decide how much you can pay and to whom. On credit cards, you can discharge (get rid of) all the debt if you want to. Or you can decide who you want to pay and how much you want to pay them.
As far as Chapter 13, this type of bk says that you are willing to pay your creditors, but you have to restructure your payments. It is not always a bad thing to those who understand it.
I have helped people through this so if you have any more ?, let me know.

Also, if your credit is not too screwed up (or even if it is), you’re probably premature in pursuing bk. First contact the creditors. The smart ones know that if they don’t work with you, they could get discharged or at least will be forced to take smaller payments (depending on YOUR choice) But you really should be able to work with most of them in some way. And some late payments are better than bk on your credit.
In the end, it is a simple process if you choose it but it’s not your only choice.

Re: Please explain how BK works? - Posted by Sterling

Posted by Sterling on October 31, 2003 at 02:00:58:

  1. Yes. He has to convince the judge that he is insolvent, that his
    income is insufficient to meet his debts.

  2. The best way is to hire a lawyer. Look in the yellow pages for
    attorneys, bankruptcy. Court costs and the lawyer’s fee are the
    first things paid before the BK’s assets get divided up among the

  3. Ask the lawyer. If it’s chapter 13 I think the answer is “all of
    them” but at reduced amounts.

  4. Actually, bankrupt people are a market that a few lenders are
    going after. BKs do pay higher interest rates, at least for a few
    years. Ford Motor Credit will finance BKs provided they were not
    one of the losers in the BK. Mortgages are available two years
    after discharge or earlier.

Although a BK can legally remain on a credit report for 10 years it
is common to remove it after 7 years. And for chapter 13 that’s 7
years after filing, not after discharge. Unfortunately if a credit
application asks “have you ever filed for bankruptcy” (most of
them do) the BK must forever answer “Yes”.

If the BK was triggered by an event that is unlikely to recur (such
as a lay-off), I’d recommend writing a letter to each of the credit
bureaus explaining the circumstances and ask that the letter be
included in your credit report. If possible, include documentation
such as a letter informing you that you will be laid off or a
newspaper article about the layoff.

I’d also recommend that you get a copy of CREDIT AFTER
BANKRUPTCY by Stephen Snyder and attend one of his seminars.