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FAQs

Chapter 7

Pay Upfront $500 Down $0 Down
$799 Attorney Fee + $338 Court Fee = $1,137 $500 Down,
$99/mo x 12 mos. Includes court fee
$0 Down,
$159/mo x 12 mos. Includes court fee

$0 Down requires direct deposit and > $2,000/mo income.
Over median income +$200.
Rebuttal to presumption of abuse +$200.

Chapter 13

Retain Upfront $0 Down**
$799 Retainer* + $313 Court Fee = $1,212 $0 down w/ voluntary wage withholding for trustee payments

Chapter 11

Retain Upfront
$5,000 Retainer* + $1,738 Court Fee = $6,738

* Includes an initial retainer only, not the total fee. Additional hourly attorney fees may be billed through your trustee or bankruptcy payment plan if approved by the court.

** Not available if refiling within 1 yr of prior open case or in event of vehicle recovery.

Yes. We can file your bankruptcy case with $0 down. You will enter into an agreement where you will pay the attorney fees over the course of 12 months. For a basic chapter 7, the repayment plan will be $161 per month. If your income is over the median, the monthly payment will be $159 per month.

Yes.

Yes. You can pay off your balance early for a 10% discount off of your remaining balance.

For every single one of our clients, before we file the bankruptcy, we run a credit score simulation which shows what your score is now, and what it will be 12 months after the bankruptcy. When you hire us, we will do this for you too. This way, you will know exactly what kind of impact the bankruptcy will have on your credit worthiness. Surprisingly, the 12 months post bankruptcy credit score improves 81 points on average based on our own internal data. So in most cases, bankruptcy actually improves your credit score 12 months after filing. This is because 30% of your credit score is determined by your debt to available credit ratio. This ratio is always improved when you file bankruptcy. There are certainly cases where the bankruptcy tends to lower your credit score as well; in general, the lower your score is before the bankruptcy, the more bankruptcy will improve your 12-month post bankruptcy score. The reverse is also true, the higher your credit score before bankruptcy, the more likely the bankruptcy is to lower your credit score 12 months after bankruptcy.

In general, you must wait 2 years after bankruptcy in order to obtain a mortgage loan. Generally speaking, there are 4 types of mortgage loans available (FHA, Conventional, VA, and USDA). Each type of mortgage has slightly different guidelines for waiting period after bankruptcy. Here are the mortgage loan types along with the guideline for waiting period:

Loan Type Chapter 7 Chapter 13
Conventional 4 Years 2 Years form discharge date, 4 Years from discharge date
FHA 2 Years 1 Year
USDA 3 Years 1 Year
VA 2 Years 1 Year

At this time, credit reporting agencies report a Chapter 7 bankruptcy for up to 10 years and a Chapter 13 for up to 7 years; however, most people who file a bankruptcy are able to build their credit enough within two years to be able to finance and purchase a home, and cars can be financed much sooner after a bankruptcy is filed.

Nevada Census Median Income Effective 05/15/2021

Period 1 Person 2 People 3 People 4 People 5 People 6 People 7 People 8 People Add’l
Year $54,394 $69,804 $77,536 $84,764 $93,764 $102,764 $111,764 $120,764 $9,000

Utah Census Median Income Effective 05/15/2021

Period 1 Person 2 People 3 People 4 People 5 People 6 People 7 People 8 People Add’l
Year $67,265 $73,754 $86,562 $96,607 $105,607 $114,607 $123,607 $132,607 $9,000

As a rule of thumb, if your gross income is less than the median income for your household size, then you are automatically eligible for chapter 7. If your income exceeds the median income, then your only option may be to file a chapter 13 where you are required to repay some or all of your debt in a plan of reorganization.

Chapter 7

PROS
You pay back none of your debt.
The case is generally completed within 3-4 months.
Generally, it is the least costly in terms of attorney fees.
CONS
If you have unprotected assets, you may lose it.
Will show on your credit report for 10 years (as opposed to 7 yrs for chapter 13).
Under mortgage lending guidelines, you must generally wait 2 years to get a mortgage.
If you make too much money, the court will not allow you to complete a chapter 7 which leaves with chapter 13 as your only option.

Chapter 13

PROS
In most cases, you are not required to repay 100% of your debt and in some cases your repayment could be as low as 1%.
At any point during chapter 13 if your income goes down you can usually lower your chapter 13 plan payments and if you become eligible for a chapter 7, then you can convert the case to a chapter 7 at any time.
The effect of discharge is a bit stronger, meaning that some types of debts that are not dischargeable in a chapter 7 are dischargeable in a chapter 13. E.g., municipal fines or debts to a former spouse.
You can keep even unprotected assets because you are paying your creditors at least as much as those assets are worth in your chapter 13 bankruptcy plan.
The bankruptcy is on your credit record for a shorter period of time (7 yrs) as compared to a chapter 7 (10 yrs).
Mortgage lending guidelines only require 1 yr waiting period to get a mortgage after your payments begin (as opposed to 2 yrs for a chapter 7).
If you are at risk of foreclosure, a chapter 13 bankruptcy will stop foreclosure permanently so long as you make your chapter 13 plan payments.
Chapter 13 offers the option of a mortgage mediation program which we have used effectively to obtain mortgage modifications to lower mortgage payments.
Chapter 13 allows you to do some things that are not possible in a chapter 7.
Remove second mortgage liens
Rewrite the terms of a car loan (aka “cram down”) to lower the interest rate, lower the principal amount, and reamortize payments for a longer period of time in order to reduce the monthly payment amount.
“Cram down” as described above, is also a tool to remove federal tax liens and even lower mortgage obligations in some rare circumstances.
CONS
Chapter 13 typically costs more in attorney fees. Typically $5,000 are paid over the life of the bankruptcy payment plan in monthly payments.
What you can afford to repay on paper may not match up with what you can afford to repay in real life. In some cases, the court will want you to repay more of the debt than you feel you can afford and if you aren’t able to make your monthly payments the court will dismiss your case.

Essentially all consumer bankruptcy cases filed in the United States are filed under one of two “Chapters” of bankruptcy–Chapter 7 or 13.

Internally, 80% of our cases are chapter 7. A Chapter 7 is almost always the shortest, simplest, and least expensive type of bankruptcy that will eliminate debts through what is called a discharge. It typically takes three to four months, does not require monthly payments, and the attorney fees are usually much less than any other type of bankruptcy. On the other hand, property that has value and is not exempted must be turned over to a trustee, who sells it to pay your creditors. Many people are able to complete a Chapter 7 without turning over any such asset, but an attorney can advise you on whether this is likely for you. This is the type of bankruptcy that most people think of when they consider bankruptcy.

Internally, 19% of our cases are chapter 13. A Chapter 13 will usually last between three and five years and involves making payments to a trustee on a monthly basis, so regular income is required. You typically get to keep all of your property without being concerned that the trustee will take it. Because of the length and increased complexity of the case, the cost of the bankruptcy itself is greater than a Chapter 7, both in attorney fees and in trustee fees, but these fees are usually paid through the monthly payments. Some people file a Chapter 13 because they filed a Chapter 7 that resulted in a discharge within less than eight years. A Chapter 13 also results in a discharge upon completion of the plan payments, and often a person who files a chapter 13 pays less than what they owe.

There is no minimum or maximum amount of income to file a bankruptcy, but what matters greatly is the amount of disposable income that remains after expenses that are reasonable and necessary for the support of you and your family, which will affect which Chapter of bankruptcy you should file. If you have disposable income, you will likely be required to file a Chapter 13 or 11, but if you do not, you may qualify for a Chapter 7 bankruptcy. In a Chapter 7 or 13 bankruptcy, you will usually be required to prepare and file a form referred to as the “Means Test” that helps determine what your disposable income is. Because the correct preparation of this document requires skill and experience, we recommend that you contact an attorney to determine which Chapter of bankruptcy is best for you.

There is no minimum amount of debt required in order to file bankruptcy. The decision to file is usually based upon whether a person qualifies for a given chapter of bankruptcy and whether they want to. In determining whether a person wants to, important factors include the level of stress felt under the burden of the debts, whether they can afford necessities and pay debts, the likelihood that the person can pay off or settle their debts in the not-too-distant future, their debt to income ratio, and many other reasons. An attorney can help you consider these factors and offer advice.

In a word, no. There is no bankruptcy rule that requires married individuals to file a bankruptcy case with their spouse. In fact, it is quite common to see married couples maintain separate finances to the point where one spouse is in need of bankruptcy relief, while the other spouse would be just fine not declaring bankruptcy. One important note, however, is that while the filing spouse’s bankruptcy will generally not affect the non-filing spouse’s credit or liability for debts in only their name, the non-filing spouse’s income and assets could affect the filing spouse’s experience in a bankruptcy case in community property states like Nevada. Be sure to discuss this matter with a bankruptcy attorney if you are a married individual considering filing bankruptcy.

It depends on the lender and your credit history prior to the bankruptcy, but there are auto dealers and lenders who advertise to and offer loans to individuals during a bankruptcy; however, the interest rates are usually above average. In a Chapter 7 case, there is no need to get your attorney or the court’s approval, but in a Chapter 13 case, approval must be obtained through the court, with which your attorney can help you. There are more dealers and lenders who will work with individuals as soon as the bankruptcy is closed.

A car is an asset of the bankruptcy estate (all of debtors assets are). So, generally yes. However, in Nevada’s confirmed chapter 13 the plan language says “Debtor is prohibited from . . . selling . . . any nonexempt personal property worth over $1,000.” This implies (but doesn’t state outrightly) that selling exempt property doesn’t require court approval in chapter 13. This is typically not an issue in a Chapter 7, since the case is typically completed in three to four months.

No approval is necessary.

Generally speaking, chapter 7 is more effective than a chapter 13. In chapter 7, you don’t pay back any debt, the case is wrapped more quickly (generally within 3 months), and it costs less money. In some cases people file chapter 13 only because they don’t qualify for chapter 7. . . . .

It is a course or class that provides an analysis of the client’s current financial situation, a discussion of the factors that contributed to the client’s specific financial situation, and a plan to address the client’s financial situation without incurring negative amortization of debt. It can be completed by phone or the internet but the client must engage in live interaction with a counselor following the Internet or automated telephone portion of the counseling.

All individuals who file bankruptcy must complete this course and obtain a certificate of completion that is filed after they file bankruptcy.

Yes, but there may be pitfalls that you will not realize until it is too late. Someone who represents themselves in a legal matter is considered “pro se” (pronounced “pro say”). There are pro se debtors who successfully obtain a discharge, but we have observed that pro se filers obtain a discharge at a much lower rate than those who are represented by an attorney, they often end up paying more in the loss of assets for failure to do exemption application and planning, and they often discharge less due to the timing of the bankruptcy-recent debts and some tax debts can be tricky to deal with. Sometimes creditors bully pro se debtors because they recognize that such debtors do not know the law. A person who is a “petition preparer” can fill in blanks in a petition for you but cannot give you any legal advice, so they will not help you avoid the above pitfalls or guide you through the process like an attorney will. Even the United States Trustee, who is the government department that oversees our nations bankruptcy program, states on their website that “a bankruptcy filing may raise complex legal issues, so it is often advisable to consult with an attorney.”

Contrary to what Michael Scott though in the TV series The Office, saying “I declare bankruptcyyyyy!”, but Creed Bratton did make a good point that “Bankruptcy, Michael is natures do-over, it’s a fresh start, it’s a clean slate.” In fact, to “declare” bankruptcy is used in reference to the act of filing a bankruptcy petition with the correct bankruptcy court, which commences a bankruptcy case. The word does not have any other special meaning in bankruptcy and is not used in the bankruptcy code or rules.

Typically, if the lease was signed before the bankruptcy was filed, then yes, but the landlord should be listed in the proper schedule as a creditor and the correct intent should be indicated, which your attorney can do for you.

It depends how far along the road that the eviction process went prior to filing the bankruptcy case. The most common scenarios in Nevada are the following (skip to bottom for the quick answer):

1. The landlord obtained a judgment for lockout before the case was filed. This is the final order given to the constable to change the locks, often called the 24-Lockout Order. It is at least 1 week after the Notice to Quit. If this has been issued by the court before we file, NO AUTOMATIC STAY goes into effect upon filing of the bankruptcy. Its possible to get 30 days of stay, if you file a specific form with the petition, and Debtor(s) pays whatever rent payment would have been due to the bankruptcy court clerk during those first 30 days of the case.

The bankruptcy case is filed BEFORE there is an eviction order in place. The landlord must file a motion for relief from stay or wait 60 days until the stay expires. A lease that is not assumed is automatically deemed rejected, and accordingly, the stay is terminated by operation of law.

So in sum, either no stay at all goes into place if there was a lock out order before we filed, or the stay will most likely terminate upon a successful motion by the creditor, or after 60 days (whichever comes first).

Yes and no. A bankruptcy can discharge civil liability for a bad check if the circumstances arose before the bankruptcy. The creditor should be listed in the correct bankruptcy document, but the creditor could object to the discharge through an adversary proceeding based upon fraud. If the creditor is properly noticed and does not object by the deadline (60 days after the first scheduled 341 hearing), the civil liability will be discharged. On the other hand, bad checks can be a crime, and bankruptcy does not discharge criminal liability.

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