What kind of question will a bankruptcy lawyer ask me in my first consultation?

What will an attorney ask me about my financial condition in my first meeting?

I always tell prospective clients to be prepared to answer some questions like this:

• What kind of debts do you owe?
• Are you able to pay the minimum payments on your bills?
• Do you find yourself spending more money than you make?
• Are creditors constantly calling you? Are your wages being garnished?

I know people don’t like talking about their debt and finances to other people. You will want to be comfortable with the person you are talking to. If you are facing significant debt and you want to do something about it, exploring bankruptcy is one of many options you can consider.

If you have concerns about bankruptcy or your other options, you should not hesitate to consult with an experienced bankruptcy attorney. Most offer free initial consultations. In Utah call us at 801-221-9911 to set up a consultation today.

Can I file for bankruptcy in Utah if I don’t have a job?

One of the most common reasons for filing for bankruptcy is when someone has lost of a job. The answer then is YES you can definitely file for bankruptcy if you don’t have a job but whether or not the bankruptcy will be successful will depend on which type of bankruptcy you file for.

Chapter 7 Bankruptcy
When you file for chapter 7 bankruptcy while you are unemployed, it makes everything easier. Chapter 7 is designed to completely wipe put things like credit card debt or debt from medical bills. These are called unsecured debts and Chapter 7 completely discharges them. If you don’t have any non-exempt property that can be sold to repay your debt then your creditors do not get anything.
Since Chapter 7 completely wipes out your debts, it is what most people want to file for. To prevent people from abusing this type of bankruptcy, you have to pass a means test to qualify. The means test will determine whether your household income is above or below your state’s median income for other households of your size.
If your income falls below the median income then you are automatically eligible for Chapter 7 bankruptcy. If you are unemployed then you probably have little to no income so you should be able to easily qualify for Chapter 7.

Chapter 13 Bankruptcy

If you file for Chapter 13 bankruptcy then you will be paying back most of your debts through a three to five year repayment plan. It is a good way to:
-Catch up on mortgage payments
–Get rid of a second mortgage
-Cram down car loans
-Pay back non dischargeable debts

It can be difficult to handle the monthly payments required for a Chapter 13 bankruptcy if you are unemployed but you may still qualify for one depending on your circumstances and sources of income.

If you are in Utah and you have questions about which type of bankruptcy is right for you call us for a free in office consultation.

Do I have any rights against a debt collector?

Most creditors start debt collection efforts with a series of form letters, then they move onto phone calls, and then either a repossession occurs or the debt is referred to a collection agency or an attorney for suit.

Most parties that collect debt on behalf of an original creditor are restricted by the Fair Debt Collection Act.

According to the Act these are some of the restrictions on debt collectors:

-A debt collector cannot communicate with a consumer at the place of employment, if he has reason to know that the employer prohibits such communication.

-A debt collector cannot contact other people, except for closely regulated efforts to locate a consumer, (but then may still not state that the consumer owes money).

-A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with collection of a debt.

-A debt collector cannot use or threaten to use violence on a person, reputation, or property of the person.

-A debt collector cannot use obscene or profane language.
-If a consumer notifies the debt collector that the consumer refuses to pay a debt, or that the consumer wishes the debt collector to cease further communication with him, then it is illegal to communicate with the consumer.

-A debt collector cannot cause the phone to ring repeatedly, or engaging any person in a telephone conversation, with the intent to annoy, abuse, or harass any person at the called number.

-A debt collector must disclose his identity, if requested.

-A debt collector may not falsely represent the character, amount or legal status of any debt.

-A debt collector may not imply that nonpayment will result in arrest, garnishment, seizure of property if such action is unlawful or unintended. In other words, a debtor collector cannot threaten to take any action that cannot be legally taken or that is not intended to be taken.

-A debt collector cannot falsely represent or imply that the consumer committed any crime or other conduct in order to disgrace the consumer.

-A debt collector may not threaten to communicate false credit information.

-A debt collector must disclose that a communication is to collect a debt, and that the information received will be used for debt collection, and that it is a debt collector.

-A debt collector may not contact you at unreasonable hours, before 8:00 a.m. and after 9:00 p.m.

I find that a lot of debt collectors violate the Fair Debt Collection Act.  This is mostly because consumers are unaware of their legal rights under the law, or don’t have the proof to report the violation. So then the question is how should I deal with debt collectors?

Don’t let them pressure you into making the wrong choices about what to pay first. Constant harassment can cause consumers to pay the wrong debts first, resulting in serious consequences for the family.

To stop a debt collector from harassing you, simply tell the debt collector not to contact you anymore, under the “Fair Debt Collection Act” (use these words, he is aware of this law). By law, the debt collector cannot contact you without violating federal law. It is even better to tell the debt collector to cease communication in writing. The debt collector will usually get upset, so just hang up on him without further communication.

What can a debt collector really do to you?
A debt collector can do little more than demand payment. If the debt is unsecured, the creditor can only do three things:

Stop doing business with you.

Report your default to a credit bureau

Sue you in court.

It is important to note that many creditors do not follow through on their threats. After a period of time, the creditor can obtain a judgment, but this judgment still does not force you to pay the debt. It gives the creditor the right to seize part of your wages or particular property or assets that are paid for and that are not exempt. A creditor cannot garnish social security benefits, but can garnish a maximum of 25% of your take home pay from your wages, in Utah.  Bankruptcy is a great tool to stop debt collectors.

Bankrupt and over 65?

According to a recent report from the Institute for Financial Literacy, bankruptcy filings are on the rise among older Americans. In the past, most retirees who file bankruptcy have been driven into financial ruin by unmanageable medical bills. These days, however, its more likely to be credit card and other consumer debt.

Credit card interest and fees can easily spin out of control, especially for elderly people on fixed incomes who may turn to credit cards in order to make ends meet especially when they struggle with even the basic necessities like medical care and food.   Some retirees who now struggle with debt may not realize that some or all of their income is protected from creditor claims by a federal law that prohibits Social Security benefits from being garnished except to pay for child support, alimony or debts owed to the federal government such as delinquent taxes.  Even seniors whose only income is Social Security may still be vulnerable to creditors if they own other assets such as a home, cars, or family heirlooms, which creditors may seize to pay off debts.

Bankruptcy May Help Protect Assets
Most seniors with relatively few assets are able to emerge from bankruptcy without losing much if any property. Since certain assets, known as exempt property, are excluded from the bankruptcy liquidation process.  Also a debtor’s home and other property may also receive temporary protection once the bankruptcy case is filed through an legal doctrine known as the “automatic stay,” this is an order from a bankruptcy judge that prevents creditors from taking collection action for a set period of time against the debtors property.  Many people in Utah, including senior citizens, who are struggling with repressive debts or are experiencing harassment from creditors should speak with an experienced bankruptcy lawyer to learn more about their options.

Student Loans and Bankruptcy

Student loans are the most common way Utahans use to fund an education, specifically college and graduate school.  They can also provide educational opportunities that you may otherwise not have been able to obtain due to the cost. Sadly in many of the Utah cases that I see college grads are left with a diploma and the crushing financial burden of both credit card and student loan debt – and may times there is no job in sight.

The experts suggest the student loan debt is a real problem – bigger than the recent housing bubble and collapse. The latest statistics show  Americans are burdened by huge amount of student loan debt and now owe almost $1.2 trillion dollars in student loans.

As more and more people find themselves attending college and postgraduate programs they are using student loans in order to fund their continuing education.  This is certainly true here in Utah.  Receiving a federal student loans requires that a borrower sign a promissory note. This note – one that can also sometimes require a cosigner – is an agreement to pay back the loan in full and with interest and failing to do so can lead to legal issues.  If you cant pay the student loan collectors come a knocking.

Students who are unable to overcome their financial hardships may seek relief through bankruptcy. Filing for Chapter 7 bankruptcy provides you with the promise of settling debts and starting anew. However, student loan debt only further complicates the bankruptcy process for hopeful filers. This is because student loan debt, especially those owed to the federal government, are much more difficult to discharge through the bankruptcy. Discharging federally-funded student loan debt is not impossible in every situation. A borrower may be able to discharge his or her debt if he or she demonstrates to the bankruptcy court that the specific loan(s) have created an “undue financial hardship.”  Since congress did not tell us what undue financial hardship means proving it can be tough.  Although recently some bankruptcy courts have been more willing to grant relief based on this concept but it not all that common.  So it is important to note that this outcome is rare, though an experienced bankruptcy attorney can identify when you may qualify for a hardship discharge. Private student loan debt is usually managed by an independent organization. These private student loans are the result of what is typically an agreement entered between two private parties. Because of this privately funded loans may provide a greater opportunity to be discharged in a Chapter 7 bankruptcy filing.

Filing for Chapter 7 bankruptcy is both a stressful and complex decision.  When student loan debt is involved, the process can becomes even more complex. As case law and rules regarding the dischargeability of student loan debt continue to change, it becomes very important to seek the advice and counsel of a experience bankruptcy attorney. Even if you cannot discharge your student loans a bankruptcy still may free up some of your income to manage the student loan payments more easily in the future.

Its time to end your debt now!

Orem – Provo, Utah bankruptcy video just posted to YouTube. It is time to end your debt now!

What questions should you ask a bankruptcy lawyer at your first consultation?

When you’re thinking about filing for bankruptcy it’s critical that you hire an experienced bankruptcy lawyer to help you through the process. Most Utah lawyers offer free initial consultations in personal bankruptcy cases. This is good for the consumer since it will give you an opportunity to meet with different lawyers to determine who you would feel most comfortable working with. I always recommend that you meet with the lawyer not a paralegal, sales person or an assistant. Remember this is the first step in rebuilding your financial future so start it off right. Here are the top questions I think you should be prepared to ask (and they should be prepared to answer) during your initial consultation:

1. Should I file for bankruptcy?
This question most likely will provide you with a lot of answers. The lawyer should explain that there are five different types of bankruptcy. Most people will usually qualify for at least Chapter 7 and Chapter 13 bankruptcy. The lawyer should offer recommendations and options to you based on your individual situation.

2. What are the benefits of filing for bankruptcy?
The answer to this question is not a one-liner and should include specifics. The lawyer should give you a clear understanding of the benefits and how they would vary depending on the type of bankruptcy that you file. Most lawyers should also tell you the negative parts of bankruptcy.

3. Who will go with me to court?
Going to court maybe one the most nerve-wracking part of the process for a bankruptcy filer if you do not have an advocate you can trust. During this time, you will want the lawyer that has been handling your case at your side, not some paralegal, so ask the question up front. There may be a chance that a different lawyer from the same firm could go to court with you the day of, but you’ll want to be reassured that he/she has been briefed on your case and will serve as a strong representation of your primary lawyer. Your lawyer should inform you of this in advance.

4. What is the best (not easiest) way to a hold of you?
Some lawyers may be easily accessible by phone and others by email. During the bankruptcy process, the last thing you want is to have an attorney that you can’t reach or won’t return phone calls or emails quickly. If you feel more comfortable being able to speak with your lawyer by phone and he/she typically only corresponds by email, it may not be the best fit. Set the stage for the kind of communication you’ll come to expect.

5. What are the negative effects of me filing for bankruptcy?
Filing for bankruptcy doesn’t necessarily mean you’re free and clear of all debts. Some debts for example may not go away due to the bankruptcy filing. The lawyer should inform you of all of the consequences that may result from a bankruptcy filing versus what the effects would be of not filing at all.

6. How much of your practice is devoted to bankruptcy cases?
When you walk into a bankruptcy lawyer’s office, you assume that their primary practice is devoted to bankruptcy. However, that is not always the case. Sometimes, lawyers who practice bankruptcy law may also practice personal injury or divorce law. Ideally, you’d want to work with a lawyer who devotes at least 50% of their practice to bankruptcy law and has been practicing for a minimum of 5 years.

7. How much is the lawyer’s fee?
The average cost to file for Chapter 7 bankruptcy, which is the most common case, is about $1,100 to $1,500, according to recent research by the National Bureau of Economic Research. Fees can vary from one lawyer to another, but should cover both the federal filing fee and the lawyer’s fees and the lawyer should specify exactly how much each one is in writing.

8. Will you use a written fee agreement?
The answer to this question should be a resounding YES. It’s important for you and your lawyer to have a formal agreement stating what you will pay and what services are and are not covered. An oral agreement just doesn’t cover it – make sure you know what you are buying.

9. What is included in the lawyer’s fee?
This should include everything from filing to completing your case. In rare instances, unforeseen costs may come up, but the lawyer should discuss all of this with you in detail and tell you what those cost extra costs may be in their fee agreement.

10. What information do I need to get you to get started?
I think the more information they ask you to provide, the better. To avoid having your bankruptcy case dismissed, at the very minimum you’ll want to have all of your financials and paperwork in order. Your lawyer should provide you with a detailed checklist of the information required for your case to be successful.

Remember this is you financial future. Never be afraid to ask tough questions and even ask for referrals from previous clients. You want to be totally comfortable with the person and firm you are going to hire, so if the person you speak with doesn’t give you confidence, go visit with someone else – as I’m sure you know there are a lot of lawyers out there, finding your lawyer might take some effort. Bottom line experience counts.

Looking for a cheap bankruptcy attorney near you? Something you should know:

So here is the inside scoop:
1. All bankruptcy attorneys filing in a specific court charge within a few hundred dollars of each other. This goes for the bankruptcy court in Utah. The reason: Bankruptcy fees are disclosed in all cases and they are easily available for viewing on-line by attorneys that work in that court. Any attorney wanting to see what the competition is charging goes to the court’s website, a few clicks and voila, they know! Everybody charges within this range.

2. Lawyers are not dumb. They have to run a business and earn a profit to make a living. The guys who charges low-ball prices and tout so called inexpensive bankruptcy make up for the lower margins by running more cases through the office in less time. It’s what is known as a “bankruptcy mill.” Expect less attention and time answering your questions and concerns. You get what you pay for. I get way too many calls from disappointed customers who got no service from such firms.

3. You cannot be overcharged. The U.S. Trustee’s Office (UST), which is the U.S. Justice Department’s watch-dog guarding the bankruptcy system from abuse, closely monitors attorney fees. (This is especially true for the US Bankruptcy Court, District of Utah.) The UST attorneys, and the judges, know the “going rates” for a bankruptcy. Too high of attorney fees, and the UST will file a motion asking the judge to order the attorney to “disgorge” — return the excess fees back to the client.

4.  Special Chapter 7 Financing By Law Firms:  Some firms are now pushing creative financing on people seeking to file a Chapter 7 bankruptcy.  They tout these as “$0 Down Ch. 7 Bankruptcy” cases.  They quickly file a case for you, then tell you that they will need $2800 for them to stay on as your attorney and file the balance of the required paperwork.  Since you don’t have any money they make a deal for you to take out a loan so you can pay them the $2,800 you now owe them.  (FYI this same case cost around $1100 from most lawyers I know that don’t do creative financing)  So just think about it: you went from being debt free for about a minute to being back in repressive debt to the guys that claim to be representing your best interests.  If you couldn’t make you installment payments before the Chapter 7 bankruptcy what make you think you will now be able to make installment payments?  Not what I would call a fresh financial start.

5. When filing a Chapter 13 bankruptcy case in Utah, the court has a set preferred fee schedule. In bankruptcy, attorney’s fees must be approved by the court. To save time and reduce effort by everyone, the local bankruptcy court has set pre-approved fees for cases, based on the range of services to be delivered. As of this writing (Feb 2017), for a routine Chapter 13 case (with no special issues) an attorney will be allowed $3,000 to $3,500 (not including costs) in the US Bankruptcy Court, District of Utah.   Since most cases will involve additional work beyond plan confirmation, the $3,500 flat fee is the most cost-effective for clients and the one usually charged by attorneys.

6. “I don’t have any money, I’m bankrupt.” When the garnishments begin and a creditor seizes your bank account or 25% of your paycheck, you cannot NOT afford the protection and relief from debt that bankruptcy affords. So how do you finance the fees and cost?

A few options:
A. Save it up. Stop paying on debts you will get rid of in bankruptcy anyway, such as unsecured debts or loans on property you are planning on giving back to the lender. Continuing to pay is a waste of money and also a possible “preference” in bankruptcy in which the creditor can be forced to pay the money back to your case trustee to be divided up among all creditors fairly. Also, don’t be accused of “bad faith” if you pay one creditor and don’t pay another before the filing. If you don’t have the means, just stop paying them all.
B. The “friends and family” financing plan. Bankruptcy removes the legal obligation, but it’s not against the law to voluntarily pay it if you want. Many clients get loans or gifts from persons they know to pay for the service. Post-discharge they have more excess income to make a voluntary re-pay.
C. Borrow from, or partially liquidate, an “exempt” asset to generate funds. In bankruptcy, some assets are protected and remain property of the debtor. Retirement plans, for example, are generally exempt. If necessary, you may be able to borrow from it or take a hardship withdrawal, depending on the plan’s rules.

Whatever you do make sure you plan your bankruptcy with your attorney.

7. Return On Investment. The cost of a bankruptcy is tiny compared to the benefits. Run the numbers. If it costs $1,100 (the current average for a typical Chapter 7) to get rid of $30,000 in credit cards, what is the net benefit? Answer: $29,900! A few dollars more or less is insignificant compared to a benefit ten times your cost — assuming you have chosen an attorney for the experience and qualifications to get you results.

8. Shopping for a low-priced bankruptcy is not a smart way to pick a bankruptcy law professional. Cost is only one factor, and a factor of very low relative importance, at that. Instead look for an attorney you trust, with whom you have a good working relationship, who answers your questions, and who has the legal experience and qualifications to get the results you need. Check your attorney out on AVVO or other services and make sure you get someone who will look out for you.

Can I File Bankruptcy For My Medical Bills?

Having overwhelming medical debt is a leading factor that leads to people needing to file a bankruptcy in Utah. In the majority of cases I see this arises from the failure of the debtor to have medical insurance. Even if you have medical coverage it is possible to run up huge medical debts your insurance company does not fully pay or the associated costs of prescription drugs and other ongoing medical help.
Can I File Bankruptcy For My Medical Bills?

Yes. There are two types of bankruptcy that can help people eliminate or reduce their medical debts, a Chapter 7 bankruptcy and a Chapter 13 bankruptcy.

A Chapter 7 bankruptcy can only be filed once every 8 years. Because of this I urge my clients to obtain medical insurance before filing a Chapter 7 bankruptcy, if they do not already have coverage already. As an example, you could file a Chapter 7 bankruptcy and wipe out $50,000 in medical debt, but then have to go into the hospital the next day due to an unexpected car accident and run up another $100,000 in medical debt. At this point, you would not be able to file another Chapter 7 bankruptcy for 8 more years to eliminate that debt. So it is always wise to look into obtaining medical insurance that can help you in the future eliminate the major cause of filing for bankruptcy in Utah.

After filing for bankruptcy do I need to keep paying my house and car payment?

If you want to keep your house or car after filing for bankruptcy then you need to continue to make monthly payments. The way you make the payment may very depending on the type of bankruptcy you file.  You should make sure your Utah bankruptcy lawyer lets you know how you should be making your payments after your case is filed.  Be careful, some creditors may stop sending you statements or discontinue your online access out of concern that they may be violating the automatic stay. It’s up to you to mail your house or car payment monthly. Many times these installment payments are a great way to start rebuilding your credit.  However if you don’t make the payments are on time it can hurt your attempt to rebuild your credit.