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Do I need to file for Bankruptcy?

A: If you are asking yourself that question the answer is probably yes. The biggest complaint I hear from people when they come to my office is “I should have done this years ago” or “My wife has been trying to get me to do this for years”.

The truth is people don’t want to file a bankruptcy; for some good reasons and for some reasons that are simply unfounded. Many people are afraid that they will lose their home, cars, furniture, etc. That is simply not true in most circumstances.

Others are worried about what bankruptcy will do to their credit. Truth is, unfortunately, most people that file for bankruptcy already have poor credit already and the additional hit that a bankruptcy filing may have on their credit score is insignificant. Filing bankruptcy is actually the best thing you can do for your credit if your credit is already shot. It will stop your creditors from ever reporting your late payments, your chargeoffs, your repossessions again to the credit reporting agencies. These credit reporting are the things that are killing your credit. By simply eliminating any further knocks to your credit it will improve over time by doing nothing else. You can expect to see marked improvements in a relatively short amount of time.

Now, if you are in that rare class that is current on everything and have great credit but are just simply struggling to keep it all together the decision is, admittedly, tougher. You have worked hard and long for your credit and it is something you pride yourself on. Yes, your credit is going to tank by filing bankruptcy. However, you have proven that you can build and maintain great credit and you can do it again. It won’t take that long. We are talking a couple of years.

The biggest misconception that I hear regarding bankruptcy and future credit is “So will my credit be shot for 7 years or 10?” That misconception comes from the reality that bankruptcy may stay on your credit for up to 10 years. The misconception part is that your credit will be shot that whole time. The most important thing a creditor looks at when determining your creditworthiness is your credit score, that’s it. And the truth is your score can recover from bankruptcy in a couple of years if you will follow my credit healing plan. Even the FHA (the government agency that insures loans made by banks for home loans and only offers ultra-competitive interest rates) will approve you for a home loan in 2 years after filing bankruptcy. And, I have clients that purchase vehicles that week after receiving a discharge (albeit with a significant interest rate most likely).

In the end, what you have to ask yourself is “Is this financial firestorm that is going on with me and my family going to win”? Is it going to continue to cause me and my family grief, heartache, stress, and tears? Believe this – the stress that is occurring as a result of financial pressure is definitely taking a toll on your health. If you don’t recognize it now you will soon. It can be evidenced by weight gain or loss, aches and pains, depression, withdrawal, headaches among other symptoms. Only you can make the decision to put a stop to the debt spiral. Do it now or regret you waited so long later.

Call now (405) 233-0623 or EMAIL ME.

How Do I File Bankruptcy?

A: In order to file for bankruptcy, you first need to follow a process prior to filing in order to make sure that you have everything in order in order to expedite the process and make it as painless as possible.

Bankruptcy Process in Oklahoma City and Surrounding Areas

Chapter 7 Bankruptcy

1. Mandatory Credit Counseling

You must take a mandatory bankruptcy education class prior to filing your case.

a. GO TO http://decafnow.com/?btx=95313

b. Take the “First Course” before filing.  A certificate will be delivered to us.

c. After your case is filed and a case number has been issued, you must take the second course to be eligible for a discharge.

2. Get the Necessary Documents to Me:

e. A complete list of necessary documents can be found here: Bankruptcy Checklist

c. Obtain credit reports or have me pull all 3 bureaus for you for $38.00 per filer

d. Auto titles and purchase agreements to all vehicles in your name

e. Download and fill out the form found here: bankruptcy questionnaire

f. Email all of these documents to me at marty@attorneyok.com

f. I require a non-refundable deposit of $300.00 to begin work on your case.  The balance is due upon filing.  Bankruptcy attorneys cannot accept any money from you after you file your case because that debt would be washed away like your other debts.  For this reason, all the fees are required to be paid prior to filing your case.  The only other option is for a credit-worthy friend or relative to guarantee the payback of the fees on your behalf. Any fees paid beyond the initial $300.00 will only be refunded if unearned; that is, fees that I have not earned by work already conducted on your case.

You may scan and email these, you can fax them to (405) 576-3952 or you can bring them with you to your consultation. For directions to my office click here.

3. File Petition, Schedules, and Statement of Financial Affairs with the Court

I will analyze your financial situation and determine that, based on the means test, you qualify for filing a Chapter 7 Bankruptcy. You will come into my office and I will go over all your paperwork with you prior to signing to make sure that we have everything listed correctly and have included all of your creditors. I can have your papers ready for you to sign and get your case filed, usually, within 2 days of you providing me the needed materials.

4. Meeting of Creditors

This is an informal meeting giving your creditors the opportunity to ask you questions regarding your debts. While most creditors do not attend, this is also an opportunity for the Trustee to make sure that you have filled the paperwork out correctly listing all of your assets, all of your debts and all of your income. You will be under oath so you must be honest at this hearing. Actually, though, these meetings are usually very short and most people find that they are not as big of a deal as they thought it would be.

4. The “waiting period”

After the meeting of creditors, there will be a period of time (usually about 60 days) in which creditor may object to your discharge. This rarely happens in normal situations. Things that can cause debt, or even your case, to be denied is lying on your schedules or not divulging all of the relevant information about your debts, assets and/or income up front to me so they can be listed in your forms. Even if you think it’s not imortant please tell me so I can make that determination. I am here to help you make the best decision for you and your family but I can not do that unless you tell me everything there is to know about your finances.

5. Financial Management Course

This is a class similar to the one you had to take prior to filing bankruptcy. You can take it online and the cost ranges from $10.00 to $30.00 depending on the provider.  In a Chapter 13 case you may also take a very informative class that satisfies this requirement for free on most Thursdays at the Bankruptcy Courthouse. You can actually take this class anytime after I send you your case number.

6. Discharge

This is the carrot at the end of the process. Permanent debt destruction for all discharged debts.

7. Credit Rebuilding

I have many credit rebuilding programs that can get you back into all the advantages that having good credit can give you in a surprisingly short amount of time.

Chapter 13 Bankruptcy

The Chapter 13 process is very similar in all respects to a Ch. 7 prior to filing. The documents needed are generally the same. The key difference in Chapter 13 is that your case will contain what is called a “plan”. This is a budget of sorts that determines and tells the Trustee who is to be paid as well as when and how much they are to be paid. This plan must be accepted and approved by the Trustee as well as your creditors. However, really only the secured creditors having loans like car payments and mortgages have any voice in the process. The approval of your plan is called “plan confirmation” and usually happens within 3 months of filing your case. The unsecured creditors are paid what is determined to be your ability to pay them back as calculated by the means test. The means test is also the test used to determine whether you qualify for a Chapter 7 Bankruptcy and determines what your disposable income, if any, is.

Once the Chapter 13 case is filed, you will begin making the plan payment 30 days from that date. It is really impossible to determine what the plan payment might be without an in-office consultation. Email Me to schedule a free consultation.

The plan will be confirmed, usually, within 3 months of filing the case. You will continue making the payment for a period of 36 to 60 months. The length of time depends on a number of factors such as (1) how much time you may need to get current on an asset that you are wanting to keep (2) your income; basically, if you don’t qualify for a Chapter 7 based on results from the means test then you will have to be in a Chapter 13 plan for 60 months regardless unless you are paying back all of your creditors 100% and you pay them all off early. There are other factors that can affect this and I can explain them to you based on your particular situation.

After you complete the plan you will be eligible for a discharge! Call today (405) 255-2380 or Email Me to set up your free consultation.

Can you eliminate tax debt by filing for bankruptcy?

A: In many cases, you can eliminate tax debt owed to the Internal Revenue Service, Oklahoma Tax Commission or other taxing agencies. Certain tax obligations are dischargeable or may be managed in bankruptcy. The primary relevant factors (see more specifics below) are the age of the taxes (determined by calculating from the date the returns were last DUE to be filed), the date of assessment of the taxes (determined by the taxing agency), the dates you filed your returns (IF they were filed) and whether you willfully attempted to evade payment of the tax by fraud.

Personal Income Taxes

Contrary to popular belief, you may be able to discharge taxes in bankruptcy. The rules governing income taxes are spelled out in the bankruptcy code under 11 USC 523. To be dischargeable the taxes must have been due at least 3 years ago. So, if filing on April 16, 2012, you may potentially discharge 2008 taxes and prior.

Further, the taxes must have been filed at least 2 years ago. And by filed I mean that you or your CPA filed them, not the IRS or state tax commission. If they filed them then you will not be able to discharge them unless you, if not too late, file an amended return and wait the two years out.

The third requirement related to discharging personal income taxes due is that the assessment must not have come within the past 240 days. This rule is the most tricky one because many factors come into play here. Say for example you are audited and are hit with an assessment and you appeal that assessment. In that case, the 240 days do not start running until after the appeal is concluded and you are assessed. Additionally, if you submit an offer in compromise, the 240 days do not run during the time the IRS is considering your offer. Moreover, once the offer in compromise is decided you have to wait an additional 30 days on top of the 240 days before the tax liability is dischargeable.

Last, but not least, if you are found to have filed a fraudulent return or willfully attempted in any manner to evade or defeat the taxes owed your tax liability will not be discharged regardless of the above factors.

Tax Liens

Keep in mind that even if you are able to discharge a tax debt as described above, if you already have a tax lien against your property or another asset, that lien is not going to go away by filing bankruptcy; even if you are able to discharge the underlying tax liability. I can talk to you about this if it applies and, perhaps, work out some arrangement to have that lien lifted before you file. However, even if you do have the tax lien remaining on your property, the lien will go away after 10 years.

Property Taxes

Any property taxes are dischargeable after one year from when a penalty begins accruing. The same caveat stated above in regards to tax liens applies here. However, keep in mind that you will be able to repay the property taxes (and income taxes above for that matter) interest and penalty-free on your terms and once they are paid the liens will be removed.

What are the Requirements for Discharging Taxes and Tax Debts in Bankruptcy?

The minimum requirements for discharging federal or state income taxes are (all of the following must be met): (1) it has been more than 3 years since the returns were last DUE (including extensions) to be filed, (2) the returns were timely filed or it has been at least 2 years since the returns were filed, (3) there was no fraud involved or attempts to evade the tax, AND, (4) the taxes were not assessed within the last 240 days.

However, even if you cannot get rid of your tax debt fully in a Chapter 7 bankruptcy case, you may be able to discharge some of it and enter into a more favorable repayment plan for the taxes than you otherwise could outside of bankruptcy in Chapter 13 or Chapter 11 case.

Similarly, sometimes sales taxes and other taxes, such as those owed to the State Franchise, or Board of Equalization, or Employment Development Department may also be dealt with in a bankruptcy case.

The most important thing to do if you are having tax problems is to investigate bankruptcy as a possible alternative to dealing with your taxes. This is particularly true if it has been more than three (3) years since the tax returns for the years you owe were last due to be filed.

Our firm handles cases throughout the Oklahoma City Metro. Please call my office today for a free bankruptcy consultation, either in my office or by telephone: Contact Us

Will the IRS Take My House If I Have a Tax Lien?

A: Yes, they can but it is rare. The last thing the IRS wants to do is go to the trouble of taking and selling your house. They would much rather go after low-hanging fruit like wage garnishments or bank account levies. But, if you have substantial equity in your house, take steps now to plan for a way to deal with the problem. Your tax problems will not go away by themselves. I have effective ways to deal with the IRS and/or the Oklahoma Tax Commission.

What Does It Cost To File Bankruptcy?

A: There are a few costs and fees associated with filing any type of bankruptcy. What follows is a list with an explanation. I will say that my fees for the various chapters are extremely competitive. Can you find lower fees elsewhere? Maybe. However, make sure you find out exactly what you are getting for your money.

Court Filing Fees

These are the fees charged by the Bankruptcy Court and go to the Bankruptcy Court for the cost of administering your case. These fees do not go to the attorney.

  • Chapter 7: $335.00
  • Chapter 13: $310.00

Credit Counseling Fee

A certificate of credit counseling is required to file a Ch. 7 or Ch. 13 Bankruptcy. There are many companies that provide this service and the fees range from around $8.00 on up. At last check, you can obtain the certificate from the site www.decalfnow.com for $25.00 (must use attorney code BTX95313 for that special rate). Once you take the course and receive the certificate please email it to me at marty@attorneyok.com.

Credit Report Fee

A credit report is normally necessary so as to ensure that you have listed all of your creditors in your bankruptcy paperwork. You can pull all three bureaus at www.annualcreditreport.com for free if you haven’t pulled them in the last 12 months. DON’T USE THE “GET ALL THREE” OPTION; this will only give you a summary. You must get each individual report separately so that you receive all of the pertinent information from the reports.

Please double check your credit reports: If a debt is not listed, we’ll need the name of the creditor, address, account number, when the debt was incurred and the outstanding balance.

If you are unable to obtain your reports for free we can obtain all three for a charge of $38.00 for each person filing. Our service provides the additional benefit of seeing what your credit score will likely be 15 months after filing the bankruptcy.

Attorney Fees

Attorneys fees can vary widely, even within the same city. My advice is to call around and simply ask how much an attorney charges. I can usually give someone a quote over the phone with just a few simple questions. If an attorney is unable or unwilling to give you a quote over the phone then they might realize that their rates aren’t competitive and doesn’t want to lose potential clients by blowing them out with there prices over the phone. I am proud of my rates and my service and don’t mind sharing them with anyone that calls me (405) 255-2380 or EMAIL me.

I require a non-refundable deposit of $300.00 at the time you bring me your documents to begin work on your case. The balance is due upon filing. Bankruptcy attorneys cannot collect any money from you after you file your case because that debt would be washed away like your other debts. For this reason, all the fees are required to be paid prior to filing your case. The only other option is for a credit-worthy friend or relative to guarantee the payback of the fees on your behalf.

What are you getting for your money?

There are a lot of bankruptcy attorneys out there…just like there are a lot of doctors. I wouldn’t make a decision as to which doctor was going to perform an important surgery on my wife based on how much the doctor is going to charge me. In fact, that would probably be one of the last considerations that I would have. The same should be true as to which bankruptcy attorney to choose. This is a big decision with potentially huge consequences as to your future financial well-being. I get a lot of calls from people who have filed bankruptcy with an incompetent attorney or paralegal and then want to hire me to fix the problems, if possible (and often it is not possible at that point).

When selecting an attorney, you need to ask several important questions:

  1. Am I comfortable with this attorney?
  2. Does this attorney have the experience and expertise to handle the problems that may arise in my case?
  3. Is the attorney handling the main portions of my case himself, or delegating the work to secretaries or paralegals?
  4. What am I getting for my fees?

If you run across an attorney who is willing to take your case much lower than the market rate you should be skeptical. Ask yourself why this person is willing to take less than other attorneys. Is it a competence issue? Are they running people through the process like livestock at a feedlot? Generally, in life, as well as here, you get what you pay for.

One admittedly big problem people facing bankruptcy often have, of course, is a lack of cash. However, there are ways to free up cash once you understand how the system works. For example, if your cash flow is low because you are making minimum payments on your credit cards, you may be able to stop (in most cases) making those payments and save up some money for attorneys’ fees (don’t do this without the advice of your attorney). There are also ways, depending on what Chapter you are filing under, to make payments over time or to obtain some money from the sale of assets. In any event, there is usually a way to make it work.

I do understand that some people really cannot afford anything but the absolute minimum (whatever that might be) and for them, I suggest they do everything they can to ensure that the attorney they select is competent and pays attention to their case from start to finish. However, if you really are in this situation, bankruptcy may not be the optimal solution to your problems.

I pride myself on providing a very high quality of service for my clients which, I believe, is portrayed by some of their wonderful testimonials. I have also set up my practice to minimize expenses and pass those along to my clients in the form of the lowest possible attorney’s fees. I will work with you to arrive at a payment plan that fits with your personal situation if at all possible.

Our firm handles cases throughout the Oklahoma City Metro. Please call my office today for a free bankruptcy consultation, either in my office or by telephone, at (405) 233-0623.

Can Bankruptcy Save My Home?

A: Yes, it can stop the foreclosure process and allow you time to catch up on the past due amounts, provided that you act soon enough. So the short answer to “Can filing bankruptcy stop a foreclosure sale and save your home?” is yes—so long as the sale confirmation has not occurred a bankruptcy filing will stop the process in its tracks. I have filed numerous cases where a family’s home was to be sold at a sheriff’s sale the following day.

The moment you file a bankruptcy a court injunction known as an “automatic stay” kicks in. This injunction stops all collection activity immediately. Simply put, your creditors can no longer do anything to bother or contact you nor can they take anything that is yours. This includes selling your home at a sheriff’s sale.

In today’s economy, foreclosure sales are happening with increased frequency. People are unable to maintain the payments on their mortgages, go into default, and when they are unable to work out payments arrangements with the bank, eventually they lose their homes.

Filing bankruptcy can stop a foreclosure sale. The automatic stay will stop a pending foreclosure sale on your house (so long as you haven’t had a prior bankruptcy case dismissed within the past 12 months). The automatic stay remains in effect until your case is completed or dismissed.

The most typical Chapters to use to stop a foreclosure are Chapter 13, because you can propose a Plan of repayment that catches up (cures) on the past due amounts you owe to your mortgage or other lenders against your home, over a 36 to 60 month period, and Chapter 11, which also allows a longer-term cure of arrearages. This, of course, assumes that you are otherwise eligible to file Chapter 13 (or 11) and have the regular income sufficient to propose such a plan. Plus, in some situations, you may actually be able to eliminate junior liens on your property entirely. Visit my Chapter 13 page for more information.

Chapter 7 will temporarily stop a foreclosure sale, but usually just for a month or two. Since no payments are made in a Chapter 7 case, you would need to negotiate with a foreclosing creditor outside the bankruptcy case to resolve your issues, if possible.

Avoid the Biggest Mistake

THE BIGGEST MISTAKE that people make is waiting until a few days prior to the foreclosure sale date to look into bankruptcy as an option. At that point, it will be difficult to find an attorney who can properly process everything in time to get your case filed on time, and you increase the likelihood of serious mistakes that way.

Now, it is important to consider all of the repercussions of filing bankruptcy just to stave off a sheriff’s sale on your home. You will have to deal with the back payments and interest owed. This can best be done by filing a Chapter 13 bankruptcy. In that type of bankruptcy, you will be able to get caught up on your payments and any penalties over time (36-60 months). You will likely be able to pay the missed payments and fees interest-free. But, you will also have to make regular payments as well. So, before you file it is important for us to go over your budget and see if this will be possible

If you are facing a foreclosure, the best thing you can do is visit with me as soon as possible. The sooner that you and I deal with the problem the more options will be available to you. In some cases, you might avoid bankruptcy entirely. Our firm handles cases throughout the Oklahoma City Metro. Please call my office today for a free bankruptcy consultation, either in my office or by telephone: Contact Us.

Which debts can you discharge in bankruptcy?

A: It is much easier to describe the type of debts that are generally not dischargeable. Most unsecured debt or debt in which there is not a lien attached to something you own is dischargeable. That is, credit card debt and medical bills (which comprise the bulk of people’s financial issues) are dischargeable. Secured debts such as car loans and mortgages are dischargeable too but you will still have to pay the debts associated with property associated with the loan if you want to keep that property.

The most common question I get is “Will I be able to keep my car and my house”? The answer to that is yes if we can figure out a way to pay for them. If you happen to be behind on those payments there are ways to get caught up and allow you to keep them. If you are current on those payments then there shouldn’t be any reason that you can’t keep your car and house. However, if you want to walk away from either of those obligations then you are perfectly able to do that too, without any financial recourse.

As I mentioned before, there are some debts that aren’t usually dischargeable. For the most part student loans are not dischargeable. Neither are recent tax obligations (see my tax page). Child support and alimony are never dischargeable. Debts related to some bad or illegal acts you may have done isn’t dischargeable. For a complete list of all non-dischargeable debts click here.

Additionally, there are some debts that may not be dischargeable in Chapter 7 but are dischargeable in Chapter 13. Please contact me if you have any specific debts that you would like to know whether they are dischargeable or not.

Can I keep some credit cards out of bankruptcy if I am current?

A: No, all your debts must be listed and even if you didn’t list them the creditor would most likely cancel them upon filing anyway.

What are the Oklahoma Exemptions?

A: Exemptions are the things that are protected by law. There are Oklahoma Laws that protect certain items from being taken by creditors and the same protections extend to bankruptcy.

What happens to my debts?

A: All unsecured and dischargeable debts are wiped out once your case is discharged (usually 3 to 4 months after filing).