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Thread: Bankruptcy

  1. #1
    Veteran Member RachelleD's Avatar
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    Default Bankruptcy

    My best friend of 20 years is going to file bankruptcy and not use an attorney. She bought some book and thinks she can do it himself. I realize that people don't need lawyers for everything, but this isn't trivial. I pointed out that if there is even the slightest screw up there could be huge ramifications, but she keeps insisting she can't afford an attorney. I can't loan her the money- she doesn't seem to repay loans- but does anyone have advice for talking her out of it, or any other solutions? What about firms that are comprised of paralegals? I think anything would be better than her doing it herself... does anyone know of anyone who has done this?
    "She believed she could, so she did." -unknown

    **Rachelle**

  2. #2
    God/dess Bunny's Avatar
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    Default Re: Bankruptcy

    Does she own any property? When I filed Chapter 7 I needed an attorney because I had some issues that complicated things but if she doesn't have anything for them to take it's not as difficult. I'm not an attorney though, just someone who's filed bankruptcy. Is she getting an income tax refund at the end of the year? That's what I used to pay my attorney.

  3. #3
    Veteran Member RachelleD's Avatar
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    Default Re: Bankruptcy

    She has a car, but no real estate or anything. I don't know if she's getting a tax refund but I'll ask her. I do know that she has to file soon because the laws are changing & I don't think she could wait that long to get her refund. She shopped lawyers and they were all telling her it'd be between $1000 - $1200. She wants to do it herself because she says she can do it for $200. How much did you pay Bunny?
    "She believed she could, so she did." -unknown

    **Rachelle**

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    Banned Melonie's Avatar
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    Default Re: Bankruptcy

    By the time that your friend or anybody else can probably get a new bankruptcy filing onto the court docket, the new laws will be in effect. The major changes in the new bankruptcy law are ...

    A. - instead of being allowed to 'write off' all bad debts, individual finances will now be scrutinized by the bankruptcy judge and small but continuing payments on bad debts will be court ordered which may/will continue for the next 3-5 years. In your friend's case, if for example she owes more money on her car loan right now than the car can be 'auctioned' for when repoed, the court may order that your friend must continue to pay the loan company $50-$100 a month for 3-5 years to make up the difference to the loan company.

    B. - with certain deference to state laws, the bankruptcy judge can rule that certain assets owned by the bankruptcy filer can be sold/confiscated to satisfy creditors. In your friend's case this would almost certainly mean that her car would be repo'd, and could also mean her anticipated tax return money will be confiscated.

    C. - because the court needs to understand the individual finances involved in order to render a decision re 'ongoing' monthly payments after bankruptcy, past earned income, income tax, and bank transaction records will probably be scrutinized in detail. This may lead to additional 'complications' if the declared income numbers, the taxes paid, and the amount of money spent don't jive with each other.

    D. - unlike current 'credit discrimination' laws which allow bankrupt persons to obtain credit again within a few years of filing for bankruptcy, the new law not only restricts available credit because of the ongoing court ordered monthly payments towards bad debts, but also includes stricter time limits in regard to repeat bankruptcy filings.
    Last edited by Melonie; 09-04-2005 at 05:19 PM.

  5. #5
    God/dess Deogol's Avatar
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    Default Re: Bankruptcy

    Bankruptcy ain't what it use to be!

  6. #6
    Veteran Member stant's Avatar
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    Default Re: Bankruptcy

    Quote Originally Posted by Melonie
    By the time that your friend or anybody else can probably get a new bankruptcy filing onto the court docket, the new laws will be in effect.
    Slow down there cowboy. Besides a flawed explanation of the changes in the law, the only constructive comment I see here is "don't bother, your fucked."

    Without taking this as advice or legal advice, it sounds like this girl has absolutely the simplest type of bankruptcy action. I see no reason she shouldn't file ASAP, and do it pro se (herself). I'd suggest filing for a pro se exemption at BK court, which could waive the filing fee (~$200).

    Also, the filing and law passage dates are the only relevant ones here. How and when the Federal district she's in percolates her case onto a specific court docket is totally irrelevant to her.

    Your description of bankruptcy court is highly misleading of its nature, which is simply a means for those unable to overcome debt to discharge it. This sounds like a perfect example of who the law was intended to help.

    Quote Originally Posted by rachell
    I realize that people don't need lawyers for everything, but this isn't trivial. I pointed out that if there is even the slightest screw up there could be huge ramifications, but she keeps insisting she can't afford an attorney.
    Look at the common sense approach to this: Don't you think the courts may be somewhat skilled in dealing with desperate cases like hers? It is after all the purpose of the law. Give the system half a chance.

    This will help her:
    http://www.nolo.com/product.cfm/Obje...51A79/213/161/

    To Rach: tell her to get the Nolo book.
    To Mel: Be carefull. Many here listen to you faithfully.
    Last edited by stant; 09-04-2005 at 10:47 PM.

  7. #7
    God/dess VenusGoddess's Avatar
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    Default Re: Bankruptcy

    I just wanted to add that the law which applies to each case is based upon when it is FILED with the court...not when it is discharged.

    If you file your bankruptcy papers on September 30, 2005 but it doesn't get discharged until October 21, 2005...your bankruptcy would be discharged according to the laws that were in effect as of September 30th. If you filed on October 16, 2005 your bankruptcy would be discharged as of the laws on October 16th. Anything after that means that you'll be filing with the new laws.

    Filing a chapter 7 is not hard. It means getting a tri-merge credit report and filing against all of your current and past debts (you should ALWAYS bankrupt any "write-offs" or non-active collections). There are several websites that offer free help to anyone doing this pro se. If she wanted to do chapter 13, then she would probably need a lawyer, as chapter 13 bankruptcy is much more involved and more complicated.

    If she does a chapter 7, she needs to be prepared to give up her car (if it's not paid off). MOST bankruptcy judges will not order that someone's automobile be confiscated (if it's paid off) to be sold and pay off any other debt. Usually because that would put even more hardship on the person filing. If her car is NOT paid off...they will, most likely, allow the car to be repoed and put the "oustanding balance" of what is owed after sale on the bankruptcy (which would prevent the car fianance company from coming after her for more money).

    In the state of Illinois, I believe that the filing fee is $209. Sometimes, you can get a waiver for financial harship and the judge/court can rule to have the fee waived. It's not done too often...but it can be done.

    Here is an online bankruptcy site. Have your friend "shop" around. And, make her decision...quickly.

    http://www.privatebankruptcy.com

  8. #8
    Banned Melonie's Avatar
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    Default Re: Bankruptcy

    I will certainly agree that it is not impossible for an individual to properly research, prepare and submit a Chapter 7 bankruptcy application without the assistance of an attorney within the next 6 weeks to beat the October 17th change in bankruptcy law. But there are a lot of things which need to be done in a hurry, and done right the first time ...

    - as Venus said, get a fresh credit report

    - verify the actual identity of all creditors appearing on that report, including the actual businesses and DBA's behind the collection agency entries that appear on the report

    - verify the validity and actual amounts owed on all of these 'bad debts' with the actual businesses

    - research the particular venue and particular forms/petition necessary to file for Chapter 7 bankruptcy in your state

    - if your state requires it, collate your earned income, income tax, and/or weekly budget information

    - prepare the necessary forms/petition using the above information in a manner which is free of 'substantial errors' in form or content

    - pay the fee and file the necessary forms/petition at the appropriate venue in person no later than October 14th

    Can this be done ? Sure it can ! Is there a significant potential of leaving off a creditor, entering incorrect amounts owed, entering an incorrect business name/DBA, entering incorrect personal finance info (if your state requires it), or making a 'substantial error' when preparing the paperwork in a major hurry ? Sure there is. And if there is a major 'screw up', it very likely means going back to the drawing board under the new laws.

    Stant, I think that you misunderstood my intent ... which was to point out that anyone who is contemplating filing a last minute 'Chapter 7' bankruptcy before the laws change, and who wants to be certain that they can get a Chapter 7 bankruptcy petition properly prepared and filed before the new laws take effect, would do very well to seek professional legal assistance at this point.

    Besides a flawed explanation of the changes in the law, the only constructive comment I see here is "don't bother, your fucked."
    Well, you're certainly welcome to present an 'unflawed' explanation. After all I'm a dancer, not a CPA or attorney !
    Last edited by Melonie; 09-05-2005 at 08:56 PM.

  9. #9
    God/dess Bunny's Avatar
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    Default Re: Bankruptcy

    I paid $1100 and I'm really happy I hired an attorney. You also might want to read on www.artofcredit.com. I got a lot of useful info about credit on that site.

  10. #10
    Veteran Member RachelleD's Avatar
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    Default Re: Bankruptcy

    Thank you very much I told her about the Nolo book, which is apparently better than the one she had. Anyway, thank you guys (Bunny, Stant, VenusGoddess, Melonie) for the excellent advice; this should help her a great deal.
    "She believed she could, so she did." -unknown

    **Rachelle**

  11. #11
    God/dess VenusGoddess's Avatar
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    Default Re: Bankruptcy

    Quote Originally Posted by RachelleD
    Thank you very much I told her about the Nolo book, which is apparently better than the one she had. Anyway, thank you guys (Bunny, Stant, VenusGoddess, Melonie) for the excellent advice; this should help her a great deal.
    No problem...but do remind her to get all of that stuff FILED with the court no later than 4:30pm on October 14th!! The 17th is a Monday, so the 14th is the last day to file and not be affected by the new laws!!

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