Charlotte, NC Bankruptcy Attorney
Law Offices of Terry Duncan

Bankruptcy is the legal and honorable way to wipe out most of your debts.  Most persons file either a Chapter 7 or a Chapter 13 Bankruptcy.  Last year nearly 2 million persons in the United States filed Chapter 7 or 13 Bankruptcy.

• Chapter 7 Bankruptcy is known as a complete liquidation of most of your unsecured debts, including credit card debt.
   

• Chapter 13 Bankruptcy is a repayment plan for some of your debts.   Chapter 13 is usually filed if you are behind on your home or car payments and the creditors or mortgage company is threatening foreclosure of your home or repossession of your cars or the IRS is threatening you.

By using your legal rights in the Bankruptcy court, you can usually stop threatening phone calls, lawsuits, wage garnishments, and foreclosures.

One of the most common questions prospective new clients ask me is why should I pay an attorney like Terry Duncan to file bankruptcy for me?  All I would have to do is fill out some forms I can get over the internet or at Office Depot.  It sounds simple to me!

Contrary to popular belief bankruptcy law is very complicated.  A normal bankruptcy will consist of about 30 type written pages. Most licensed attorneys, with years of legal training, would not attempt to do a bankruptcy by themselves without prior experience.  I have seen people in court who represent themselves lose their homes, cars, etc. because of technicalities.  I can give the common example of being shot in the leg with a bullet.  You can pay a doctor to numb the area and correctly and safely remove the bullet and sew you up, or you can get a pocket knife and dig the bullet out of your own leg with no pain killer.  You could also save money and have one of your friends drill into a bad tooth, why go to the dentist! Which one would you chose?  Pay the small fee and have it done right by an attorney.  We have prepared thousands of bankruptcies for our clients.  Is it worth the risk of you attempting these court proceedings by yourself?

Chapter 7 Bankruptcy is used to eliminate most of your unsecured debts such as credit cards, medical bills, past repossession or foreclosure debts, most personal loans, bank loans, and sometimes old tax debts.  In Chapter 7, you must continue to make your regular home mortgage payments and car payments if you want to keep your home or car, or you may elect to give the car or house back to your creditors and you will not owe the creditor any money.  In Chapter 7 you are usually allowed to keep your home, if you are current on your mortgage payments and do not have excessive equity in your home. You are usually allowed to keep your car, clothes, furniture, retirement plans, and most other personal items.  The federal courts allow you to use what are known as "exemptions," which are usually based upon state law, to keep these personal items. 

Chapter 13 Bankruptcy is sometimes called a repayment plan or wage earners plan.  Usually the main purpose of a Chapter 13 is to stop the foreclosure of your home, the repossession of your car, or to stop IRS harassment and wage garnishments.  A chapter 13 plan is set up where you payback the amount you are behind on your mortgage, car payments, or taxes, and a small portion of your other debts, over a 3-5 year repayment plan in which you make monthly payments to a court appointed trustee.  You would continue to make your regular mortgage payments, in additional to your chapter 13 plan payments to the trustee.  In essence, this is similar in theory to a loan in which you could get caught back up on your home mortgage payments and save your home from foreclosure.  However, Chapter 13 normally does not redo your current house payments or lower your interest rate on your home.   You are also able to wipe out a large percentage of your unsecured debt such as creditor cards, medical bills, and personal loans. There are other benefits from filing Chapter 13.  Call us at 704-563-1224 during business hours and we will be glad to assist you or set up an appointment for you.

What debts can be eliminated by filing bankruptcy?

Most secured debts such as house and car payments cannot be eliminated in bankruptcy without surrendering (giving back) the house or car to your creditor.  Also most recent taxes that you owe cannot be eliminated (with very few exceptions).  Some older taxes, under certain circumstance, may be eliminated.  Also most student loans, child support, and alimony can not be eliminated.  If you owe someone money because you were driving while intoxicated, and injured that person, the debt usually cannot be eliminated in Bankruptcy.  Also if you have committed fraud on your creditors, or you have "run up" the credit cards immediately before filing, normally that debt cannot be eliminated in Bankruptcy.

The bill collectors are calling me day and night, at home and at work harassing me.  Will filing bankruptcy stop these harassing rude phone calls?

YES!  Once the bankruptcy is filed an "automatic stay" by the federal court goes into effect.  This is a court order from the federal judge ordering your creditors not to call you, sue you, garnish your wages, or harass you.  If they violate the judges order, they could be sanctioned (fined) by the court.

If my home is being foreclosed, can a Chapter 13 stop the foreclosure?

Normally the answer is yes!  One of the main purposes of a Chapter 13 is to stop the foreclosure on a home or the repossession of a car. However, you must show that your income is sufficient to make your Chapter 13 plan payments. You will pay back the amount you are behind over a 3-5 year payback plan making payments to the bankruptcy trustee.

I heard that the bankruptcy laws changed in October of 2005, what are the new changes?

There are several changes that will affect you if you file after the law change in October 2005.  Some of the changes require that you attend credit counseling before you actually file the bankruptcy.  You also will have to pass a "means test."  The means test will use a "formula" to determine if you are able to pay back a portion of your debts.  If your family makes more that the average income of a family in your state, you may be required to make monthly payments to pay back a small portion of your debts in a payback plan through the court.

I was told that if I filed bankruptcy, I could never get credit again for at least seven to ten years?

This is one of the false myths about bankruptcy!  Most people that file bankruptcy are obtaining credit several months after there discharge and final decree by the court.  A final decree is a court order stating that is case is over.  You can usually buy cars, houses, furniture, etc. on credit after the bankruptcy. You are probably thinking this sounds to good to be true.  However, the "catch" is that you will be paying high interest rates on this credit for the first few years after the bankruptcy.

If I file a Chapter 7, I was told that I would lose everything?

This is another myth.  Most of our clients are able to keep their homes, cars, furniture, retirement plans, etc.  Under the state exemption laws, most of your assets are protected from your creditors.  However if you have excessive equity on your house or car, you may have to pay back your creditors the excess equity.  Call us at 704-563-1224 for a consultation for more details.

Can I go out and buy an expensive house or car, then file bankruptcy and keep the car or house for free?

This would be a great world if we could do that, however in the real world these are secured debts, and if you file bankruptcy you must continue to make payments or give the house or car, etc. back to the creditors.

My house is being foreclosed, some companies are writing me letters stating that they can "negotiate" with my mortgage company and stop the foreclosure.  However, the companies want me to pay them a large amount of money "upfront" before they begin the negotiations.  Is this a legitimate way to stop the foreclosure of my house?

Be extra careful when dealing with these companies.  Most mortgage companies will not negotiate once the mortgage company has begun foreclosure.  They will usually refer you to their foreclosure attorneys who want all of the past payments to stop the foreclosure sale.  You can negotiate just as easy as one of these companies.  Usually these "mortgage negotiating" companies will take your money and call you a few days before the sale and tell you they could not work out a "deal".  They usually will not refund your money.  As a law firm, we force your mortgage company, through federal law, to allow you to get caught up on your mortgage payments through a Chapter 13.  It is usually non negotiable, the mortgage company must allow you to get caught up through the Chapter 13 plan and save your home.

I have heard that bankruptcy attorney's fees aren't cheap.  I am filing bankruptcy, how am I supposed to pay you? Remember I have financial problems, I have very little money!

We understand your financial dilemma.  We know that it is sometimes tough to make all of the attorney payments.  We do an easy payment plan, where you set up your own payment plan to pay the attorneys fees.  However, there is a court order from the judge in the Western District of North Carolina that says all of the attorneys fees must be paid before we can actually "file" the bankruptcy with the court.

Federal law requires us to disclose that we help people file for relief under the Bankruptcy Code. We are also required to tell you that you may file bankruptcy without the use of an attorney.

Thank you for reading these frequently asked questions and answers.

Give us a call we can make payment arrangements and help you even before we actually file the bankruptcy.  Call us at 704-563-1224 for details.

Please contact Terry Duncan today or use our free evaluation form.

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