BANKRUPTCY

         We are bankruptcy attorneys!  Meaning bankruptcy is our primary area of practice.  We pride ourselves on our knowledge of bankruptcy law and we do our job well.  Bankruptcy is serious step that has real consequences.  Bankruptcy is also a relatively complicated area of law.  It is important that you choose to work with attorneys who have real experience practicing bankruptcy law.  We file hundreds of chapter 7 and chapter 13 bankruptcies each year.  Because we are a small, specialized law firm, we are able to offer lower prices than most St. Louis area attorneys without sacrificing quality of service.  When you call our office you will speak with an attorney, and when you come in you will sit down with an attorney.

WHAT IS BANKRUPTCY?

          BANKRUPTCY IS, IN ESSENCE, REACHING OUT TO THE FEDERAL COURT AND ASKING THE COURT TO HELP RELIEVE YOU OF YOUR DEBTS.  If you are in a position where you need the help, the court will grant you the relief you are eligible to receive under the bankruptcy laws.  In order to determine whether you qualify for bankruptcy relief, and what type (chapter 7 or chapter 13), you must disclose your entire financial situation to the court, going back several years.  The court wants to make sure that you do not make enough money that you could really pay your debts back yourself, and also make sure that you have no assets that you could potentially sell and use the proceeds to pay back your debts. 

          If your income is below the median income for your household size, and you do not have assets you could sell, you may qualify for a CHAPTER 7 bankruptcy, the simple wipe out (discharge) the debts you can wipe out and be done form of bankruptcy.  If your income is above the median income cutoff to qualify for a chapter 7, or you have assets you could potentially sell but cannot or do not want to sell, bankruptcy relief comes in the form of a CHAPTER 13 that may require you to pay back some of your debts before discharging other debts.  For some a chapter 13 may be designed solely to pay debts over time that you will have to pay anyway, debts that cannot be discharged in bankruptcy, but at reduced interest rates, through a monthly payment designed to be affordable instead of the payment required by the creditor.  See our pages on chapter 7 and chapter 13 for more information on how these types of bankruptcies work.

REASONS TO FILE BANKRUPTCY

          Bankruptcy should be a last resort when debt becomes overwhelming.  When you have no other options bankruptcy may be your way to start fresh and rebuild your credit.  For many it is a way to walk away from current debts and start with a clean slate (CHAPTER 7) For others bankruptcy allows you to pay certain debts over time (debts that you cannot discharge in bankruptcy and that you will have to pay anyway), without penalties, and at reduced interest rates, through a monthly payment you can afford, while not having to pay other debts.  (CHAPTER 13).

          There are BENEFITS to bankruptcy that debt relief programs and debt consolidation programs,  negotiations, and other approaches to debt relief cannot offer as they do not come with the backing and authority of the United States Court.  Reasons to file bankruptcy include:

  • DISCHARGE OF DEBTS

    • Bankruptcy allows you to "discharge" certain debts (see list of dischargeable debts).  A discharge is a court order that says the debts you had when you filed bankruptcy are no longer collectible.  Discharged debts will no longer affect your credit going forward.  A discharge is the goal of most bankruptcies.

  • STOPPING FORECLOSURE

    • Filing a bankruptcy can stop a foreclosure sale if filed at least 24 hours before the sale is scheduled.

  • STOPPING REPOSSESSION

    • Filing a bankruptcy will stop an impending repossession, or force an already repossessed automobile to be returned to you if filed within 10 days of the repossession, or before the vehicle is sold.

    • Understand you still may have to show that the vehicle is insured, and you still may have to pay a tow or storage fee before receiving the vehicle back.

  • STOPPING GARNISHMENTS AND LEVIES

    • Garnishments stop when a bankruptcy is filed (all garnishments not related to child support or criminal restitution).  Bank account levies may also be canceled if a bankruptcy is filed before the money is actually seized (your bank usually warns you about the date funds will be seized). 

    • Garnishments take about a week to be stopped by the attorney who originally placed it, the very next paycheck you receive after filing a bankruptcy might still be garnished! 

  • STOPPING LAWSUITS

    • Filing a bankruptcy will stop current lawsuits from proceeding, preventing judgments from being entered (important for your credit), and will prevent further lawsuits from being filed against you for anything that happened prior to filing the bankruptcy.

  • STOPPING COLLECTIONS & HARASSMENT

    • Creditors, including collection agencies, cannot contact you or try to collect debts from you once a bankruptcy is filed.  They must deal with us or the Court from then on, they have no choice.

  • STOPPING DEROGATORY REPORTING (AND ALL REPORTING) TO THE CREDIT REPORTING AGENCIES - TRANSUNION, EXPERIAN, EQUIFAX, & INNOVA

    • Filing a bankruptcy stops creditors from further reporting to the credit bureaus regarding your debts.  This means no more reported missed payments, late payments, or charge-offs.  Open accounts with debts must be marked as closed or included in bankruptcy, and will no longer affect your credit score moving forward, essentially leaving you with a cleaned slate.  The downside to not reporting to the credit bureaus is that if you keep your house or car and keep making the payments, your future on-time payments will not positively affect your credit score.  You will have to obtain some other form of credit after you file a bankruptcy to help rebuild your credit score.

  • FORCING CREDITORS TO ALLOW YOU TO PAY BACK CERTAIN DEBTS OVER TIME AND AT REDUCED INTEREST RATES (CHAPTER 13)

    • Certain non-dischargeable debts, such as priority tax debts, delinquencies on a mortgage or car loan when you want to keep your house or car, and child support or alimony arrears, i.e. debts that you cannot discharge, which you will have to pay back regardless of filing a bankruptcy, you are be able to pay back over time, at lower interest rates, through a set monthly payment to the Court that is designed to be a payment you can afford (chapter 13).

 

THE AUTOMATIC STAY

          The protections of bankruptcy take effect the moment you file.   Bankruptcies are filed online at our office.  When you file a bankruptcy the Court imposes what is called the "automatic stay."   This is the legal term for the Court stopping the current actions of your creditors and preventing them from doing anything further to try to collect debts from you.   The automatic stay is what stops foreclosure sales, stops garnishments, stops levies, stops lawsuits, stops harassment, forces creditors to accept lower monthly payments, forces creditors to let you pay your delinquencies over time, etc. 

         You can only receive this legal protection by filing bankruptcy, no other debt relief program or debt consolidation program may invoke the protections of the Automatic StayImportantly, such programs have the potential to do more harm than good to your credit score through non-binding negotiations and charge-offs, whereas the Automatic Stay legally prevents your current debts from further negatively affecting your credit scoreNo creditor is ever legally bound by any agreement made in any debt relief program, and many creditors will not even agree to participate in such programs!  No matter what any debt relief program represents, if you participate in a program that pays less than the minimum payments on your debts each month it will hurt your credit score.

          The automatic stay remains in place the entire time you are in a bankruptcy, and ends when the bankruptcy is over.  This means that debts that were not discharged in a bankruptcy can be collected again once the bankruptcy is over.

THE 2 TYPES OF BANKRUPTCY

          There are 2 types of bankruptcies that individuals and married couples (i.e. consumers) may file - CHAPTER 7 and CHAPTER 13.   They are simply named after the chapters of the United States Bankruptcy Code book where the laws are written.   It is important to understand the difference between the two types of bankruptcies, because based on each person's unique set of circumstances - the types of debt you have, the amount of debt you have, the assets you own, your income, your household size, past bankruptcy filings, etc. - one type of bankruptcy is always a better option than the other, or may be the only option you qualify for.  Chapter 7 and chapter 13 bankruptcies are filed for different reasons and have different costs.  Which type of bankruptcy to file is legal advice only a lawyer may help you with.  The goal of this website is to provide you with enough general information about both types of bankruptcy so you can at least get a rough idea of what your options might be.

 

ATTORNEY'S JOB

          When you hire an attorney we walk you through the process from start to finish.  Our job is to: inform you of the law and what your options are under the law, counsel you as to what we believe is in your financial best interest (not ours), help you strategically plan prior to filing, prepare all of your paperwork for you (no packets or forms to fill out), collect documents from you, and walk you through the entire process from consultation to court appearance to discharge.  Most importantly we represent you as attorneys in the United States Bankruptcy Court.  

YOUR JOB
          Bankruptcy, chapter 7 in particular, is mainly paperwork.  As attorneys we do 99% of the work for you.  Your job is to: answer our questions honestly, and get us the documents we ask you for.  

CAN YOU FILE WITHOUT AN ATTORNEY?
          Short answer: chapter 7 possibly, chapter 13 no.

          Bankruptcy is more complicated than it seems, and has real consequences, so we would never suggest anyone file without the help of an experienced attorney.  A chapter 7 bankruptcy may potentially be filed without an attorney - known as filing pro se.  Just like a CPA or tax specialist is not necessarily required to prepare your tax returns for you.  Just like taxes it can turn out relatively simple or it can get pretty complicated, depending on your circumstances.  However, for the same reasons you would hire any other professional to do a job that they are trained and insured to do, hiring an attorney to file a chapter 7 bankruptcy ensures everything is done correctly, the process goes smoothly, and will also relieve stress and save you hours of work!  

 

          Chapter 13 bankruptcy should never be filed without an attorney.  Chapter 13 bankruptcies should only be filed by experienced bankruptcy attorneys.  According to the Bar Association of Metropolitan St. Louis (BAMSL) the success rate of pro se chapter 13 bankruptcies is 0%.

IS BANKRUPTCY THE RIGHT CHOICE?

          The decision to file bankruptcy is yours alone.  You should consider the cost of filing compared to the amount of debt you will discharge.  You should consider the impact of filing on your credit score, and how it will impact your ability to get credit and financing in the future.  Is your current debt situation causing you hardship or hurting your credit?  If you have a large amount of debt but it is not affecting your life or your credit, and you are not being sued or garnished, or if you are collection proof - meaning your source of income cannot be garnished, such as Social Security, then filing bankruptcy might not be the right choice for you financially.  Bankruptcy is a serious step, not a decision to be taken lightly or be talked into, and again, should ultimately be a last resort.

          Call (314) 896-1999 to set up a free appointment to discuss your bankruptcy options!

LAW OFFICES OF KIMBER H. BARO - EXPERIENCED ST. LOUIS BANKRUPTCY ATTORNEYS - CHAPTER 7 & 13

LOCATED IN FLORISSANT - SERVICING ALL OF ST. LOUIS, ST. CHARLES & JEFFERSON COUNTY

BARO LAW FIRM

1605 N HWY 67

FLORISSANT, MO 63031

TEL: (314) 896-1999

FAX: (314) 942-7195

GENERAL EMAIL: abaro@barolawfirm.com

 

Website and content ©2018 by Baro Law Firm

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