BANKRUPTCY FAQs

1.  What is your experience in bankruptcy law?

Attorney Jeffrey S. Walters has been a bankruptcy attorney for over 25 years.  We are intimately familiar with all aspects of bankruptcy.  Attorney Jeff Walters is admitted to practice in all of the United States Bankruptcy Courts in New Jersey.  We have the latest technology to assist you, and we participate in the Bankruptcy Court’s Electronic Case Filing System (ECF).  This allows us access to the Court’s system to file your case electronically.  We are able to obtain a case number and proof of filing instantly.  We are also able to obtain information about your case electronically and in “real time.”

2.  How do I start the bankruptcy process?

Just give us a call.  You will speak directly with attorney Jeff Walters.  We will then make an appointment for a free consultation.  Contact us by clicking here.

3.  What do I need to bring to my appointment?

Nothing special.  If you have been sued, it would be nice if you could bring the lawsuit papers with you, but it is not imperative.  When you come in, we will sit down to discuss your matter and how we will help you.  Once you decide to proceed, we will provide you with a checklist of the items that you need to gather.  It’s that simple.

4.  What are some of the items I will need to gather once I hire you to help me?

The items on your checklist will include: (1) Income tax returns for the past two years; (2) pay stubs for the past six months; (3) most recent mortgage statement for your mortgage (if you have a mortgage); (4) a list of all of your debts, or copies of the most recent bills such as credit card bills, medical bills, etc.

5.  When will creditors stop bothering me?

As soon as you come to our office and hire us, you can start giving creditors our name and number when they call you.  Tell them you have hired us, give them our name and number, and then hang up.  They will then call us and we will deal with them, and they will leave you alone.

6.  Can I file bankruptcy without an attorney?

Sure.  But there are strong advantages to having an experienced attorney represent you.  Look at it this way: You can try to replace your hot water heater without a plumber.  You will probably spend hours and hours trying  to learn how to do it by reading books and searching the internet.  You will probably spend all your time trying to figure it out when you should be working at your job or spending time with your family.  Then it will take you 10 times as long as an experienced plumber to do the job, if you can find the proper tools, and you will probably make a lot of mistakes and not do a professional job.  You may even cause damage and make things worse.  If you hire a professional to do the job, the professional has a truck stocked with all of the proper tools and has done the job hundreds of times before.  The professional will do the job properly and in a professional manner, and will guarantee the job.

When you retain an experienced attorney at the Law Offices of Jeffrey S. Walters, you will obtain the benefit of our advice and counseling.  We handle matters like yours for a living.  It is what we do.  We will identify issues which you do not even know are important.  It takes experience and specialized knowledge to analyze your situation properly and to come up with a plan of action.  It also takes experience to prepare a bankruptcy petition, which is usually 40-50 pages.  We guide you from start to finish, do everything properly, attend the meeting of creditors with you, and provide the Trustee with all necessary items and information.  In a Chapter 13, we also prepare your Chapter 13 Plan and attend a Confirmation Hearing in court.  While we are handling your matter professionally, you can be devoting your time to your employment and your family, secure in the knowledge that you have an experienced attorney handling things for you.  Let us help you.  Contact us today.

7.  What debts can be wiped out by bankruptcy?

Usually, you will be struggling with debts such as credit cards, store cards, medical bills and personal loans.  Typically, they will all be wiped out (“discharged”).  Debts that are not discharged include child support and alimony.

8.  Since my debts will be wiped out, can I go on a shopping spree right before I file for Bankruptcy Relief?

No.  If you run up your credit card bills shortly before filing for bankruptcy relief, that may be considered an abuse of the system.  The U.S. Trustee’s office may object to your debts being discharged if they feel there has been abuse.  Also, a particular creditor may object to that particular debt being discharged.  So long as there is no abuse, a creditor cannot object just because they do not like the fact that your debt will be wiped out.  After all, that is what Bankruptcy Law is for.

9.  So if debts get wiped out, does that mean I can keep my house for free?

No.  Unlike credit card debts, medical bills or personal loans (all of which are unsecured by collateral), a mortgage loan is secured by a Mortgage on your house.  In other words, when you borrowed money to purchase or refinance your house, you signed a Mortgage which made the house collateral for the loan.  The same holds true for a car loan, where you probably gave the lender a security interest in the car.  Therefore, if you want to keep your house, the mortgage will remain.  If you do not want to keep your house, any amount that you still owe on the mortgage will be wiped out.  If you are behind on your mortgage, we can help you save your home, and at the same time get rid of your credit card debts, medical bills and personal loans.  Keep on reading, and also read about Chapter 13.

10.  Will I lose any of my property?

Again, this is why you need a bankruptcy attorney, with the expertise to plan things so that you keep all of your property.  The law provides that you can keep a certain amount of property.  This is called an “exemption.”  The law sets forth various categories of exemptions and dollar amounts for each category.  Depending on your property, you may need to resort to more than one exemption in order to shield it entirely.  This is where effective bankruptcy planning is important, and effective knowledge of the bankruptcy code and the use of exemptions which an experienced bankruptcy attorney is familiar with.  The goal in every case is to prepare your Bankruptcy Petition so that you may keep all of your property and just wipe out all of your debts.  If you do have too much property, an experienced bankruptcy attorney will detect this before you file, and will discuss other ways to protect your property such as pre-bankruptcy planning or a Chapter 13 where you keep all of your property.  When you come in for a consultation, we will analyze your situation and explain everything to you.  Take advantage of our expertise.  Call us for a free consultation.

11.  I keep hearing about my “equity” in my house.  What does “equity” mean?

Equity is defined as the value of your house minus the amount due on any mortgage.  For example, let’s say a Realtor gives you an opinion that your house is worth $150,000.  Let’s say the amount due on your mortgage (i.e. the “payoff amount”) is $140,000.  Your equity would be $10,000 ($150,000 minus $140,000).

12.  What is negative equity?

Negative equity is the term used when your house is worth less than the amount due on your mortgage.  Let’s say you bought your house for $200,000 and took out a mortgage for $190,000.  Let’s say a few years later the real estate market fell and your house is worth only $160,000.  In those few years of paying the mortgage you may have reduced your mortgage balance from $190,000 to $188,000.  So now the property is worth $160,000 and the mortgage payoff is $188,000.  You do not have any equity in your house.  In fact, you have negative equity.  Some people refer to this as being “upside down” on your mortgage.  This is a very big problem today, and the reason why so many people are unable to refinance their mortgage loans and are facing foreclosure.

13.  Is my house safe if I file bankruptcy?

Typically, your house is fully protected.  The law lets you keep up to $20,200 of the equity you have in your house (see definition of equity, above).  If you and your spouse jointly own your house and file a joint bankruptcy, then this amount is doubled, and you may keep up to $40,400 of the equity.  Therefore, too much equity is usually not an issue for most people who are considering bankruptcy, especially today when property values have fallen so drastically resulting in very little equity or even negative equity.  If your equity is more than $20,200 (or $40,400 if you are married and filing jointly), an experienced attorney still has techniques which may still shield all of your equity even if it is over the exemption amount.  You do not need to be concerned with these details.  Attorney Jeffrey S. Walters is an experienced bankruptcy attorney with over 17 years of experience with these issues, and will insure that you get the very best result to get your life and finances back under control.

14.  What if I have too much equity in my house?

That is not a problem.  It simply means that we will evaluate options other than Chapter 7.  Instead, Chapter 13 would be considered.  We will carefully analyze how things would work out under both Chapter 7 and Chapter 13 and compare the benefits of each.  Such an analysis can only be performed by an experienced bankruptcy attorney.  Whichever way results in you keeping all of your property and has the most attractive financial benefit for you and your budget is the route which would be considered.  Attorney Jeffrey S. Walters has over 17 years of experience analyzing people’s situations and helping them save their homes and minimize their monthly payments.

15.  What about my car?  Will I lose my car in bankruptcy?

Generally, you may keep your car.  Bankruptcy law allows you to keep your car so long as your equity is not more than $3,225.  Equity means the value of the vehicle minus the payoff on the loan.  Commonly, your vehicle depreciates in value so much that you probably will have very little equity or even no equity.  Therefore, most people keep their cars without any problem.  If your equity is more than this amount, there are other provisions it the law which allow you to increase your exemption by using the amount left over from another category of exemption.  If this still results in your equity being too much, then your car can still be protected by working out an arrangement with the Trustee in a Chapter 7 or most definitely in a Chapter 13.  Attorney Jeffrey S. Walters is an experienced bankruptcy attorney with over 17 years of experience with these issues.

16.  What about my retirement plans?

Your 401(k), pension, IRA and SIMPLE IRA will be fully protected.

17.  Can I stop foreclosure proceedings or a sheriff’s sale (aka foreclosure sale)?

Yes.  It is extremely important that you contact us right away if you are facing foreclosure.  It is imperative that you contact us before a sheriff’s sale takes place.

 

18.  What if a sheriff’s sale is tomorrow and I have not called an attorney yet?

Call us immediately.  The Law Offices of Jeffrey S. Walters participates in the Bankruptcy Court’s Electronic Case Filing System (ECF).  This means that we have access to the Court’s filing system and can instantly file your case electronically.  This will immediately trigger an “automatic stay” which will force your creditors to stop any action they are taking against you.  Our access to the Court’s Electronic Case Filing System means that we obtain your case number and proof of filing immediately.  We are prepared to assist our clients with emergency filings, which may be necessary in order to stop a sheriff’s sale or a repossession which is about to occur.

19.  How long does it take to complete a Chapter 7 case?

After we file your Bankruptcy Petition, you will obtain instant relief in the form of an “automatic stay” which stops creditors from taking any action against you or continuing any action against you.  Approximately 25 days later, attorney Jeff Walters will accompany you to a meeting which takes place before a Trustee appointed by the U.S. Trustee’s office.  We will thoroughly prepare you for that meeting and we will prepare and compile all necessary documents.  Attorney Jeff Walters will represent you at the meeting.  Approximately two months later, you will receive a court order letting you know that your debts have been discharged (“wiped out”).  In short, you are protected from the moment we file your Bankruptcy Petition, and your debts will be officially wiped out about 90 days after we file your Bankruptcy Petition.

20.  How long does it take to complete a Chapter 13 case?

A Chapter 13 plan is usually confirmed in 5-6 months.  You then simply make payments in accordance with your Chapter 13 Plan, which usually provides that you will cure your mortgage arrears over a period of 3 to 5 years.  If you desire to sell your house or refinance your mortgage, you can complete your Plan earlier.  The “automatic stay” protects you from creditor harassment during that time.  When you complete your plan, your debts are officially wiped out (“discharged”).

21.  What about student loans?  Can they be wiped out?

Technically, yes.  But Congress has given student loans special treatment and they usually will not be wiped out.  However, since all your other debts will be wiped out, your budget after bankruptcy should allow you to comfortably deal with your student loans.

22.  Can I discharge income tax that I owe to the IRS?

Maybe.  It depends on how long you have owed the money.  Generally, if you have owed the money for more than three years, the tax debt may be discharged.  Your specific situation would need to be evaluated.

23.  I owe money to my uncle, brother or some other relative.  Can I still pay them back?

After your bankruptcy, you are free to voluntarily pay back a debt if you choose to do so.

24.  Do I have to attend any proceedings?

Yes.  Approximately 25 days after we file your bankruptcy petition, you need to attend a proceeding called a “341 meeting of creditors.” Attorney Jeff Walters will accompany you to this meeting, which takes place before a Trustee appointed by the U.S. Trustee’s office.  We will thoroughly prepare you for that meeting and we will prepare and compile all necessary documents.  Attorney Jeff Walters will represent you at the meeting.  In a Chapter 13 proceeding, there is also a proceeding which takes place in a courtroom at the United States Bankruptcy Court.  This is called a “Confirmation Hearing.”  We will prepare your case for confirmation and attend that hearing on your behalf.  You will not need to attend.  We will take care of everything for you.  That is another positive aspect of having an attorney represent you, since you will not need to take off from work to attend this hearing.

25.  How long will bankruptcy be reported on my credit report?

A Bankruptcy filing will remain on your credit report for ten (10) years.

26.  Will filing for bankruptcy be bad for my credit report?

Chances are, if you have a lot of debts already and you are having trouble paying them, your credit is already suffering.  Actually, once you file for bankruptcy relief and wipe out all of your unsecured debts, you will probably improve your credit.  You will be a better credit risk than you were before.  This is because you will not have any debt and will have obtained a fresh start.  Our clients report that after obtaining their bankruptcy discharge, they begin to receive many credit card offers.  Of course, you should refrain from taking advantage of them and should try to reinforce positive financial habits once you have obtained a fresh start.

27.  What are some alternatives to bankruptcy to deal with my debts?

If your problems stem from credit card debt, you can consider negotiating with the credit card companies to try to reduce your balances and enter into payment arrangements.  Some of our clients ask us to negotiate with their credit cards companies for them.  This may be successful if you do not have a large number of creditors.  If you have a lot of creditors, if may be difficult getting them all to agree to work with you.  It may not do you any good if some will work with you but others will not, since the ones that will not are still apt to harass you and sue you which may cause you to seek bankruptcy anyway.  Some clients consider refinancing their mortgage to pay their credit cards.  That can be dangerous, since they are transforming unsecured debts into secured debts and putting their house at risk when it was not at risk initially.  Some clients consider that a bankruptcy filing is the easiest route to simply wipe out their debts and obtain a fresh start.

28.  What are some alternatives to bankruptcy if I am behind on my mortgage?

If your problems stem from falling behind on your mortgage, you can contact your mortgage lender’s home retention department to see if they are willing to modify your mortgage or enter into a repayment arrangement.  We can assist you with negotiation.  Some people find that their lenders will only allow them to “catch up” their missed payments over six months or one year.  Unfortunately, many people find that their budget does not make this possible.  A Chapter 13 Bankruptcy will allow you to “catch up” on your missed payments over five years.  This is a lot easier on your budget, and bankruptcy law forces your mortgage lender to accept this whether they like it or not.

29.  If I can’t even pay my debts now, how will I be able to pay a lawyer to help me?

When you come in for a free consultation, we will discuss your situation.  If you decide that pursuing bankruptcy relief is best for you, we will discuss that you should stop making any payments on your credit cards.  After all, they will be getting wiped out anyway.  Whatever you were devoting toward those bills each month can be used toward retaining an attorney to help you.  We also offer our clients a payment plan so that you can pay us a bit at a time as you are able.  Finally, if you are pursuing a Chapter 13 filing, a portion of the fee may be placed in your Chapter 13 Plan and paid over a period of five years.

30.  What kind of service will I get from you?

We will provide you with the highest quality of service.  When you call our firm, our friendly receptionist will answer your call and transfer you to bankruptcy attorney Jeffrey Walters.  Yes, that’s right, you will actually speak to an attorney immediately.  Attorney Jeff Walters will chat with you about your matter, and make an appointment with you.  You will immediately feel comfortable that you have found a caring and experienced attorney.  If Jeff happens to be on the phone or in court when you call, our friendly receptionist will take a message and attorney Jeff Walters will return your call promptly.  Your call will usually be returned in a matter of minutes.  Attorney Jeff Walters will personally handle your matter.  Your case will not be handled by paralegals or secretaries, where you barely meet or speak to the attorney except at the Trustee meeting.  Rather, attorney Jeff Walters will be in constant contact with you throughout your matter.  When your matter is concluded, and if you call us with follow-up questions, you will be given just as much attention as you were given beforehand.  We also hope that we have formed a relationship with you, and that you will consider us to be your “family lawyer” whenever you might need assistance.

We are a debt relief agency.  We help people file for bankruptcy relief under the Bankruptcy Code.