Scales of Justice

Are you drowning in debt?
Bankruptcy can help.

Bankruptcy Fees

It is difficult for most attorneys to quote a fee for a bankruptcy filing without knowing something about the case. Some clients have only credit card debt and no other complications. Others have several mortgages, investment properties, tax issues and other difficulties. The attorney must also determine if a Chapter 7 filing is possible and the best course of action, or if a Chapter 13 or Chapter 11 is necessary. The fees vary accordingly.

Unfortunately, some firms quote a low fee to 'make the sale' but change that quote once you have committed. We do not support that practice. Here is some information that might help.

Most competent bankruptcy attorneys charge fees within a reasonable range. If you see an advertised fee that sounds too good to be true it probably is. With the collapse of the real estate market and declining economy many local lawyers with declining practices in other areas of the law are attempting to practice bankruptcy law to rebuild their firms. Since they have little or no bankruptcy experience they are advertising low fees to find clients. Some of these newcomers to the bankruptcy field are learning as they go. Some have never filed a case. Others have not filed a case for the advertised fee. Don't be fooled by low quoted rates. Make sure you retain competent counsel or it may cost you much more in the long run.

Recently we have noticed a much larger numbers of attorneys who appear to be new to the practice of bankruptcy attending meetings of creditors. We have observed cases in which exemptions were not properly utilized resulting in great expense or loss by the client, cases that should not have been filed because of nonexempt assets that are lost to the bankruptcy trustee, and many cases that are improperly handled and have to be dismissed or refiled.

A bankruptcy filing is a serious matter with potentially disastrous results. It should only be handled by an attorney with experience in bankruptcy and who knows the local bankruptcy judges, trustees and procedures.

If you have question contact info@bankruptcy.tips.

Chapter 13

A Chapter 13 bankruptcy, or "wage earner reorganization" is available only to individuals with regular income. It requires that the debtor file a plan providing for payment to creditors over a period of up to five years. For a local attorney who handles Chapter 13 bankruptcies visit www.flalawyer.com/chapter13.html. If you have question contact info@bankruptcy.tips.

The benefits of a Chapter 13 include the ability to stop foreclosure actions and reinstate a home mortgage that is in default, demand an LMM mediation session with your lender, stop IRS collection efforts while payments are made, the ability to retain non-exempt real estate and personal assets, and a broader form of discharge than in a Chapter 7. A Chapter 13 filing may also allow you to strip off second and third mortgages.

Chapter 13 may be a good choice for individuals with home mortgage problems. It allows significant time to reinstate a mortgage in default. It may allow individuals to retain investment properties and other assets that might be lost in a Chapter 7. It may be the only choice for those with too much income to qualify for a Chapter 7.

Dischargeability of Second Mortgages in Chapter 13

Most individuals are unaware that they may be able to discharge second and third mortgages in Chapter 13. If your home appraises for an amount less than your first mortgage balance you may be able to strip off all inferior mortgages in a Chapter 13. The second (and possibly third and forth) mortgage is considered unsecured and treated like any other unsecured debt. You may only have to pay pennies on the dollar to remove the mortgage. The lender is paid pro rata along with the other unsecured creditors and at the end of the plan the mortgage is stripped off the property. Most unsecured debt is also discharged. Call us to see if you qualify.

Mortgage Modification in Chapter 13

There is also a Loss Mitigation Mediation available in Chapter 13. The LMM program is a structured mediation session with oversight from the Court. It doesn't require the lender to agree to a modification or deed in lieu, but it forces them to show up at a session with a mediator. For a local attorney who handles Chapter 13 bankruptcies visit www.flalawyer.com/chapter13.html.

This article is not intended as a substitute for competent legal or accounting representation, but merely as a guide to help you decide whether you need the services of a licensed attorney or CPA.