Regain your financial footing and peace of mind.
Because You Deserve a Second Chance
Many people see bankruptcy as an end to their financial future. In reality, bankruptcy can be the beginning of a new financial future. If you are drowning in debt, having trouble paying your bills, or being harassed by creditors, you should speak with a lawyer today about filing for bankruptcy.
Geraldene Sherr Duswalt, Esq. can help. She cares about her clients and works hard to improve their lives. Call today to learn about your options and rights, and schedule a free bankruptcy consultation and case evaluation.
Overview of Chapter 7 & Chapter 13 Bankruptcy
Steps to Prepare for Bankruptcy
Before filing bankruptcy under any chapter, there are steps you should take:
1. Hire an experienced, competent bankruptcy lawyer to advise you regarding what bankruptcy will do and not do for you, and to fill in all necessary forms and documents.
2. Withdraw your funds from banks or credit unions to whom you owe money. Once bankruptcy is filed, they may exercise their right and seize some or all of your money, depending on what you owe them.
3. Stop using your credit cards and do not incur any more debt.
4. Stop paying debts that will be discharged by bankruptcy. This includes unsecured debt such as credit cards, provided that you have not “loaded up” on a particular credit card during the 6-month period prior to filing bankruptcy. A credit card lender will typically scrutinize—and possibly act on—an account if there has been $1,200 to $1,500 of “new money” (ie., charges or cash advances, not including balance transfers) put on the account within said 6-month period.
5. If you have “loaded up” on a particular credit card, you should probably make the minimum monthly payment unless the minimum amount is exorbitant.
6. Stop paying off debts to family and friends. A Chapter 7 bankruptcy trustee might pursue the friend or family member to recover the funds. In a Chapter 13 bankruptcy you might have to pay the Trustee an equal amount of what you paid the friend or family member.
7. Save all pay stubs received from employers in the past 7 months or obtain a detailed printout of your salary over the past 7 months with itemized deductions.
8. Prepare and file federal or state income taxes that are past due.
Things to Avoid Prior to Filing Bankruptcy
1. Do not load up on credit cards once you have decided to file bankruptcy. Debts for “luxury goods and services” over $550.00 within 90 days of filing bankruptcy will not be discharged. Neither will “cash advances” of more than $825.00 on a single card within 70 days of filing bankruptcy.
2. Do not liquidate your retirement accounts (pensions, 401K, etc.) to pay off debt. These accounts are generally exempt during bankruptcy and you will need that money to survive in your later years during retirement.
3. Do not transfer property out of your name for little or no payment. A Bankruptcy Trustee can undo the transfer and return the title back to your name. In New York, a Trustee can undo transfers up to six years prior to filing bankruptcy. If you have transferred assets make sure you received fair market value for them.
4. After you have decided to file bankruptcy, do not ignore lawsuit papers served on you. Because it will take awhile to file your bankruptcy, a creditor could obtain a judgment against you and start garnishing your salary before bankruptcy goes into effect.
5. Most importantly, do not forget to tell your bankruptcy attorney about all of your assets and anything else relevant to your case. Incomplete or inaccurate disclosure in a bankruptcy can result in failure to discharge your debt or (in extreme cases) criminal prosecution.
Mechanics of Bankruptcy Relief
A bankruptcy petition is considered “filed” when it is completed, signed and either electronically filed over the Internet with the court on the court’s CM/ECF docket or delivered to the Court Clerk’s Office at Bankruptcy Court.
For the most part, filing the bankruptcy petition creates the “Automatic Stay” which is the legal action that protects you from creditors and their collection efforts. We obtain the information for your petition during your consultations with us.
Before filing the petition, creditors are free to hound you, but it has been our experience that creditors stop calling when you advise them you have retained a bankruptcy lawyer. However, do not tell a creditor you have retained our services until you have paid us a retainer. Never tell a bank that you have retained a bankruptcy lawyer if you have funds in your bank account. The bank may seize your money.
Meeting of Creditors
A creditors meeting—also known as a 341 hearing—is held between 20-40 days after your bankruptcy petition is filed. It is held at the U.S. Trustee’s Office in Poughkeepsie, New York. The meeting usually lasts about 5 minutes, and we will appear with you at the meeting. Eight meetings are usually scheduled for a one-half hour time slot, so sometimes meetings run behind schedule. The Trustee will ask you a few questions under oath about your assets and certain information revealed in your petition. Creditors may attend these meetings, but few actually do.
Bring with you to the meeting:
1. An official picture ID, such as a driver’s license
2. Proof of your Social Security number, such as your Social Security card.
A bankruptcy “discharge” means you are free and clear of having to pay certain debts. Creditors holding an unsecured claim will no longer be able to collect your debt. Unless objections are filed or something unusual happens with your case, in a Chapter 7 bankruptcy, your discharge is entered 60 days following the initially scheduled Meeting of Creditors. In a Chapter 13 case your discharge is entered after all required payments have been made to the Chapter 13 Trustee.
A discharge is the “fresh start” you have heard about connected with bankruptcy. However, whatever difficulty with finances led you to file bankruptcy may still have to be solved. Hopefully you have learned from your mistakes and know how to avoid similar pitfalls in the future.
Debunking Bankruptcy Myths
I have had countless office consultations with clients regarding bankruptcy, and one thing that is quite evident is that they often have many misconceptions about bankruptcy. Their misconceptions are usually the result of seeking advice from people who are not bankruptcy experts. There is a good chance that you have heard some of these myths yourself:
Bankruptcy Myth #1:
There is no more bankruptcy, because the new law eliminated it.
Nothing could be further from the truth. You can do virtually everything under the new law that you could under the old law.
Bankruptcy Myth #2:
Everyone will know that you filed for bankruptcy.
Unless you are a famous person and the filing is picked up by the media, the only people who usually know of your bankruptcy are you and your creditors. While bankruptcy filings are public records available to anyone, few people access court records to determine who has recently filed.
Bankruptcy Myth #3:
You will lose everything you have.
Most people lose nothing in a bankruptcy filing because their assets are exempt. After consultation with an experienced attorney, if it appears that you are going to lose a treasured asset, you do not have to file. In almost all instances, a bankruptcy filing is a voluntary act.
Bankruptcy Myth #4:
You will never be able to own anything again.
This is completely false. In the future, you can buy, own and possess whatever you can afford.
Bankruptcy Myth #5:
You will never get credit again.
You will certainly receive credit offers after bankruptcy, usually at higher interest rates. Because your debt is gone, your “debt to income ratio” will have improved considerably, and lenders always look at this. If you maintain steady employment and stay current on your existing bills, your credit rating will improve with the passage of time.
Bankruptcy Myth #6:
If you are married, both spouses have to file.
Not true. If only one spouse is in debt, there is no reason for both to file. However, if there is joint debt involved, and only one spouse files, the non-filing spouse will remain fully liable for the debt.
Bankruptcy Myth #7:
It is really hard to file for bankruptcy.
Filing for bankruptcy is actually pretty easy…if you have retained the services of an experienced and capable bankruptcy attorney. While the decision to file may be a difficult one, we help make the actual process of filing for bankruptcy as straightforward and pleasant as possible for all of our clients.
Bankruptcy Myth #8:
Only “deadbeats” file for bankruptcy.
Actually, “deadbeats” rarely file for bankruptcy. They simply work “off the books” somewhere, have unlisted phone numbers and never get ulcers worrying about their shaky finances. The people who file for bankruptcy are good people who are simply getting “beaten up” by real life, such as a divorce, job loss, serious illness, failed business, an unexpected family emergency, or those who fall in debt when they are “young and foolish”, before they know any better.
Bankruptcy Myth #9:
You do not have to include all of your assets and all of your debts when you file for bankruptcy.
In bankruptcy you cannot “pick and choose” which creditors you will list. You have to list all creditors. You also have to list all of your assets. To do otherwise is to commit bankruptcy fraud, which is definitely not a good thing.
Bankruptcy Myth #10:
You cannot get rid of back taxes through bankruptcy.
Income taxes that are more than three years old can be discharged in bankruptcy. However – recent income taxes (ie. less than 3 years old) cannot be discharged, and “trust fund” taxes (withholding, sales tax, etc.) can never be discharged.
Bankruptcy Myth #11:
You can only file for Chapter 7 once.
Not true. You can file a Chapter 7 bankruptcy once every eight years, although hopefully you will not have to avail yourself of this right.
Bankruptcy Myth #12:
Creditors can still harass you and your family, after you file for bankruptcy.
Not true. With very few exceptions, the Automatic Stay created by the act of filing for bankruptcy causes all creditors activity to cease immediately.
Bankruptcy Myth #13:
You can max out your credit cards prior to filing for bankruptcy, and not suffer any consequences.
Not true. Bankruptcy is a friend to the honest debtor, but the system does not condone fraudulent behavior.
Get A Fresh Start
The above misconceptions, and many others, can and will be cleared up after your Free Bankruptcy Consultation with our office. Let us help you regain your financial stability and give you the fresh start you need to get your finances and your life back in order.
Schedule a Consultation
Let our experience, dedication and compassion work for you. Contact Geraldene Sherr Duswalt, Esq. to set up an appointment. All telephone calls and e-mails will be answered promptly.
There is no charge for the initial telephone call and all calls will be returned by an attorney.
New Jersey Office
Law Office of Geraldene Sherr Duswalt
1812 Front Street
Scotch Plains, NJ 07076
New York Office
Law Office of Geraldene Sherr Duswalt
576 Fifth Ave, Suite 903
New York, NY 10036
Mon - Fri: 8am - 6pm
Weekends flexible by appointment