Current Bankruptcy Law and the Need for Competent Representation

The bankruptcy process was made much more complicated in October of 2005 with the implementation of the new bankruptcy law, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005.

BAPCPA introduced several new “hurdles”, including the means test, a mandatory credit counseling briefing prior to filing bankruptcy for most, and a debtor education course before receiving a discharge of their debts. Hiring competent representation is a must, and cannot be underemphasized.

Automatic Stay

When an individual files for bankruptcy relief, their creditors must stop trying to collect. Creditors cannot continue to call you or send you collection letters. They cannot repossess your car or sue you. They cannot garnish your wages or levy your bank account, even if an order is already in effect. With very limited exceptions, the “automatic stay” prohibits all collection activity after you file for bankruptcy relief.
The automatic stay will generally stop all emergencies in the following situations:

• Foreclosure: If your house is in foreclosure and about to be sold, the automatic stay will stop the foreclosure action.

• Utility shut-offs: If your utilities have been shut-off or are about to be shut off, the automatic stay will force the utility company to maintain your service. Sometimes the utility company will require a deposit within a reasonable time after you file, which must be paid. If you do not provide adequate assurances of future payment, they may be able to turn off your lights and heat after the bankruptcy filing.

• Repossession: Lenders cannot take your vehicle while the automatic stay is in effect.

• Lawsuits/Garnishments: The bankruptcy filing stops wage garnishments and lawsuits immediately. The automatic stay protects your monthly income from your creditors. Assuming the debt is dischargeable in the bankruptcy, you will be able to eliminate that entire outstanding debt upon discharge.

• SSI/Food Stamps/Public Benefit Overpayments: If you received an overpayment of public assistance benefits, the agency can collect the overpayment absent a bankruptcy filing. The automatic stay stops the agency from collecting on the overpayment. Overpayment benefits are dischargeable in bankruptcy provided there was no fraud in obtaining the benefits in question.

• Tax Levies: The bankruptcy filing and automatic stay will temporarily stop the IRS from seizing your property to satisfy delinquent tax debts. If the taxes meet the requirements to be discharged under applicable bankruptcy law, they will be eliminated upon conclusion of the case.

The automatic stay will not stop the following actions:

• Criminal Proceedings: The automatic stay will not stop criminal proceedings.

• Support Actions: The automatic stay will not stop a lawsuit against you seeking to establish paternity or to establish, modify, or collect child support or maintenance.

• Domestic Violence: The automatic stay will not stop the commencement of a civil action regarding domestic violence.

The automatic stay will generally remain in effect until you complete the bankruptcy and receive a discharge, however there are certain instances where the stay terminates sooner, or where there is no stay at all.

Some People Think They Can’t Afford a Lawyer to File Bankruptcy

It costs you nothing to talk with us. We do not require a retainer fee to talk about your financial situation. $0.00 will file your case today. If you have been asking yourself, “Should I file bankruptcy?” Let us help.

We are available to discuss your options on filing bankruptcy whether it is day or night, weekday or weekend. Everyday, all day we make your financial worries our top priority.

• We complete all the paperwork.
• We request your tax transcripts.
• We offer in-office Credit Counseling.
• We obtain same-day Credit Reports.