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Bankruptcy Filing
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I Am Afraid To File Bankruptcy


  "I am afraid to file bankruptcy," is what I said to myself. I felt like a loser. I felt like I let everyone

   down, but in reality, it was a huge relief."


You're Not Alone

1.2 million Americans file for bankruptcy every year according to the Bankruptcy Institute. Yes, 1.2 million people run into financial hardship. That's about 10 out of every 1,000 Americans. Bankruptcy filing rates are the highest in middle age, with over 50% of debtors being between 35 and 54. Most common causes: overextended credit, reduction of income, unexpected expenses, job loss, illness/injury, divorce, birth/adoption of a child, death of a family member, retirement, and identity theft

Don't be embarrassed. Don't feel shamed. You did not fail. We hear stories like this all the time. "I did everything I could to avoid it. I cut back on spending. I sold stuff to make payments. I’ve been eating rice and beans for months now. But even with all the work, I’ve come to one painful conclusion — I may need to file bankruptcy." This is why we are here — to guide you through, and support you to start anew. First step, build a team of support around you to keep your mind and body in a good place. Next, educate yourself..

What is Bankruptcy?

Bankruptcy is a court proceeding where you tell a judge you can’t pay your debts. The judge and court trustee examine your assets and liabilities to decide whether to discharge those debts. If the court finds that you really have no means to pay back your debt, you declare bankruptcy. If "any" of your creditors dispute your testimony, they can launch an audit that makes Watergate look believable. Your credit score will plummet, and your friends and family may treat you like you have a contagious disease - hang out with losers, become a loser. It can be devastating.

The Good News​​

Bankruptcy can stop foreclosure on your home, repossession of property, or garnishment of your wages. Creditors suing you to place liens on your real estate come to a full stop. It will bring instant relief; no more collection calls. Bankruptcy puts a hold on everything, and will cancel out many—if not all—of your "unsecured" debts.

Important to Know: What is Secure Debt

Bankruptcy doesn’t clear:

  • Student loans

  • Government debts like taxes, fines or penalties

  • Child support and alimony

  • Expensive items purchased right before filing bankruptcy like cars, boats, or jewelry

  • Secured creditors on real estate

When you file for bankruptcy, creditors have to stop any effort to collect money from you, at least temporarily. Most creditors can’t write, call or sue you after you’ve filed. However, even if you declare bankruptcy, the courts can require you to pay back certain debts. Each bankruptcy case is unique, and only a court can decide the details of your own bankruptcy. The best news of all is that you will now have time to breathe and gather your bearings.


What are the main types of bankruptcy?

There are two main types of bankruptcy for consumers. You’ve probably heard of them: Chapter 13 and Chapter 7.


Chapter 13
Chapter 13 means the court approves a plan for you to repay some or all of your debts over three to five years. You get to keep your assets (stuff you own) and you’re given time to bring your mortgage up to date. You agree to a monthly payment plan and must follow a strict budget monitored by the court. This kind of bankruptcy stays on your credit report for seven (7) years.

Chapter 7
Chapter 7 means the court sells all your assets—with some exemptions—so you can pay back as much debt as possible. The remaining unpaid debt is erased. You could lose your home (or the equity you’ve put into it) and your car in the process, depending on what the court decides. You can only file Chapter 7 bankruptcy if the court decides your income is too low to pay back your debt. This type of bankruptcy stays on your credit report for ten (10) years.

You’ve probably heard of other types of bankruptcy, like Chapter 11. It’s typically reserved for businesses. You may also hear of Chapter 12 bankruptcy, which is for farmers and fishermen.

For specific information about bankruptcy laws in your area, visit the United States Courts website. There you’ll find information on the process and where to find help in your area. There is a bankruptcy court for each judicial district in the United States—90 districts in all.

Here are some things you need to know before you take the step toward bankruptcy.

What are the consequences of filing bankruptcy?
Let’s not sugarcoat it: Bankruptcy takes a huge emotional toll on a person. It ranks up there with divorce, loss of a loved one and business failure. Beyond the emotional impact, here are other effects of declaring bankruptcy:


Your bankruptcy becomes public domain.

This means your name and other personal information will appear in court records for the public to access. That’s right . . . potential employers, banks, clients and businesses can access the details of your bankruptcy.

Filing bankruptcy is expensive.

Filing fees for Chapter 13 bankruptcy will cost around $310 plus attorney fees, which can be anywhere from $1,500 to $6,000. For a Chapter 7 bankruptcy, you’ll shell out $335 for filing fees and $835 to $3,835 for an attorney. Also, as you sell real estate assets, the court may take a percentage fee of all real estate sales.


Buying a home could be more complicated.

Unless you pay cash for a home, it could take one to four years before you qualify for a mortgage loan.

What should I do before I file for bankruptcy?
Filing for bankruptcy is a big deal, so you don’t want to go into the process blind.


Here are some things you need to do before you take any action:

1. Organize your paperwork.
Make a list of all debts, from your mortgage to student loans to child support. For each of those debts, find paperwork to verify the amounts. If you talk to anyone (lawyer or financial coach), you’ll need this information.

2. Look at options.
Before you file, try your best to pay off your debts. Get on a bare-bones budget. Talk with creditors about lowering interest rates or getting better terms. Move to a smaller place. Get an extra job to pay the bills. You get the idea.

3. Try financial coaching.
A financial coach can give you a different, unbiased perspective on your financial situation. They can talk with you about alternatives to bankruptcy and create a customized plan to get you out of the red. And they can give you encouragement and that extra kick in the right direction!

4. Get professional help.
If you’ve done everything you can and still can’t get your head above water, bankruptcy may be your only option. Filing is complicated and involves lots of paperwork and the potential for mistakes. Working with a pro is your best option for walking through the process.


Build a team of advisors and supporters now, so you can improve your chances of success.

Build the right team who understand distressed clients

  • Lawyer referrals to those specializing in Ch. 7. vs. Ch. 11 vs. Ch.13

  • Debt consolidation

  • Estate Liquidation

  • IRS & Tax accounting 

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Even though I had to file for Ch. 13 bankruptcy, Bill was amazing. He listened to hours of calls, all hours of the day and weekends, reassuring me, and helping to work with my bankruptcy attorney to help me come out with as much as possible. I can't thank him enough.

Stephanie Davis

There was no way I was going to make it through COVID-19 without filing for bankruptcy with my business. I made the mistake of signing a personal guarantee on my business lease, and filed bankruptcy to manage the predatory landlord. Bill is doing a great job dealing with her while we try to save my home, where I raised my children. Cross your fingers for us.

Willie Rivera

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