Questions & Answers
How will bankruptcy affect my credit?
Well, bankruptcy is always a bad mark on your credit report, and it will stay on your credit report for seven to ten years. But, frankly, by the time most people seek bankruptcy, their credit report is already pretty bad - or will be so shortly! At that point, declaring bankruptcy sometimes can actually improve the credit report since, upon receiving your discharge, you are no longer legally liable for the discharged debts.
Will I ever be able to buy a house or car after I file bankruptcy?
Yes. You will be eligible for most VA and FHA loans, as well as many conventional mortgages, one to two years after your discharge. Many car lenders will finance a car for you immediately after your discharge, and in Chapter 13, often even during your plan, if the Chapter 13 Trustee approves. Please understand, however, that you will still need to otherwise qualify for these loans and you will probably be charged higher interest than a person with good credit - but you will be given the opportunity to begin rebuilding a good credit rating and to get a fresh start.
Will bankruptcy discharge ALL my debts?
Probably not. First, bankruptcy discharges your personal liability on unsecured debts - if you do not make payments on a secured debt, such as your house, car or furniture, that creditor still has the right to repossess its collateral. In Chapter 13, these secured debts can often be restructured or the past-due payments paid back through your Chapter 13 plan. Also, not ALL unsecured debts are dischargeable in bankruptcy. For example, many taxes, child or spousal support, most student loans, and restitution obligations are not dischargeable in any Chapter in bankruptcy, although they may be repaid through a Chapter 13 plan. In Chapter 7, there are even more debts that are not dischargeable. When you come in for your free consultation we will review these 'problem' debts and decide what Chapter will help you the most.
How quickly can I file bankruptcy?
Many attorneys respond "the same day you first see us". While this may be true, it may NOT be best for you. When you come to my office for your free consultation, we will review your problems and decide what best suits your needs.
How much will it cost?
That depends on your individual problems. But our legal fees are regulated by the Bankruptcy Courts to insure that they are fair and reasonable.
How can I pay for my bankruptcy?
I require that the Court filing fees, which are currently $185 - $200, be paid at the time your case is filed. I will work with you to establish a payment plan for my attorney's fees in Chapter 7 if you need it. And in Chapter 13 you may generally pay all or part of your legal fees through your plan.
And here's one question people rarely ask, but should: You're a bankruptcy attorney - you make a living by filing bankruptcies. Would you tell me if I didn't need a bankruptcy?
Yes! First, bankruptcy won’t solve every financial problem. Also, based on your income and expenses, you may NOT be able to solve all your problems within the framework of the Bankruptcy Code. In these cases, a bankruptcy won’t work. Beyond that, you may not need to file a bankruptcy to solve your financial problems. There may be other ways of dealing with the debts or at least to try to deal with the problems before you file a bankruptcy. Bankruptcy was designed to be a last resort in dealing with overwhelming financial problems, not a first choice for people who just don’t want to pay their debts. When you come to my office, we’ll review all your options and I may suggest other ways to attempt to deal with your problems if I think something else might work.
But honestly, by the time most people even begin to consider bankruptcy, they are in overwhelming financial trouble. They have already tried to deal with their debts – many have already been to consumer credit counseling services, withdrawn their savings and retirement accounts to pay down debt, withdrawn home equity or taken out bill consolidation loans. And still the problems remain, and the debts grow from late charges, penalties and accruing interest. Or the problem could be fixed if they could get out from under high car payments or give back the big-screen TV, but the creditors won’t let them out of their obligations. Or the IRS wants more money than they can pay without going further into debt on their other bills.
Most people file bankruptcy because something has happened to disrupt their former income – they lost a job or don’t make as much as they used to, or went through a divorce, or got hurt or sick – or maybe they had to help another family member financially. Several years a go, a book called “When Bad Things Happen to Good People” came out. Well, bankruptcy is for when bad financial things happen to people. And that’s when I can help.
Bonnie L. Johnson
Law Office of Bonnie L Johnson
6116 N. Central Expressway, Suite 110
Dallas, TX 75206
(214) 748-4848
(972) 263-5359
(214) 742-3520
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