Sawin, Shea & Des Jardines

One of the last places that people want to be is sitting across from me while we discuss options for their financial future. Many times some common misconceptions or fear about the bankruptcy process increase this anxiety, or worse, keep them from coming in to explore their legal options at all. I have compiled a list of some common reasons people resist getting a fresh start in bankruptcy.

Filing a bankruptcy will cause us embarrassment or make us feel ashamed.

We strive to keep the fact that an individual or couple has filed a bankruptcy as private as possible. While a bankruptcy filing is a matter of public record, the days of bankruptcy notices appearing in the local paper is largely a thing of the past. Most social stigmas about bankruptcy are from a time well past, when people obtained credit from a small local bank or other local institution, not a multi billion dollar global corporation. I often advise my client that the need to file a bankruptcy is a financial matter, not a moral one.

I will never get credit again if I file a bankruptcy.

I never tell clients that bankruptcy makes their credit better. However, in the vast majority of cases that I handle, bankruptcy gives my client an opportunity to start making their credit better. Bankruptcy stops creditors from continuing to report ongoing negative information and provides a platform to start rebuilding credit. My clients are often getting good rates for cars and houses two to three years after their bankruptcy.

I will lose things I want to keep if I file a bankruptcy.

My main focus in helping people with bankruptcy is asset protection. In other words, helping people hang onto things that they want to keep while helping them get out from under things that they can’t afford. It is certainly possible, in fact common, for people to keep all of their things while still receiving a discharge of a majority or all of their debts. An experienced Indiana bankruptcy attorney can help determine the best course of action to help you hang onto the stuff you want to keep through the bankruptcy process.

I am worried that I can’t afford bankruptcy.

I generally advise my clients to think about what it will cost them if they do not file a bankruptcy. Wage or bank account garnishments can make it impossible to pay rent or your mortgage. Cars can be repossessed. We work with our clients to provide affordable options and can, in some circumstances, file a bankruptcy and get people under the Bankruptcy Court’s protection for little or no attorney fees down.

Please feel free to call us now at 317-759-1483 or send us an email to schedule a free consultation with an attorney to review your personal situation.

A cosigned debt is a debt where one or more person guarantees that that the primary borrower will pay the debt. Legally, a cosigner or co-debtor is equally responsible on the debt. If the primary borrower does not pay the debt, the creditor or lender can pursue the cosigner for the debt. Late or missed payments affect the cosigner’s credit the same way that it affects the credit of the primary borrower. The effect that a bankruptcy has on a cosigned debt and/or cosigner depends on the type of bankruptcy.

In a Chapter 7 bankruptcy or straight bankruptcy the Debtor (person filing bankruptcy) asks the Court to issue a discharge on debts. This discharge legally eliminates the creditor’s rights to collect from the debtor. The cosigner does not receive the same benefit from the bankruptcy. The cosigner may then be stuck paying the debt. There are options that a Chapter 7 debtor or the cosigner can pursue to deal with the debt.

If the cosigned debt is a secured debt such as a mortgage loan or a car loan, the debtor in a Chapter 7 bankruptcy may protect a cosigner by agreeing to keep paying to keep the collateral (the house or car). With other types of cosigned debts the cosigner can maintain the payments and a debtor in bankruptcy may informally agree to pay them back after the bankruptcy proceeding is over. The cosigner may also discharge the debt in a bankruptcy if they so choose.

In a Chapter 13 bankruptcy the debtor asks the Court to approve a 3 to5 year reorganization plan. As part of the Chapter 13 reorganization bankruptcy a debtor may be able to protect a cosigner using what’s called the co-debtor stay. This Court ordered protection keeps creditors from pursing the cosigner for the debt as long as the debtor in bankruptcy has fashioned their plan to pay the cosigned debt through their plan. This Court ordered protection does not work with business debts or with debts from which the cosigner received the majority of the benefit.

The strategies and rules that go into helping people in bankruptcy achieve their goals vary from person to person. A consultation with an experienced bankruptcy lawyer is a critical first step in achieving your fresh start.

Please feel free to call us now at 317-759-1483 or send us an email to schedule a free consultation with an attorney to review your personal situation.

Many of the clients that I see have waited to come in to talk to me about bankruptcy after something financially devastating happens, such as a wage garnishment, foreclosure, or repossession. I understand that the last place a person wants to be is in my office talking about bankruptcy. I hear from my clients on a regular basis that they feel so much better after coming in to talk with us. Many wonder why they waited so long to come in and feel a substantial amount of relief.

Most people think about bankruptcy only as a way to get out of debt. I, however, view bankruptcy as a legal tool that you have at your disposal to help you save assets. Waiting too long to speak with an experienced bankruptcy attorney may mean that your creditors have a change to take things from you such as your bank accounts, wages, house, or car. Things that you need to support yourself and your family.

I regularly see clients that have tried desperately to avoid filing bankruptcy by doing things against their own best financial interest. Some have taken out second mortgages, attaching debts that I could have gotten rid of in bankruptcy to a house that they want to keep. Some have depleted retirement accounts that they could have kept if they filed bankruptcy. Many others wait until their wages are being garnished, causing them to fall into foreclosure or eviction.

So, when should a person file bankruptcy? Well, that is different in every case. Certainly if you have been sued in Court for debt(s) it is time to seriously consider bankruptcy. If a wage or bank account garnishment is in place, bankruptcy is generally your only option to stop these actions.

I would suggest, however, that a more proactive approach is better. If you are struggling under a load of debt, do yourself a favor and talk with an experienced bankruptcy attorney about your options. These consultations are usually free of charge and no obligation.

Please feel free to call us now at 317-759-1483 or send us an email to schedule a free consultation with an attorney to review your personal situation.

It is technically possible for a person or couple to file for bankruptcy without an attorney.

Would I ever advise anybody file a pro-se bankruptcy (pro–se means on their own, without an attorney)?

The answer is a resounding NO. Why? The answer lays in the very definition of pro-se. In all the important decisions regarding the filing you are on your own. In any legal issues that appear in the case you are on you own. In all aspects of the process past, present, and future you are on your own.

The bankruptcy laws are complex and the filing process complicated. An experienced bankruptcy attorney works to ensure that you receive the debt relief you need while helping you keep and protect you assets to the fullest extent of the law. Without the help and knowledge of an experienced bankruptcy attorney it is easy for the inexperienced pro-se filer to get into trouble. This may mean the loss of belongings that you wanted or needed to keep. In some cases it may mean the loss or denial of your discharge in bankruptcy, meaning you may never be able to get relief from the debt.

On a regular basis our office sees clients that have gotten themselves into a hard spot by trying to file on their own or by using a non-lawyer petition preparer. This almost always ends up costing the client more in fees than it would have had they come in to see us prior to filing. The small investment made in hiring a competent and experienced bankruptcy attorney to guide you through the process will ensure you receive the best possible outcome for your case.

I am sure you have all hard the old adage about an attorney that represents himself in a legal proceeding has a fool for a client. If an attorney, schooled and practiced in the legal process should hire an attorney to represent their interests in a legal proceeding, it stands to reason that anyone should.

Please feel free to call us now at 317-759-1483 or send us an email to schedule a free consultation with an attorney to review your personal situation.