Long, Aaron D.

QUESTIONS AND ANSWERS ABOUT BANKRUPTCY

Bankruptcy gives a fresh start to honest debtors. Fifteen Million Americans filed bankruptcy in 1990s. Some have medical expenses; some lost their job; some people's husband or wife left them with bills; some charged too much.

WHAT ARE THE BANKRUPTCY "CHAPTERS"?

You have two main choices under the bankruptcy law. Chapter 13 is a debt adjustment. We work out with the court a payment you can afford. Chapter 13 provides time to catch up for people who are behind on their house payments. Chapter 13 may be required for higher income people or if you have built up equity in your home. Under Chapter 7, most unsecured debts are discharged--they're gone. (You usually cannot be discharged from taxes, student loans, or child support.)

HOW MUCH PROPERTY CAN I KEEP?

Most people keep everything. Virginia law allows you to keep your furniture, clothes, and car up to certain limits of value. The law also gives you the right to protect other assets: bank accounts, expensive cars, and your house--again up to certain limits.

HOW LONG WILL BANKRUPTCY STAY ON MY CREDIT?

The bad news is, bankruptcy will be on your credit for 10 years. The good news is, you can re-establish some credit fairly quickly. We'll talk about what you can do at our first meeting.

IS BANKRUPTCY MY ONLY OPTION?

We offer Bob Weed's Debt Relief Service. We can try to negotiate a reasonable re-payment plan that avoids bankruptcy and satisfies your creditors. (Honestly, this does not work as often as it should.)

WHAT ABOUT MY SECURITY CLEARANCE?

Bankruptcy will not hurt your clearance, but being late on your bills might. So it's a good idea to talk about a bankruptcy lawyer soon when you have financial difficulties.

WHY DO PEOPLE SAY FILING BANKRUPTCY IS SO BAD?

If you are planning to file bankruptcy, many people will give the wrong idea about bankruptcy. Those people think that bankruptcy is some kind of punishment you have to go through because you cannot pay your bills. That's completely wrong.

THE PURPOSE OF BANKRUPTCY IS TO HELP YOU.

The Purpose of bankruptcy is to provide you with a fresh start to honest debtors. As long as you did not lie on your credit applications or hide valuable property, the bankruptcy court will help you get a fresh start in life.

WHAT IS THE WORST THING THAT USUALLY HAPPENS?

For the first two years after bankruptcy, you will have terrible credit. If you have to finance a car--please try to pay cash for an early 1990's car rather than buy from a car dealer--if you have to finance a car, you will be paying something like 21% interest. But you can get a secured credit card right away and start rebuilding your credit. With two years of rebuilding credit, you will be able to get a car loan in the 11% range.

With three years of rebuilding credit, you will be able to finance a house (if you are making enough money).

With one year of rebuilding credit, you will start getting approved for credit cards again. (Although I recommend you throw them in the trash.)

Filing for Chapter 7 Bankruptcy is better for your credit than getting help from credit counseling. Bankruptcy is better for your credit than sending late or partial payments.

WHAT ABOUT?

Filing for Bankruptcy will not hurt your immigration status. You can still get a green card--you can still become a citizen, exactly the same as before.

Filing for Bankruptcy will not hurt your security clearance. Having trouble paying your debts will hurt your security clearance, so you should file for bankruptcy before you get too far behind.

Filing for Bankruptcy will not stop your tax refunds.

Filing Chapter 7 Bankruptcy will not involve your employer.

Filing for Chapter 7 Bankruptcy does not mean you will be garnished--it makes it illegal for your credit cards and medical bills to garnish you.

WHEN SHOULD WE TALK?

If your finances are interfering with your work, your family, your health, your life--call today. Filing bankruptcy can be the first step to regaining control of your life.