Bankruptcy is not a dirty word, it is a right provided for by our nation’s laws. Especially with the extreme financial impact and pressures of the pandemic and response, it’s a more important right than ever. Bankruptcy is a safety net and sometimes it is the best option. If you think you might need to file bankruptcy, or just want to know what it is all about, schedule a free consultation and read our Frequently Asked Questions below.
As a result of the COVID-19 spike, we are doing most consultations over the phone. But our office is still open to give you documents, receive documents, and our trained staff can answer many questions and help with paperwork in person during office hours.
Frequently Asked Bankruptcy Questions
What is the Process for Filing Bankruptcy?
- Bankruptcy starts with you compiling information and documents that your attorney will need to prepare your petition. This is a time-intensive process and requires significant gathering of information and documents you might not have readily available.
- Before filing your bankruptcy petition, you also have to take and complete a credit counseling course. This course can often be completed online and costs a small fee.
- Next, you may then file the bankruptcy petition with the Court. There is a fee associated, which is typically included in your attorney’s fees.
- After the filing of the petition, the Court then sets a meeting of the creditors, which is usually conducted over Skype. It will be held within two months of your petition being filed. Primarily, this meeting allows the bankruptcy trustee to ask you questions about your assets, debts, employment, and bankruptcy petition. Your creditors are also allowed to attend this meeting, but they rarely do. After the meeting of the creditors, the Trustee may require further information from you, by issuing what is called a trustee’s directive.
- After the trustee’s meeting, you must take a second credit counseling course and complete it within sixty days of the meeting of the creditors. Much like the first course, you can usually complete the second course online.
- Additionally, if you are able and choose to reaffirm certain debts, you must do this within sixty days of the meeting with the trustee. The most common debts reaffirmed are mortgages and car loans because people often want to keep their homes and vehicles if they can.
- Then after sixty days, if everything went smoothly, you will get a discharge. This means you no longer owe the debts that were listed in your petition.
Months later, the bankruptcy case will be closed and it is done.
When Is The Right Time To File For Bankruptcy?
- Although the right time to file for personal bankruptcy may differ for everyone, it might be time for you to really start thinking about it if:
You’ve been sued over your outstanding debts;
- You have no savings to pay off, or make regular payments on your debts;
- You don’t have any assets valuable enough to cover your debts;
- You have expensive medical bills that your insurance won’t cover;
- Your wages are being garnished;
- Your home is in the process of foreclosure;
- Your vehicle is in danger of being repossessed;
- You’ve tried to get help already through credit counseling; or
- You’ve made every attempt to negotiate with your creditors without success.
Also, for tax purposes, people often file bankruptcy a few weeks after they get their tax refund in early spring. If you file in the fall or winter, the bankruptcy trustee may be entitled to a larger portion of your refund. This is a consideration you would want to talk to your attorney about.
Will They Take my Stuff During Bankruptcy?
Generally, in a bankruptcy case, there is a person who is called the Trustee who tries to obtain as much money as possible from you, and distribute it fairly among the people you owe money to. The Trustee can take some property from you and sell it to do this. However, Wyoming bankruptcy courts, under Wyoming State law, put certain property off-limits for the Trustee to take from you. Wyoming Statute § 1-20-106, provides those protections:
(a) The following property, when owned by any person, is exempt . . .
Do my Spouse and I Have to File Separately?
Spouses usually file together. There is no additional cost for filing with a spouse verses filing alone. Sometimes married people do file on their own. This is something you would want to discuss with a bankruptcy attorney.
What Type of Personal Bankruptcy Is Right For Me?
The two primary types of personal bankruptcy a person can file for are Chapter 7 and Chapter 13.
Chapter 7 involves the liquidation of a person’s assets to pay off their outstanding debts, meaning many of their non-exempt possessions and assets are taken in exchange for total debt forgiveness.
A Chapter 13 bankruptcy allows a person to maintain ownership of their assets so long as they agree to and keep up with an appointed three- to five-year debt repayment plan.
If you have a lot of stuff that’s worth money, like side-by-sides, expensive hunting gear, etc. that you understandably want to keep or your income is too high to qualify for Chapter 7, Chapter 13 may be right for you. On the other hand, if you are drowning in debt and desperate for help, Chapter 7 is likely the best option for you.
What Debts Can’t Be Wiped Away When Filing For Personal Bankruptcy?
Medical bills, credit card debt, and more can be forgiven when filing for bankruptcy. However, that doesn’t mean that bankruptcy can wipe away all debt. For instance, bankruptcy cannot discharge:
- Child Support
- Income Tax Liability*
- Debts Related To Divorce
- Debts related to fraud
- Student Loans*
*There are legal mechanisms to get rid of these debts, but you should not count on them. They are very difficult to discharge. however, you should speak with a reputable bankruptcy attorney to learn if your unique situation qualifies you.
How Much Does It Cost To File For Personal Bankruptcy?
Filing for bankruptcy does cost money (attorney fees + filing fees), however, we do permit payment plans. We cannot file your bankruptcy petition without having payment in full, because otherwise you would owe us money, and we would have a conflict of interest because we would have to list ourselves ad creditors! If you’re thinking you can simply cut your costs by handling your bankruptcy case all on your own, think again. It is a very difficult process. Our fees for the typical Chapter 7 bankruptcy is $2,000 total, this includes the filing fee.
What Does Discharge Mean?
Discharge is a term in bankruptcy law that means that you no longer owe the debts that are discharged. In bankruptcy, when the Court enters an order discharging your debts, that means that you no longer owe on those debts. However, if those debts are secured, with a vehicle or home, then the debt is still on the property and that property cannot be taken away.
What is the Means Test?
The means test was designed to limit the use of Chapter 7 bankruptcy to those who cannot afford to pay off their debts. The means test is what the Bankruptcy Court uses to decide if you have enough income to pay your debts. There are really two means tests. If you fail the first, then you can try the second.
The second means test is used if you fail the first means test. It is more complicated. The test is done by subtracting set and accepted monthly expenses from your current monthly income (six month average) to arrive at your monthly “disposable income.” The higher your disposable income, the more likely you won’t be allowed to use Chapter 7 bankruptcy. Instead, you’re expected to use your disposable income to repay creditors.
What Are Some Alternatives to Filing For Personal Bankruptcy?
What Should I Avoid if Filing for Bankruptcy?
When Will my Garnishments Stop?
How Will Filing For Personal Bankruptcy Impact Me?
Everything from your credit score to your assets may be affected by filing for bankruptcy. In terms of your credit score, if yours is decent or even on the high side, you will likely see a big drop that could affect other areas of your life later on, like getting a loan or credit card. Secondly, you also have to consider how long bankruptcy will stay on your “record.” For Chapter 7, that number of 10 years since none of the debt is repaid. Although, Chapter 13 is a little better, falling off after only 7 years since a good portion of the debt has been paid off. Lastly, if you’re married, you may be surprised to know that only assets belonging to the person filing and jointly owned assets can be liquidated to pay off debts. Assets belonging solely to the spouse not filing may be spared.
How Our Firm Can Help. Serving all of Wyoming from Gillette, Newcastle, and Casper.
Dealing with substantial debt is incredibly stressful. Depending on your circumstances, you may be facing home foreclosure, auto repossession, or persistent calls from creditors. The Gillette bankruptcy attorneys at Stulken & Brown can help you regain control over your financial situation and work towards a better, more secure future. Attorney Sean Brown has been mentored by Felix Sowada since 2017, Gillette’s only local personal bankruptcy attorney until Sean came along. Felix has successfully completed probably thousands of bankruptcies. Our clients are able to enjoy not only the energy and vigor of younger, active lawyers, but also the knowledge and dedicated skill that comes from a decades-long career.
Our team of dedicated legal professionals can help you by:
- Determining if you are a candidate for bankruptcy
- Determining which type of bankruptcy you should file
- Gathering and submitting necessary paperwork
- Putting an immediate end to creditor harassment
- Working to stop foreclosure/auto repossession
- Answering your questions and addressing your concerns
- Communicating with you throughout the process
- Representing you at bankruptcy hearings
At Stulken & Brown, we have a history of treating our clients like family. We understand how stressful dealing with major debt can be, which is why we go above and beyond to provide our clients with compassionate guidance and the skilled legal services they deserve. Our team is flexible and willing to work around your needs. We offer discounted rates and free initial consultations to make the process easier for you.
Need a bankruptcy attorney in Wyoming? Call Stulken & Brown at (307) 257-6368 to speak to an attorney about your debt relief options.