Life after Bankruptcy
The following stories are of actual clients and are examples of the types of cases we handle on a regular basis (all names have been changed to protect privacy).
Mark & Kelly (married couple were able to file Chapter 7 instead of Chapter 13)
Mark & Kelly (not their real names) tried to complete the means test themselves and found they had to file a Chapter 13 based on their high income. But we filed a Chapter 7 for them which was successfully discharged
William (failed business but started fresh through Chapter 7)
William (not his real name) had a failed business and was personally responsible for all the debts. Successfully wiped away all the debt in a Chapter 7
Rodney (improper wage garnishment stopped through Chapter 7)
Creditor was wrongfully trying to garnish Rodney’s (not his real name) wages. Got the garnishment stopped and the debt wiped away in a Chapter 7.
Joe & Carrie (kept investment properties through Chapter 7)
Joe & Carrie (not their real names) owned 6 properties, but were able to keep the properties they wanted and wipe away the rest of the debt in a Chapter 7
Sarah & Ben (able to file Chapter 7 even with high incomes)
Sarah & Ben (not their real names) were told by other attorneys that they had too much income for a Chapter 7. But we filed a Chapter 7 for them which was successfully discharged
Sarah (single mother, fell behind on mortgage payments)
“Sarah” (not her real name) is a single mother who was only able to make only the minimum credit card payments. The principal balances continued to increase, causing her to fall behind on her mortgage payments. She attempted to addresses the situation with payday loans, but it only made matters much worse. Soon, the mortgage company began foreclosure proceedings.
Sarah filed a Chapter 13 bankruptcy consolidating all of her bills. The interest on her credit cards was eliminated. She paid 10 cents on each dollar to her unsecured creditors (medical bills & credit cards). The foreclosure was stopped & the past due mortgage payments paid through the repayment plan. She saved her house and her retirement, and regained control of her finances, allowing her to move forward unburdened by debt.
Ken (fresh start through Chapter 7 allowed Ken to start his own business)
Ken (not his real name) had been recently laid off so started his own business, but in the mean time needed some relief from his creditors. Filed a Chapter 7 for him so that he could get the proper fresh start that he needed.
Mary (single, overwhelmed with debt)
Mary (not her real name) was single, employed, paying rent, had some credit card debt and student loans. The credit card debt became unmanageable when the interest rates sky-rocketed. Soon she found her self “Robbing Peter to Pay Paul.” The mounting debt and collection calls affected her ability to sleep, work and live.
Filed a Chapter 13 to consolidate her debt, terminate the interest rate, and pay the debt back at 10 cents on each dollar.
Amber (mounting debt)
Amber (not her real name) was looking to get out from under her mounting debt before she got married. We filed a successful Chapter 7 for her so that she could move on to the next Chapter in her life
Larry & Pam (company downsized)
Larry & Pam (not their real names) were a happy married couple who where able to meet their household expenses and debt until Larry’s company was downsized. Larry was unable obtain a job that paid the same salary. Based on the significant decrease in their income, they were no longer able to address their debts. They were unable to file a Chapter 7 because they had significant equity in two (2) cars that were paid in full.
Larry & Pam filed a Chapter 13, consolidating all their bills, eliminating all interest on the unsecured debt (credit cards, payday loans, etc.) paying all of their unsecured debt at 15 cents on each dollar. They were able to keep all of their assets and gain control of their finances.
Bill (real estate market crash led to massive losses)
Bill (not his real name) had been a successful real estate attorney for over 25 years, but like most people, the crash in the real estate market had taken a massive toll on his business. Mr. Doe filed a Chapter 7 but was still able to continue operation of his business.
Liz (private practice)
Liz (not her real name) is a dentist who owns her own dental practice. Due the downturn in the economy, the income from her practice began to decrease. She was unable to pay the loans she took out for her dental practice.
Filed a Chapter 13 to consolidate her debt, terminate the interest rate, repay the business loans, and pay the debt back at 10 cents on each dollar.
Mr. & Mrs. Smith (loan modification was taking months)
Mr. and Mrs. Smith (not their real names) were struggling to keep up with their mounting credit card debts, loans and past-due utility bills. Their mortgage payment was large, causing them to feel like they were working just to keep up with the house payment.
They applied for a loan modification. The mortgage company told them to be considered for a loan modification, they had to stop making their mortgage. After countless phone calls, applications and resubmissions of paperwork, the Smiths were denied the modification and advised that if they did not bring the account current, a foreclosure proceeding would be started. Panicked, the Lees called the Law Offices of Stuart B. Handelman, P.C.
The Lees filed a Chapter 13 bankruptcy consolidating all of their bills, including their past due mortgage payments. The interest on the unsecured debt (for example, credit cards) was eliminated. They paid 10 cents on each dollar to her unsecured creditors. And the foreclosure was avoided when the case was filed.
During the Chapter 13 case, the Smiths re-applied for a loan modification. This time, they were approved for the modification and continue to pay the unsecured debt back at 10 cents on each dollar.
Marci (period of unemployment, later employed)
Despite all her efforts, Marci (not her real name) was unable to find work. Her unemployment benefits did not even cover her basic living expenses. The balances on what were manageable debts grew tremendously as the months passed. Once Marci did find work, her new income was not enough to cover her living expenses and effectively pay down the debts.
Nancy filed a Chapter 13 to consolidate her debt, terminate the interest rate, and pay the debt back at 10 cents on each dollar.
John & Sue (unexpected surgery)
John and Sue (not their real names) were paying a monthly mortgage payment and are paying for their two (2) cars. They had debt that they are paying down each month.
Unexpectedly, Sue had to have surgery and needed a significant recovery period, during which she was unable to work.
The period reduced income and new medical bills & costs caused the Does to fall behind on all of their expenses. They attempted to gain control of the situation by withdrawing money from their 401k via a hardship loan. However, that only temporarily provided relief – soon the collection agencies were calling again and the interest rates caused the principal to continue build up again.
John and Sue filed a Chapter 13 bankruptcy consolidating all of their bills. The interest on her credit cards was eliminated. They paid 25 cents on each dollar to her unsecured creditors (medical bills & credit cards). The past due mortgage payments were paid through the repayment plan. They kept their house out of foreclosure, protected their retirement, and regained control of her finances.
Joel (received bad advice by another law firm)
Joel (not his real name) was told by one of the large prominent bankruptcy firms that he had to file a Chapter 13 based on his income, but we filed a successfully discharged Chapter 7 for him