I often wonder whether the lawyers who file more cases than me tell their clients any of these things.

  1.  Filing for bankruptcy should be a last resort.
  2. A bankruptcy filing whether under Chapter 7 or Chapter 13 will go on your credit report for ten years.
  3. Unpaid debts will go off of your credit report seven years after they are first reported. If the only reason that you are filing is because of old debts, you may be better off just waiting for them to go off your credit report.
  4. The acronym Y.A.H.O.O. stands for “You always have other options”. Explore and consider your other options before filing any kind of bankruptcy.
  5. Other options include settling with your creditors or just not paying them.
  6. Your wages can only be garnished by one creditor at a time and they can only take one-fourth of your take home pay at the most until their debt is paid.
  7. Do you want to trade a garnishment by a creditor for a garnishment by a Chapter 13 trustee?
  8. Chapter 13 trustees take about 7% of every payment before they pay creditors. Some creditors may be paid without interest, but you are paying 7% to the trustee in place of the interest
  9. Bankruptcy lawyers receive about $3,000 from you payments. If the creditors are being paid in full, the attorney fee is an extra cost to you. If you are not paying your creditors in full, the unsecured creditors get less money because they are last in line to be paid.
  10. The trustee always has his hand out. If any extra money comes your way, be sure to tell me. The trustee may want some or all of it.
  11. All the trustee wants is money. He doesn’t want your cars, house, land, etc. All he wants is your money.
  12. The trustee just wants your money until all of your creditors are paid in full or until you make your last plan payment, whichever comes first. He will give back any money that he is not entitled to.
  13. The trustee has no tolerance for screw-ups. He has one hundred or more rules. If you comply with ninety-nine and don’t follow one he will file a motion to dismiss your case.
  14. If you are about to lose your house or cars and you can now make payments that you couldn’t make before, Chapter 13 may be your only option.
  15. Make your payments on time. Give the trustee your tax returns and refunds each year and call me if there are any changes in your circumstances.

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