What is bankruptcy?
Bankruptcy is included in the U.S.an Constitution and regulated by Congress. It is a process by which, if you disclose everything that you OWN and everything that you OWE, you will be excused from paying some or all of your debt, with exceptions based on your particular financial facts.
Can I do it myself?
Some try, but most fail and lose valuable protections in the process. Bankruptcy is a highly technical law, made more so in 2005 when Congress installed so-called reforms to discourage people from filing. After the passage of that law, many experienced bankruptcy attorneys left the practice, rather than run the risk of failing their clients in some unanticipated way. Those of us who remained in the practice of bankruptcy law have seen paperwork and time escalate per case to an unprecedented level. That, of course, means higher fees for folks who already are at the end of their financial rope. Nonetheless, the benefits a person can reap from a timely, effective bankruptcy filing are generally more than worth the fee you pay for professional representation.
What about using a non-lawyer ‘bankruptcy petition preparer?’
Don’t do it! There are a multitude of legal ‘traps’ for the unwary in bankruptcy, and a non-lawyer is not authorized to give legal advice. Consumer advocates are most concerned about the high probability that a debtor who relies on a non-lawyer petition preparer will be disadvantaged and give up property they otherwise could keep and lose valuable legal rights.
Who can file bankruptcy?
Anyone, with certain exceptions. For instance, if you previously filed a Chapter 7, you cannot file another Chapter 7 if the prior filing was less than 8 years ago. However, if that prior Chapter 7 filing was more than 4 years ago, you probably are eligible to file a Chapter 13 now.
What is Chapter 7, and what is Chapter 13?
If you qualify under the ‘means test,’ you can exempt your property and your monthly budget shows a negative cash flow, Chapter 7 is probably your best choice. If, however, you have mortgage or car financing arrearages, you will probably want to consider Chapter 13, which will allow you up to 60 months to catch up those arrearages. Chapter 13 also may be a wise choice if you owe taxes or cannot exempt all of your property (I told you it was technical!).
What is the means test?
Congress decided that debtors whose median family income exceeds the median income in the metropolitan statistical area in which the debtors live are presumptively abusing their bankruptcy right by filing Chapter 7 and wants them to file Chapter 13. There are many reasons why this concept does not help families suffering financial crises, and there are multiple strategies available for defeating the abuse presumption. An experienced bankruptcy professional can help you thread your way through this morass.
What is mediation?
Mediation is a highly effective process in which the mediator, as a neutral, who facilitates the reaching of an agreement by the parties to a dispute.
What are the advantages of mediation over litigation?
Emotional wear and tear, time and cost can be reduced greatly and the outcome better controlled by avoiding rolling the dice with a judge who does not know you or have the chance to recognize the fine points of your position. Courts encourage parties to try to resolve issues between themselves first. Experienced attorneys also recommend this.
How do I schedule a mediation session?
Both parties should schedule a time to come in together. The mediator cannot meet with one party alone. There is a full explanation of how the process will work prior to the beginning of the initial session, and the parties sign a consent to mediate form.
Who should I use as a mediator?
Whether or not your mediator is certified by the Virginia Supreme Court (a requirement for court-referred mediations), you want to ask about their training, certifications, and experience (both in number and results). A mediator learns new strategies from EVERY mediation that she then deploys in facilitating her next one. In hiring a mediator, you need to feel comfortable that you are both safe and being heard – much as you would evaluate a professional with whom you consult for any problem.