Bankruptcy saved my life

How to wipe out your debt and get a fresh start

by Aaron D. Compton
Attorney at Law

On a brown leather sofa in a small office sat a middle-aged man dressed in brown casual shoes, dark jeans and wearing a button up shirt. He looked weary; like a person who had just spent the last 12 months watching the love of his life slip away.

The host approached the man who forced a smile as he said hello. The man shared with the host the stories of his recent divorce, the business he lost that was his sole source of income, the emergency hospital bills and how he would be better off dead. He couldn’t handle the stress any more. The host asked the man why he had come to see him.

The man explained that he was tired of fighting and was at the end of his rope. The man had a large amount of debt from his divorce. The banks that financed the man’s business were suing him to recover everything they could. The medical bills from his emergency surgery were piling up in a box beside his bed and he could not support his kids because his pay check was being seized by the banks and the IRS.

After hearing the man’s story, the host removed his glasses from his face and leaned forward in his big brown chair, locking eyes with the man. Expecting to hear another self-righteous lecture, the man slide forward on the leather sofa and began gathering his things to leave. The host said, “if I could give you a do-over would you want it?”

The man with a confused look on his face said you can’t give me a do-over. The host explained that he couldn’t remove the pain of what the man had been through but he could remove the daily harassing reminder of the pain. He could make the creditors stop calling, the banks stop seizing his property and the lawsuits stop.

The host whispered to the man, I can get rid of all your debts if you will let me. The man’s face, aged from the stress of his life, started relaxing. Then he slid back into the sofa and put his keys back in his pocket. He looked as if the weight of the world had suddenly been lifted off his shoulders.

That day in that tiny office on that brown leather sofa, the host not only rescued the man from his despair but he gave the parents of that man a gift they almost lost.

7 Common Bankruptcy Questions

1. What is bankruptcy? Bankruptcy is a federal program that helps protect people from their creditors. It keeps creditors from foreclosing and repossessing home or a car. Bankruptcy can eliminate most unsecured debts, with a few exceptions. Examples of unsecured debts are credit card debts, medical bills, pay day loans and signature loans. Bankruptcy laws are complicated so consult with an attorney who regularly practices bankruptcy law.

2. When should I file bankruptcy? When you cannot afford your day to day living expenses and your five-year plan to pay your debts includes hitting the lottery, you should talk to a bankruptcy attorney. If your paycheck is being garnished, house foreclosed on or your car payment is past due you should consider calling a bankruptcy attorney. Attorney Aaron Compton of Oklahoma City provides a free initial consultation to help people decide if bankruptcy is right for them.

3. How do I file bankruptcy? A typical bankruptcy filing exceeds 65 pages and contains information about your past, present and future finances. Your bankruptcy filing must include a list of everyone you owe, all property you own, your income and expenses and a detailed explanation of your financial history. You must also take a Credit Counseling class that can be taken online or by phone. The paperwork you file must comply with the local court rules, bankruptcy rules, federal law and state statutes. Otherwise, it may be dismissed and you may be prevented from filing again for a long time.

4. What happens after I file bankruptcy? Once your bankruptcy case is filed you will meet with your Trustee and creditors at the federal courthouse or other location. They will ask you questions about your financial situation. Often times, no creditor will appear. An experienced bankruptcy attorney will be able to prepare you for what to expect at this meeting. You will also need to attend an approved Financial Management class in person, online or over the phone.

5. How Much Does Bankruptcy Cost? The cost to file bankruptcy depends on the type of bankruptcy you’re filing. Most individuals pay between $310 and $335 in court filing fees. The court can waive the court costs in certain conditions. The cost to hire an attorney is usually a flat fee and depends on a lot of variables.

Some variables that affect the attorney flat fee is

(1) Whether you get to speak with your attorney whenever you have a question;

(2) Whether your attorney actually prepares your case himself/herself;

(3) The type of bankruptcy;

(4) Whether you have a business; and

(5) The complexity of your case.

On average, the fee of an experience bankruptcy attorney is between $1,400 and $2,000 for a chapter 7, depending on many variables. It is difficult to review 65 pages of dull financial information in detail. So, make sure you hire a good bankruptcy attorney who personally prepares your bankruptcy documents. You don’t always need to hire the most expensive bankruptcy attorney but steer clear of the cheap bankruptcy.

6. What property can I keep? Generally speaking, individuals get to keep their household items, their house, their car, clothing, electronics and their retirement. There are a number of “exemptions” that allow you to keep the Trustee from seizing your property and selling it off. Consult with a bankruptcy attorney to learn more about what property you can keep.

7. What will happen to my credit score? Many individuals who have had financial challenges have earned a very low credit score. Filing bankruptcy can stop the creditors from reporting negatively to credit bureaus. When your case is discharged, many creditors remove the balance from your credit report. This results in fewer negative remarks and a better debt to income ratio. The bankruptcy clients of this author report that their credit report improves dramatically after filing bankruptcy.

This information is not a substitute for legal advice. Consult with an experienced bankruptcy attorney for information specific to your case.

Aaron D. Compton, 4216 N. Portland Ave., OKC, OK, can be reached by calling (405) 578-4529. He is an attorney licensed in Oklahoma. He graduated from Oklahoma City University School of Law in 2008 and is a member of the Oklahoma Bar Association. His practice focuses in the areas of Bankruptcy, Custody/Divorce and Small Business.

Copyright 2017 The Gayly – February 27, 2017 @ 11:30 a.m.