I recently read an article on forbes.com about bankruptcy, and it has been niggling in the back of my mind ever since. The author is not a bankruptcy lawyer, but there he is on the Internet pontificating about the three most important things you need to know about filing for bankruptcy.
He noted that bankruptcy isn't free, saying that this is a “surprise” to many people. I'm not sure why anyone would have an expectation that filing for bankruptcy would be free. People don't go to the store and expect to get their groceries for the week for free. They don't go to the hospital for surgery and expect the surgeon and the hospital to thank them for coming in and provide services for free.
The article goes on to say that most lawyers charge by the hour. While this is true for many lawyers, it is not necessarily the case for consumer bankruptcy lawyers. Most charge a flat fee, which is typically a small percentage of the debts that are discharged and the assets that are protected. Furthermore, unlike other areas of the law, there is oversight of the fees that bankruptcy lawyers charge, because those fees are disclosed as part of the bankruptcy filing (in two different places) and must comply with the local rules of the bankruptcy court.
Then the article gets really scary. The author lists debts that won't “go away,” and his list includes taxes, student loans, real estate liens, and certain luxury items. But sometimes taxes can “go away.” There are instances where old tax debt can be discharged. There are also instances when student loan debt is discharged. Okay, I'll admit that those are few and far between, but that is why it is really tough to make blanket statements that debts won't go away.
The author also includes real estate liens. However, if a person filing bankruptcy is surrendering property, then the person who has filed bankruptcy is no longer responsible for the debt. The lien sticks to the property, not the person, so for the person, the debt does “go away.” As for “certain luxury items,” I'm not sure what he is referencing there.
Finally, and probably what caused me the most heartburn was his description of the creditors' meeting. I've written about that before. Here's the link: https://www.pagelawfirm.com/denton-county-lawyer/should-i-be-afraid-of-the-numbers-3-4-and-1
This is not the creditors' “one last opportunity to dispute the discharge of any debts.” He makes it sound like creditors will be at the meeting clamoring to keep their debts from being discharged. That is NOT the purpose of the meeting, and creditors actually have 60 days from the date of the meeting to object to the discharge of the debt, which, by the way, hardly EVER happens. In most instances, creditors do not attend the “meeting of creditors.”
Okay, I'm off my soapbox, but the bottom line is you should talk to a bankruptcy lawyer if you think you might need to file bankruptcy. Most of us are really nice, and we can provide you with facts and help you understand the law. Call our Frisco bankruptcy law office today at 214-618-2101 to schedule a personalized consultation.