Initial consultation FAQ: Why do I need to provide information about my business if it is not in financial trouble?

Do I need to include information about my business if it is not in financial trouble (or do I need to include information about myself if only my business is in trouble)?

These are very common questions from people who first come in to see us. There are several answers. If you think your business is not in financial trouble, why not give us the information anyway and let us see if we can agree with you? After all, there is no charge for the first meeting and making assessments like that is what we do for a living.

There is no way the financial problems of a business will not impact the owner or the owner's financial problems will not impact the business in some way.

To get a full picture and to make sure we provide the proper options for the situation, the owner of a business should always provide full financial information on the owner and the business at our initial meeting. 

How much does it cost to file bankruptcy and how will I be able to afford it?

The cost of bankruptcy depends on the complexity of your situation and the type of bankruptcy you need to file, whether it be chapter 7 bankruptcy, chapter 13 bankruptcy or chapter 11 bankruptcy. We pride ourselves in offering individualized attention to our clients while offering competitive fees. Most of our fees are flat fees meaning you will not typically owe any further fees after the retainer fee is paid. We are a small firm and we pride ourselves on knowing each of our clients on a personal level and guiding them through each stage of their case.

As for payment, we do offer payment plans. Once you pay the initial payment, you may send a letter to your creditors letting them know we are representing you. 

We may tell clients to stop making payments to creditors, particularly unsecured creditors, after they make the decision to file bankruptcy. Clients are usually able to save for their retainer fee by using the money that was being used to make their minimum payments.

When potential clients first come in, they are typically borrowing money from family to get by. We have found that family is more willing to pay for a client's retainer fees when they know this will be the last time they will need to lend money and that we will be working with the client on learning to live on a "no surprise budget" and therefore will not end up in this situation again in the future.

Why do you need my non-filing spouse's financial information when I first come in to see you?

Do I really need to include my spouse's financial information when I first come in to see you  if he/she is not involved with my financial problems and/or not in financial trouble? 

This is a very common question from people who first come in to see us. There are several answers. If you think your spouse is not in financial trouble, why not give us the information anyway and let us see if we can agree with you. After all, there is no charge for the first meeting and making assessments like that is what we do for a living.

A related answer is that, when a person is in financial trouble,  their spouse is going to be impacted in some way by whatever we do. When a client leaves our office, they will have some idea about their options and will have some degree of what we call "peace of mind" but there may be somewhat of an gap without the spouse's information. 

Also,  when they try to go home to the spouse to explain what we have said, it will not "sound the same" as it did at the meeting. So the best thing is to provide financial information on the spouse too and try to have spouse with you for the meeting.

 

Common Questions Regarding Judgments

Question: How long is a judgment collectable in South Carolina?

Answer: 10 years

Question: What  does it mean to have a judgment against you?

Answer: A judgment will be an automatic lien on any real estate you own in the county where it is filed. A judgment creditor can also have the sheriff sell your non-exempt assets.

Question: Will a bankruptcy discharge a judgment?

Answer: This is a little complicated, especially if you own real estate that the judgment attached to prior to the bankruptcy filing.  If you obtain a discharge of your debts in the bankruptcy, which means that the debts are legally forgiven, the judgment debt will be discharged but the judgment lien against your real estate may still exist, much like a mortgage lien would continue to exist even if you were discharged of the mortgage debt. The good news is that you will probably be able to avoid (get rid of) the judgment through a process called judgment lien avoidance. This is particularly true for your residence but this process could also be used to avoid a judgment lien against other types of real property like a rental property.

Question: Will I have to file bankruptcy if I have a judgment?

Answer: While having a judgment lien against you might indicate that you should looking seriously at filing bankruptcy, you certainly can carry on a fairly normal life with a judgment against you. Your credit will not be good and you may not be able to sell your home or refinance your home without paying off the lien; your non- exempt assets, if any, could be at risk,  like a vehicle that had more than the exempt amount of equity in it, but your properly set-up retirement accounts are safe and your income could not be garnished in South Carolina like it could be in Georgia. So, if you can ride out the judgment for 10 years, you might be in OK. Unfortunately, you may be out of the credit arena for that period of time.

Question: How do I deal with a judgment outside of bankruptcy?

Answer: In addition to waiting it out, you should go to the creditor with an offer to resolve the judgment. We will offer take a look at a client's situation and see what the creditor would get if the client were to file a Chap 7 or Chap 13 bankruptcy. We would then make an offer taking those 2 scenarios into consideration so that we offer  a little more that the creditor would receive in a Chap 7 or something less than the creditor would receive in a Chap 13 but would provide that the creditor would receive it sooner than the creditor would normally receive it in a Chap 13. We call this a workout and it can be an effective way to settle with your judgment creditor. If you do not have a lump sum to pay the settlement amount,  we may offer a payment plan but you will get more of a discount the sooner you can pay the settlement.

I am embarrassed, anxious and the creditors are scaring me!

Rarely does anyone come into an initial consultation saying, "let me tell you how great things are going in my life". Oftentimes, people are ashamed and worried about their situation.

First, there is no need to be embarrassed. We have seen many different situations but, the main reasons that people get into financial distress are because of an unfortunate event such as the loss of a job, an illness in the family, a divorce, a failed business and/or a bad investment. The reasons are usually pretty common and could happen to anyone. We do sometimes meet with people who are overspending and not living within their means. However, normally we see honest, average, hard-working people that got in over their heads for one reason or another. They have usually tried to come up with a solution on their own, including reaching out to their creditors to try to explain the situation and find a solution, but the creditors will not work with them, resulting in fees, higher interest rates and unmanageable balances.

Bankruptcy is designed for the honest but unfortunate debtor to give them a new opportunity in life and the opportunity for a successful financial future. Debtors are using legal means, i.e. the Bankruptcy Code, to help get a fresh start.

We have four goals for our clients:

1. To get out of the mess;

2. To stay out of the mess;

3. To have good credit again;

4. To have a vision of a successful financial future, which is, to us, where clients have money in the bank, own their own home and they are ready to retire.

As for the worry and anxiety, Philippians 4:6 says, "do not be anxious about anything, but in everything, by prayer and petition, with thanksgiving, present your requests to God". We invite you to offer worry and anxiety up to the Lord. 

Finally, do not let the creditors scare you. The creditors cannot put you in jail, and, in SC, they cannot garnish your wages. They can sue you and it is best not to allow judgments to be entered against you, but we can usually deal with lawsuits and judgments in a Bankruptcy.

Are Student Loans Dischargeable in Bankruptcy?

Although it can be challenging to discharge student loans in bankruptcy, it is certainly not impossible. 

In some cases, the Court requires a debtor to meet the following three criteria in order to discharge student loans:

(1) the debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for  yourself and your dependents if forced to repay the loans;

(2) additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and

(3) the debtor has made good faith efforts to repay the loans. 

If you want to try to discharge a student loan in bankruptcy, you need to bring a separate action within the bankruptcy case. In the complaint, we can ask the Judge to rule that your student loan is dischargeable.   

If you have questions about whether you might be eligible for a discharge of your student loan debt, please all our office and set up a free consultation to discuss your situation. There are various options available to deal with your student loan debts inside and outside of Bankruptcy.

Please also see the following primer designed to provide an introduction to student loan debt:

http://www.scb.uscourts.gov/pdf/initiatives/SLDPrimer.pdf

Can I Recover From Bankruptcy and How Long will it Take?

Yes, most definitely. Normally, it takes three (3) years to recover from Bankruptcy.

We set four (4) overall goals for our clients:

1.) Get out of the financial problems that you are in;

2.) How to stay out of financial problems;

3.) Have regular credit again as soon as possible;

4.) Have a vision for financial success in the future, which we define as own your own home, be debt free, have money in the bank, be ready to retire.

There are three (3) things you must do to achieve these goals. Conversely if you do not do these things, you will not achieve these goals:

1. You need to have a clean credit report;

2. You need to have a full banking relationship with some bank you do not owe money; and

3. You need to learn to establish and live on a no surprise budget.

The clients of the Campbell Law Firm understand that you will recover from the bankruptcy, normally within three (3) years and you will achieve financial success with some adjustment to that depending upon your age and personal circumstance, if you will commit to doing these three (3) things.

We work with our clients following the bankruptcy to help them learn to live on a budget so they will not need to file bankruptcy in the future.

Will Everyone Find out if I File for Bankruptcy?

Probably Not. 

Unless you’re a prominent person or a major corporation and the Bankruptcy filing is picked up by the mainstream media, the chances are good that the only people who will ever know that you filed for bankruptcy are your creditors and the people you personally tell. 

While your bankruptcy is a matter of public record, unless someone is specifically trying to track down information on you, there is very little chance that anyone will even know you filed Bankruptcy, as the information is difficult to find. 

Usually people do not go to the trouble of trying to find out who has filed Bankruptcy because, frankly, it is not very interesting information. 

In our experience, if someone (for whatever reason) finds out that you filed for Bankruptcy, he or she usually feels nothing but empathy and compassion for your situation. If he or she does not feel that way, he or she is probably not someone you would want to associate with or call a "friend" any way.

What Property Can I Keep if I File Bankruptcy?

In a Bankruptcy, people have two (2) major goals:

1. to hold on to as many assets as they can and
 2. to be discharged from their debt.
 

As far as the assets they can maintain, in most cases, people will have the option of retaining almost all their assets or property.

There are, of course exceptions to this, which would depend on different factors such as:

a.) Do you want to keep the asset?
b.) Do you need the asset?
c.) If there is a lien on the asset, such as you owe money on your home or car, are you up to date with payments and can you continue to make payments?
d.) Is there equity in the asset? In other words, is the asset worth more than what you owe against it?
e.) What portion of the equity can you protect?

The best way to determine which assets you are allowed to keep in bankruptcy is to meet with an attorney and review your situation. Your goal should be to receive a discharge of your debts while being able to protect as many of your assets as possible.

If I File for Bankruptcy, Does my Spouse have to File for Bankruptcy?

No. If one spouse has most or all of the debt, the other spouse does not necessarily need to file Bankruptcy. 

You will need to make sure both spouses are not responsible for the debt. 

Three (3) ways to determine if you are responsible for a debt include 

(1) whether you have signing authority (if you do, you are most likely responsible for the debt) 

(2) whether the bill coming is in your name (if it is, you are most likely responsible for the debt)

(3) whether the debt is on your credit report (if it is, you are most likely responsible for the debt)

If you dispute a debt that is listed on your credit report, we will give you a guide to disputing your credit report.

In cases where both a husband and wife have a lot of debt, either individually or jointly, it makes sense and saves money for them to both file a joint case (but it is not required). 

In the alternative, if you do not have joint debt, one spouse’s filing Bankruptcy will not affect the other spouse’s credit. 

You will still be responsible for paying the non-filing spouse’s debt if he/she decides not to file for bankruptcy. 

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