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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2820
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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I am considering filing for bankruptcy and looking for advice/guidance.

Customer Question

I am considering filing for bankruptcy and looking for advice/guidance. My total debt is approx 20k - 25k, the majority of that coming from a voluntary surrender of a car about 4 years ago, the rest of it being credit cards. The last time I made a payment on my debt was about 4 years ago, so everything has since been charged off and with 3rd party collectors. I make $22809.06 a year before taxes. I am not currently married but will be within the next 50 days. I do not own a home, and have no children. My fiance was just recently served with 2 summons for 2 of my past due credit cards. Any help is greatly appreciated.
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 4 years ago.

Terry L. :

Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.

Terry L. :

You sound like a great candidate for chapter 7

Terry L. :

Chapter 7 can clear out all of the consumer debt - credit cards, medical, the balance on the car that was surrendered.

Terry L. :

The process takes about 90 days.

Terry L. :

Arizona is a community property state.

Terry L. :

So, since you are not married yet, did your fiance cosign for you?

Terry L. :

if so, your finace is on the hook for the debt.

Customer:

I have read online that I may make to much for a chapter 7?

Terry L. :

If you file before you are married, then the debts should be clear shortly after you get married.

Customer:

She only cosigned for 1 of the credit cards, which she is paying for.

Terry L. :

let me pull up the income sheets.

Terry L. :

1sec

Terry L. :

the income cutoff for the means test is 41,385 if you are the only one in the household.

Terry L. :

$53,781 for a 2person household.

Terry L. :

So if your household income from all sources is below that figure (last 6 months average x 12)

Terry L. :

then you should have no problem with chapter 7

Terry L. :

Do you have any questions?

Customer:

Yes.

Terry L. :

here is the link

Customer:

What would be better on my credit as far as long term/short term results. If i were to file for a chapter 13 vs 7, would my credit improve quicker?

Terry L. :

no real difference in the long run, although chapter 13 shows that you are paying back debt

Terry L. :

but, you are committed for 3-5 years repayment in most cases.

Customer:

Also, would my defaulted car loan be dismissed in bankruptcy?

Terry L. :

you need court approval to buy,sell during the case.

Terry L. :

discharged yes, in either case.

Terry L. :

but, in a 13, you'd be paying some of it back

Customer:

The car has already been repossessed

Customer:

4 years ago

Terry L. :

yes, in a 13, you would be paying back a percentage of debts, from 10-100% based on your disposable income.

Terry L. :

You would be paying that percentage back on the remaining balance in the ch13

Terry L. :

you would probably be best off filing chapter 7 in most cases, unless you make too much money, or if you have a large asset that might not be exempt in the bankruptcy case

Customer:

ok. so in chapter 7 the car debt would be dismissed?

Terry L. :

discharged, yes.

Terry L. :

dismissed means your case did not go thru

Customer:

Thank you

Customer:

that is all

Terry L. :

you mean discharged

Customer:

gotcha

Customer:

appreciated.

Terry L. and 2 other Bankruptcy Law Specialists are ready to help you