Simple Bankruptcy Help

I'm not sure about this but it seems like there is another option besides bankruptcy with your situation. I'd talk to another attorney. Good luck to you!

Angela,

As much as it seems that filing your own bankruptcy would save some money, it really is worth it to hire an attorney. I filed in 2007, so I've been there. I have also sucessfully recovered from the bankruptcy (rented an appartment w/out a cosigner 2 weeks after discharge, financed a car 6 months later, credit score is almost back to where it was before I got into that mess, no plans of ever filing again....). I had an attorney for the bk, and then filed a divorce on my own....big mistake to file without representation. I also recommend shopping around before you decide who to hire. My now ex-husband opened the phonebook and pointed and that's who we hired. We could have done better, but I'm still glad we had an attorney.

If you fill out the 52-page petition yourself (free) or hire a paralegal to fill it out for you (about $300) you will stil have to sign up for and take the two required counselling classes ($60-$100) and pay to file the petition ($299 for Chapter 7 - can be deferred with a $50 partial payment but your case will be dismissed if you don't pay the balance of the fee) and you will have to represent yourself in court. The 341 hearing is pretty painless if you have an attorney, however the numbers in your petition are much more likely to be called into question if you are representing yourself and the bankruptcy trustee can ask you to obtain attorney representation if something goes wrong. If you have to hire an attorney after your petition has already been filed, you can expect to pay about $250/hr for representation instead of a flat fee.

If you are representing yourself, you also bear the responsibility if something is wrong. The attorney accepts personal responsibility for the accuracy of your petition when you are represented.

Most attorneys will take payments towards the bk and will take your collections calls for you while in-process. Hardly any attorneys will accept partial payment before filing and the balance afterwards because they would have to extend credit to do that and would be discharged along with your credit cards.

I am not an attorney, but I do work in an attorney's office in the Phoenix area. I don't feel that it is appropriate to disclose the name of the attorney here since this isn't an advertising venue, but you can PM me if you want more info.

BTW, I also used to work in collections. Some of the other responses suggested settling the debt instead of filing bk. As a general rule, if there is no way you can pay back the debt that you have (plus interest) within the next 5 years without taking on new debt, it is definitely worth considering bankruptcy because other options will probably just postpone the inevitable. It took me two years to finally decide to file for bk and my only regret is that I didn't do it sooner.

Most original creditors (the company you owe money directly to) are not too keen on reducing interest rates or setting up payment plans. Once the debt goes to collections, you have a better chance of settling or freezing/reducing the interest rate, but by that time, your credit is already seriously damaged (my score dropped 100 points after 1 month of missed payments) and negative credit stays on your report for 7 years. If the collections agency wants to work with you, there are usually two options available to those who ask: freeze or reduce the interest as long as you make reasonable payments or settle in one lump sum. A settlement with payments is pretty rare. Also bear in mind that if you do settle and save more than $600 you will get a 1099 at the end of the year and you will have to pay tax on the amount saved as if the lender gifted the money to you as additional income.

If you work out a payment plan that is affordable for you but the lender doesn't see the payments as reasonable or if you miss a payment, the lender can still sue you and can get a judgment against you for the balance plus interest plus attorney fees and court costs. Once a judgment is entered, your employer or bank would be served and up to 25% of your income from working or your entire bank account balance (unless your only source of income is social security and/or disability and the funds are not comingled with any other money) can be taken.

You mention that you are disabled. If your only source of income is social security and/or disability, you may be "judgment proof." If this is the case, the lender wouldn't be able to force you to pay by getting a judgment against you. If the attorney you saw didn't discuss this with you, talk to a different attorney.

Try going to Consumer Credit Counseling Services. Their website is:
http://www.cccs.org/

Have you tried talking to your credit card companies? They may prefer to settle with you for a portion of the debt rather than risk what a bankruptcy court may award them. If there is some amount that you could afford to pay each month, figure out how you could divide that six ways, and talk to the companies. If you could come up with a lump sum, from friends, family, etc, try offering a single lump some to some of the companies and making payments to the rest. I have seen credit card companies settle for far less than the full amount rather than take their chances in bankruptcy.
You could also try contacting Community Legal Services or the Volunteer Lawyer's Project in your area and looking for an attorney who could help or give you a second opinion pro bono.