Bankruptcy Tips with Richard C. Koman, bankruptcy attorney in Santa Rosa CA.
Bankruptcy can only be used once every eight years so if you're going to file, you need to make sure this is the right time to file.
Two kinds of bankruptcy: Chapter 7 and 13. Chapter 7 is a full discharge of debt. Chapter 13 is really a payment plan where you use disposable income to pay off creditors.
The reason Chapter 13 is popular is that if your house is under water, the second loan can be stripped away and that can mean you can afford to keep your house.
The steps of bankruptcy: Specifically, you need to take a prefiling consumer education class, after filing there is a meeting of creditors where the trustee asks you questions about your assets and debts, and there's one more class after that, the debtor financial education class. After that you'll get your discharge in 3-4 months.
And of course everybody can always go to richardkoman.com to find out more about these steps.
How does this effect my credit? People coming in to talk about bankruptcy always ask that and the answer is, isnt your credit pretty much destroyed? If you look at bankruptcy as a curtain coming down, on one side you have all the late payments, nonpayments, writeoffs and the risk that the person is going to file. After the curtain comes down, all that debt has been wiped out so you can afford a little new credit and you can't file for eight more years. You can easily start to rebuild your credit. A few years down the road you start looking like a pretty good customer instead of a pretty bad one.
