Pre-Bankruptcy Counseling

Springboard is a government-approved nonprofit organization with Bankruptcy Counselors available to assist you. Providing authorized pre-bankruptcy counseling, debtor educations and certificates.

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Frequently Asked Questions About Bankruptcy

Bankruptcy Law BooksIn October 2005, Springboard Nonprofit Credit Management became - one of the original four - credit counseling agencies approved by Executive Office of US Trustee to provide pre-filing counseling under new bankruptcy law.

As a result of our inaugural pre-bankruptcy counseling experience, our credit counselors have developed an internal library of answers to frequently asked pre-bankruptcy questions. We listed some of the most popular consumer bankruptcy questions below. We hope our answers help shed some light on common bankruptcy myths.

Click the question boxes below to reveal the answer:

Yes. They can take up to 25% of your take-home pay. Filing bankruptcy can stop the wage assessment and probably wipe out the creditor's claims entirely.

Yes. No creditor may contact you in any way after you file your bankruptcy petition. In most cases, your attorney will notify your creditors prior to filing the bankruptcy petition so the creditors stop calling you.

In most cases, you must include all your credit cards. There are some instances where you can keep a credit card, but you will want to discuss each situation with your attorney.

Yes or No. You can speak with a Bankruptcy Counselor and begin your Debtor Education course at Springboard before - or - after you meet with an attorney.

It hurts your credit, but if you are considering bankruptcy, chances are your credit is already affected. Bankruptcy allows you to start to rebuild your credit.

Most people have difficulty obtaining credit within one year of the bankruptcy. You can buy a car at a high interest rate with a substantial amount down. After the first year, things get easier. Many mortgage lenders will grant you a loan at their lowest interest rates four years after the bankruptcy. Bankruptcy stays on your credit reports 7 to 10 years.

The pre-petition bankruptcy counseling completion certificate is valid for 180 days and the pre-discharge debtor education is valid until your court ordered completion date for discharge.

In a Chapter 7, you attend the 341(a) Meeting of the Creditors approximately one month after you file your bankruptcy petition. You then receive the discharge about two months after that.

In a Chapter 13, you attend the 341(a) Meeting of the Creditors approximately 45 days after your bankruptcy petition is filed. The Confirmation hearing may be between 7 and 45 days after the 341(a) Meeting of the Creditors, depending on where your petition is filed. Once your plan is confirmed, you make your payments for three years and then receive the discharge.

Note: In either chapter, you will need to complete a pre-petition bankruptcy counseling session before you file bankruptcy and you must complete a debtor education course in order to receive a discharge on your bankruptcy.

We have counselors standing by to take your calls. No appointment is necessary. Simply call us at 1-888-425-3453 to speak directly to a bankruptcy counselor.

Under the new bankruptcy law, The Executive Office for United States Trustees requires that you participate in a counseling session that may take up to 90 minutes or longer. Sessions may be shorter or longer, depending on your situation, amount of information to be gathered, number of questions you ask, etc.

Under bankruptcy law, the Executive Office for United States Trustees requires that you participate in a 2-hour debtor education course.

Springboard charges $55.00 (which covers single filers and joint filers if counseled in the same session) for the pre-petition bankruptcy counseling by telephone or in person, and $45.00 by Internet and $55.00 (covers single filers and joint filers if completed at the same time) for the Pre-discharge Debtor Education course. Both include completion certificates.

This fee covers single filers and joint filers, if counseled in the same session. In some cases, the fees may be waived. Combination discounts are also available if you purchase the Pre-petition Bankruptcy Counseling from us and return to our agency (after filing bankruptcy) for your Pre-discharge Debtor Education you will receive a discount on the Debtor Education course.

No. Sometimes only one spouse files, but that is an exception. You may be able to file without your spouse if you have been married a short time or have all the debt in your name alone. Your spouse will be involved in a Chapter 13 whether his or her name is on the petition or not.

Yes. Springboard is approved to issue Pre-petition Bankruptcy Counseling and Pre-discharge Debtor Education certificates in compliance with the bankruptcy code. Approval to issue certificates in compliance with the Bankruptcy Code, the approval does not endorse or assure the quality of an agency's service.

(Although Springboard is approved to issue certificates in compliance with the Bankruptcy Code, the approval does not endorse or assure the quality of an Agency's services.)

For Chapter 7's, that depends on your experience in reading forms, interpreting the U.S. Bankruptcy Code, and talking under pressure. For most people, the answer is yes. Attorneys do more than fill out the forms. They also attend the 341 (a) Meeting of the Creditors, negotiate with the creditors, advise clients about offers to accept or reject, and give legal advice in general. A paralegal can fill out the forms, but cannot represent the debtor or give legal advice about how to fill out the forms, or what the law says about your particular situation.

In the 341(a) Meeting of the Creditors, some creditors such as Sears or Best Buy may show up and ask about the property you bought from them. There is a trustee who reviews your bankruptcy petition and determines if you have any assets to give the unsecured creditors in Chapter 7's. Your attorney, in most cases, may help you on your behalf with those creditors at these meetings.

A 60/60 Plan is another type of debt management plan. A 60/60 Plan is a Less Than Full Balance (LTFB) DMP. Under bankruptcy law an approved nonprofit budget and credit counseling agency may propose to a creditor a payment plan on unsecured consumer debts of at least 60 percent of the debt over a period not longer than the original loan, or reasonable extension with a maximum repayment period of 60 months - hence a 60/60.

Submitting a LTFB DMP proposal to an unsecured creditor does not guarantee acceptance and the creditor may counter with an amount they would accept that is higher than the 60% proposal. Secured accounts like your house and car do not qualify for a 60/60 Plan. While some creditors may reduce interest rates in a DMP or 60/60 they usually do not eliminate the interest. Some creditors refer to the LTFB DMP as a Pre-Bankruptcy DMP. Springboard's 60/60 Plan (patent pending) will be available when the EOUST (Executive Office for United States Trustees) issues guidance on the administration of these plans.

One of the reasons people file bankruptcy is to get a "fresh start". A discharge is a Court order which states that you do not have to pay most of your debts. Some debts cannot be discharged. For example, you cannot discharge debts for:

  • most taxes
  • child support
  • alimony
  • student loans
  • court fines, criminal restitution and personal injury caused by driving under the influence of alcohol or drugs

The discharge only applies to debts that arose before the date you filed. Also, if the judge finds that you received money or property by fraud, that debt may not be discharged. It is important to list all your property and debts in your bankruptcy schedules. If you do not list a debt, for example, it is possible the debt will not be discharged. The judge can also deny your discharge if you do something dishonest in connection with your bankruptcy case, such as destroy or hide property, falsify records, or lie, or if you disobey a Court order. You can only receive a chapter 7 discharge once every eight years.

No one can make you pay a debt that has been discharged, but you can voluntarily pay any debt you wish to pay. You do not have to sign a reaffirmation agreement or any other kind of document to do this. Some creditors hold a secured claim (for example, the bank that holds the mortgage on your house or the loan company that has a lien on your car). You do not have to pay a secured claim if the debt is discharged, but the creditor can still take the property.

A Debt Management Plan (DMP) consolidates only unsecured debts. A consumer would still be responsible for negotiating terms with their secured creditors -- such as a mortgage or auto lender. A DMP is not a loan. A standard DMP allows a consumer to consolidate all or most of their credit cards, medical bills and other unsecured debts into one monthly payment.

Each unsecured creditor is different and some offer voluntary "concessions" such as lowering interest rates, re-aging a delinquent account, or waiving late and/or over-limit fees. These concessions, if offered, vary significantly from creditor to creditor.

Even if a debt can be discharged, you may have special reasons why you want to promise to pay it. For example, you may want to work out a plan with the bank to keep your car. To promise to pay that debt, you must sign and file a reaffirmation agreement with the Court. Reaffirmation agreements are under special rules and are voluntary. They are not required by bankruptcy law or by any other law. Reaffirmation agreements:

  • must be voluntary;
  • must not place too heavy a burden on you or your family;
  • must be in your best interest; and
  • can be canceled anytime before the Court issues your discharge or within 60 days after the agreement is filed with the Court, whichever gives you the most time.

If you are an individual and you are not represented by an attorney, the Court must hold a hearing to decide whether to approve the reaffirmation agreement. The agreement will not be legally binding until the Court approves it. If you reaffirm a debt and then fail to pay it, you owe the debt as though there was no bankruptcy. The debt will not be discharged and the creditor can take action to recover any property on which it has a lien or mortgage. The creditor can also take legal action to recover a judgment against you.

Yes. Whether you file a chapter 7 or 13 bankruptcy petition, you have to attend a § 341(a) Meeting of the Creditors in either chapter. These usually last less than one hour, but can last all day in a Chapter 13.

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