16 QUESTIONS YOU SHOULD ASK IF YOU'RE FACING DEBT PROBLEMS.

By Jack W. Dickerson

1. What is Bankruptcy?
2. Why are so many people filing Bankruptcy?
3. What are some warning signals that may indicate that I need Bankruptcy protection?
4. Are there alternatives to filing Bankruptcy?
5. How will bankruptcy protection help me?
6. What options will I have under a Bankruptcy filing?
7. Will I lose my home, auto or other possessions?
8. Do all creditors have to be listed, or can I pick and choose who I file Bankruptcy on?
9. How will I be hurt by filing for Bankruptcy protection?
10. Will I have to go to court?
11. Can I file my own Bankruptcy or do I need help?
12. How much does Bankruptcy cost?
13. What about “Zero Down” lawyers?
14. How should I select someone to help me get Bankruptcy protection?
15. Why should I choose the Dickerson Law Firm ?
16. How do I get started?

1. WHAT IS BANKRUPTCY?

     Bankruptcy is a legal, moral and ethical means of achieving release from debt bondage. This remedy has been a part of man's financial affairs throughout history. When trade reaches beyond the mere barter system, credit comes into play. And credit will produce unpaid debts whenever borrowers have financial misfortune.

Bankruptcy has its origins in the Holy Bible . In Deuteronomy 15: 1& 2, it is written:

At the end of every seven years thou shalt make a release. And this is the manner of the release; every creditor who lends ought unto his neighbor shall release it; he shall not exact it of his neighbor, or of his brother, because it is called the Lord's release.

Since the Middle Ages, Bankruptcy has been a part of England's Law. Its provision is a part of the United States Constitution and virtually every state constitution. Periodically the United States Congress will change the rules governing Bankruptcy.

The core concept of Bankruptcy is that the person who is in debt (the debtor) is more important than the debt itself. That is why we no longer have debtors' prison; why people are not sold into slavery over debts; and why modern Bankruptcy laws protect debtors from creditors who use coercive tactics to strip good honest people of their human dignity.

The cost to society is less when the debtor is allowed to discharge some of his or her debt, than would result if creditors were allowed their way, i.e. the loss of home, automobile, possessions, job and often the destruction of the debtor's family or his or her health.

Honest debtors, acting in good faith, should be allowed a fresh start, a second chance, allowing them to get on with their lives. Current Bankruptcy law allows the debtor a moral and legal right to “start over”, a concept which is the very essence of “the American Way”.

2. WHY ARE SO MANY PEOPLE FILING BANKRUPTCY?

There are several reasons:

A. The financial life of the typical American has changed dramatically since the last generation. In order to “just get by” most families rely on two breadwinners. This doubles the chances of financial hardship if one spouse loses his/her job or has a reduction in income.

B. Predator marketing of credit by credit card companies often results in consumers being buried by debt before they realize it. With high interest and penalties, it would often take two lifetimes for the debtor to pay his way out of this debt hole.

C.  The prevalence of gambling has also taken its toll on families striving to live the American Dream.

D. A recent credit-marketing scheme “payday loans” or check cashing services, are little more than loan sharks and their high interest rates and harsh collection efforts may force a debtor to seek Bankruptcy protection.

E. Corporate medical complexes have replaced the understanding family doctor with an onerous collection agency who will sue and garnishee wages when little Bobby breaks his collarbone. Medical costs are higher and the consequences of not being able to pay them are more swift and much more severe.

F. There is less social stigma to using a Bankruptcy remedy. Since there are more Bankruptcy filings neighbors and friends are more understanding and compassionate. It's likely that they, or one of their friends or family members, have also had to use this remedy.

3. WHAT ARE SOME WARNING SIGNALS THAT MAY INDICATE THAT I NEED BANKRUPTCY PROTECTION?

A. Using credit cards for everyday purchases such as meals, clothing, groceries or other items you used to pay cash for.

B. Consistently getting behind on important debt payments such as home, automobile, or furniture.

C.  Going more than three months paying only the minimum payments on your credit card bills.

D.  Being denied additional credit.

E.  You are now at the limit on your credit cards.

F. You use one credit card, or cash advances, to pay other credit card obligations or other debts.

G. You are being called by bill collectors.

H. You write checks to pay bills before you are able to deposit your pay check in your checking account.

I . A brief reduction in income could cause devastating financial impact.

J.  Bill collectors have threatened you with lawsuits, garnishment, repossessions of your automobile or foreclosure of your home.

4. ARE THERE ALTERNATIVES TO FILING BANKRUPTCY?

Yes, the following may be available as an alternative to Bankruptcy Protection:

A. CONSOLIDATION LOAN. Many loan marketers are urging people to mortgage the equity in their home to consolidate credit card, medical, and other debts into one payment. This option may have some appeal to someone who completely changes his or her lifestyle to never again fall into debt problems. Disadvantages include potential loss of your home, loss of hard earned equity in your house, and placing yourself in WORSE position should a Bankruptcy filing later become necessary.

B.  NEGOTIATING WITH CREDITORS YOURSELF. Some creditors may voluntarily agree to forego aggressive collection efforts, suspend further interest payments, or extend your payment period. If all creditors are cooperative and you can “work your way out” of debt, this is a good option. However, if one or two creditors do NOT agree and lawsuits, garnishments or other collection efforts result, this alternative may not be successful.

C. CREDIT COUNSELING AGENCIES. Many of these are an extension of the credit card industry and you may find their primary goal is to designate MORE of your family's income to credit card bills. This strategy may cause you to fall further behind on your home payment, car payment or living expenses. Some counseling services are actually designed to help YOU instead of the credit card industry. These agencies may help you develop sound spending, saving and budgeting habits, which may help resolve minor debt problems.

5. HOW WILL BANKRUPTCY PROTECTION HELP ME?

Immediately upon filing, every creditor (those you owe money to) will be under a federal order to leave you, your income, and your possessions alone. Foreclosures are stopped. Repossessions are stopped . Lawsuits are stopped . Garnishments are stopped . Harassing creditor calls are stopped . And even billings from creditors are stopped .

Many debts you owe may be completely discharged. Most filings result in credit card debts, medical bills, old taxes, debts owed on repossessed vehicles, and other unsecured debts being completely forgiven. You will get a fresh start, never again burdened by these debts.

Other debts may need to be paid. These include alimony or child support, home debts, car debts, other secured debts (furniture, jewelry, etc.), student loans and some recent income taxes. These can continue to be paid by you directly or can be consolidated and reorganized into a single monthly payment which may be more affordable.

6. WHAT OPTIONS WILL I HAVE UNDER A BANKRUPTCY FILING?

Most consumers will want to consider filing under either Chapter 7 or Chapter 13. A Chapter 12 is a reorganization for a family farm and a Chapter 11 is a reorganization for a corporation, partnership, business, or an individual.

CHAPTER 7 is the quickest most effective way to achieve the most debt relief available. It is typically completed from beginning to end in approximately three (3) months. Under Chapter 7, most unsecured debts (charge cards, medical bills, signature loans, old taxes, deficiencies on repossessed autos, etc.) will be completely discharged (wiped out).

Most Chapter 7's are “no asset” cases. This means that you don't have any extra unneeded possessions (see “Will I Lose…?” below). In “no asset” cases, none of your property or other possessions are sold to pay your debts. You get to keep all of your things to begin and complete your “fresh start”.

You may want to consider a Chapter 7 filing if you are not burdened by unmanageable taxes, student loans, or past child support and if you are current on your home, car, furniture and other secured debts, and will be able to stay current on these debts after the other bills are eliminated.

CHAPTER 13 is an excellent remedy for someone when the relief offered by Chapter 7 does not go far enough. If you are behind on your house or car payment (or if your car has been recently repossessed); or if you are behind on recent taxes or child support arrearage; then Chapter 13 will be a big help. Repossessed property can be ordered returned to you. Payment plans can be worked out to catch up on your house payments. These debts that need to be paid (along with furniture, appliances, taxes and student loan debts) can be “reorganized” into a monthly payment plan lasting three (3) to five (5) years. During this reorganization period your home, auto, income and your peace of mind are protected while you “get back on your feet.”

At the same time, you may eliminate the same debts that would be wiped out in a Chapter 7, or pay only what you can afford on them. If you do have non-exempt assets (discussed below) you may keep them in a Chapter 13 while paying creditors what they would have received if the assets had been sold with proceeds distributed in a Chapter 7.

Chapter 11 is sometimes referred to as a reorganization bankruptcy and usually involves a corporation, partnership, or other business (in certain situations individuals may file a Chapter 11 as well). In a Chapter 11, creditors are paid over time, pursuant to the terms of a confirmed plan, and the business continues in operation.

Every case is different and the discussion above is intended to give you a general idea of how Chapter 7, Chapter 11, and Chapter 13 “work”. Your eligibility for, and the advisability of, each remedy will depend on a multitude of factors, such as your income and expenses, the type and amounts of property (real estate and personal belongings) you own and the types of debts you owe. At the Dickerson Law Firm, a qualified debt relief attorney will review the relevant factors with you, explain your eligibility for relief under Chapter 7, Chapter 11, and Chapter 13, discuss how each remedy will benefit you, and then help you determine whether to file one of these remedies or pursue a non-bankruptcy remedy.

7. WILL I LOSE MY HOME, AUTO OR OTHER POSSESSIONS?

No. In most Bankruptcy filings no assets are lost. Liberal “exemption” rules allow you to keep a certain value interest in your home, a vehicle for each filer, furniture, appliances, clothing, jewelry, qualified pension plan, and other important assets. A “wild card” exemption may be available to protect other belongings “of whatever description”.

All of your possessions must be listed and an experienced Bankruptcy attorney will be able to fully explain your exemption rights and explain how your possessions can be protected.

8. DO ALL CREDITORS HAVE TO BE LISTED, OR CAN I PICK AND CHOOSE WHO I FILE BANKRUPTCY ON?

All creditors (everyone you owe money to) must be fully disclosed just as all assets (everything you own or claim an interest in) must be listed. You can usually achieve what you want to accomplish without omitting debts or property. More importantly, filing for Bankruptcy protection with intentionally incomplete or inaccurate information can result in severe penalties.

Even though all debts must be listed, that does not mean that all debts result in a Bankruptcy discharge. For example, you can keep and pay for your home, car, furniture or other secured debts. You may set up payments for a co-signed debt and protect your co-signer. In a Chapter 7 you may reaffirm certain debts (Sears, Lowes, etc.) and continue paying those debts while enjoying future credit privileges.

Again, an experienced qualified debt relief attorney will discuss how you may best achieve your goals while safely filing for protection and following the Bankruptcy rules.

9. HOW WILL I BE HURT BY FILING FOR BANKRUPTCY PROTECTION?

We no longer have debtors' prisons and filing for Bankruptcy relief is protected by federal law. You cannot lose your job or be discriminated on the job because of a Bankruptcy filing.

The fact that you filed Bankruptcy (Chapter 7, Chapter 11 or Chapter 13 consolidation) will be on your credit report for up to ten (10) years and this factor may be considered along with the other factors in determining whether future credit will be advanced.

10. WILL I HAVE TO GO TO COURT?

For Chapter 7 and Chapter 13 - no, in most cases Bankruptcy protection is achieved without attending a courtroom proceeding. You will be required to attend a 341 Meeting. This is an opportunity for your Chapter 7 or Chapter 13 Trustee to review your filing with you to be sure the information is correct. The meeting usually takes 5 to 10 minutes and your attorney (or another attorney assisting him or her) will be there with you. Although creditors may appear and ask questions about your filing, they rarely do.

For Chapter 11- you will be required to attend a Debtor Interview with the U.S. Trustee's Office, a Chapter 11 341 Meeting, and a Confirmation Hearing. The length of time required for the Chapter 11 341 Meeting will depend on the size of the business (or amount of individual assets) and/or the number of creditors.

11. CAN I FILE MY OWN BANKRUPTCY OR DO I NEED HELP?

For Chapter 7 and Chapter 13 - yes, and yes. You may file your own Bankruptcy yourself but the experience will likely be somewhere between cutting your own hair or doing your own root canal. That is, you can “ do it yourself ” but the process would likely be difficult or painful and you probably won't like the end result. For Chapter 11- in bankruptcy court corporations are required to be represented by an attorney.

As in most serious matters, relying on a professional is a good idea. The attorneys at Dickerson Law Firm work with people with limited finances; we charge reasonable and affordable fees; and we go the extra mile to make our services available to you.

We try hard to build good loyal relationships with our clients in hope of earning future referrals. We strive to meet the needs of all who turn to us for help.

12. HOW MUCH DOES BANKRUPTCY COST?

The filing fee for a Chapter 7 is $299 and the filing fee for a Chapter 13 is $274. This is the amount the clerk charges for filing a case so it must be paid, sooner or later. The filing fee for a Chapter 11 is $1,039.

In most cases we require no attorney fees to begin a Chapter 13 filing. Our fees are set by the court so you know you are getting a fair fee. The approved amount is paid out over three (3) to five (5) years along with the debts that need to be paid (see the explanation of Chapter 13 above).

Attorney fees for Chapter 11 are based on the complexity of your case and will be quoted during the initial consultation.

We charge absolutely nothing for a complete debt relief consultation. Fees will be fully discussed and I am confident we can provide quality legal services for a fee that you can afford.

Bankruptcy is a serious legal matter and I feel strongly that seeking out a “bargain basement” attorney is not a good idea. But if you are shopping lawyers for price, I hope you will also visit the professionals at Dickerson Law Firm . I think you'll learn that you can afford skill, ability and experience.

13. WHAT ABOUT “ZERO DOWN” LAWYERS?

Two adages come immediately to mind. “There's no such thing as a free lunch” and “You usually get what you pay for.” Kidding aside, I think the “Zero Down” promotion can be misleading. Although the attorney may not charge you any money “up front”, you will have to promptly pay your filing fee (see above) to the clerk. If it is not paid on time, your case will be dismissed. Then you'll have to pay two filing fees to get it re-filed, your possessions may be needlessly placed in jeopardy, and the process is a needless nuisance to the clerk, the judge, the trustee and to you .

The professionals at Dickerson Law Firm believe that the better policy is to be “ up front ” with you. The filing fee is collected at the time you hire us and then is paid to the clerk when your case is filed. You can then rest assured that your case will not be “kicked out” causing you to start over again.

14. HOW SHOULD I SELECT SOMEONE TO HELP ME GET BANKRUPTCY PROTECTION?

First of all, TALK TO AN ATTORNEY!!! I know this may seem like simple advice but you must be careful. Some non-attorney Bankruptcy filers promote themselves as a viable alternative to professional representation by a licensed attorney. They are not. Bankruptcy laws are complex and everyone who files Bankruptcy should be represented by an experienced, capable, licensed attorney.

If you use a law firm be certain that you will be provided a full consultation with a licensed attorney before you file bankruptcy. Otherwise, you may find yourself in Bankruptcy, fully filed, without ever having seen, met or even talked to a real lawyer.

Your best protection against these results is to ASK QUESTIONS such as: “Who will I be speaking with from your office?;” “Is he or she a licensed attorney?;” “If so what is their bar number?;” “Will I have an actual consultation with a licensed attorney before I file Bankruptcy?;” “How much experience do your attorneys have?;” “If I go to court or a 341 meeting will the attorney be there with me?” If you don't like the answers to these questions, you may want to call another office.

The BEST way to select an attorney is to ask someone you trust. If you've worked with an attorney in the past on another matter, ask him or her if they can recommend an attorney. If you do not know an attorney, ask members of your church, a co-worker, family member, or a neighbor if they know of a good lawyer. Finally you can call the Arkansas Bar Association, or your county bar association. They likely will give you the names of several experienced attorneys you can choose from.

15. WHY SHOULD I CHOOSE THE DICKERSON LAW FIRM ?

EXPERIENCE - We've been “ Helping Good People With Bad Debt Problems ” for over 17 years, helping thousands of Arkansans “ Get Debt Relief Now ”. In 2008, attorneys at Dickerson Law Firm filed over 1,500 Bankruptcy cases in the Hot Springs, Pine Bluff, El Dorado and Texarkana districts. In the Hot Springs District, where our central office is located, we filed 44% of the cases filed by all attorneys in 2008. In the Pine Bluff District, we handled 41% of all cases filed as well. In our El Dorado office, we positioned ourselves as the leading debt relief law firm in that district and filed 44% of all cases. (Statistics based on filing information compiled by the Daily Record for bankruptcy filings in 2008)

ACCESSIBILITY – We have fully staffed offices in Hot Springs, Pine Bluff, and El Dorado. Our offices are strategically located in an effort to better serve the working men and women of Arkansas.

COMPASSION – We genuinely care about our clients and understand that seeking debt relief advice may very well be the most difficult thing you've ever done. We know our clients are good, honest, hardworking folks going through difficult times and our goal is to treat each one with courtesy, dignity and respect.

SKILL and ABILITY – The primary focus of our practice has been helping debtors receive release from debt bondage. We have a firm policy of not representing creditors. We absolutely do not work for banks, credit card companies, or collection agents. Both our attorney and paralegal staff receive regular in-house training and regularly and frequently attend continuing legal education programs focused on Bankruptcy law. We work hard and study long to help ensure that you are fully satisfied with your attorney selection. Our efforts are helping us grow. Twenty Two percent (22%) of our new cases opened resulted from referrals by clients we have previously served. Eighteen percent (18%) of new cases opened were clients we have previously helped. (Information based on statistics compiled by Dickerson Law Firm in 2008 based on information provided by clients in response to the question, “Where did you hear about the Dickerson Law Firm and the service we provide.” Some clients provided multiple responses.)

TECHNOLOGY – The Dickerson Law Firm uses a state-of-the-art NETWORKED computer system, which allows our staff to communicate by computer, instantly throughout the three offices.

Our electronic filing system allows us to input the required information to prepare and ready for signing, the petition, plan, and schedules to create a Bankruptcy filing in less than one hour. Changes or additions, or even a change from Chapter 7 to Chapter 13 can be completed with a keystroke.

Our telephone system allows clients to call and leave a “voicemail” message to their caseworker twenty-four hours a day. Of course, person to person contact is also available. Appointments with our legal staff, for face to face or telephone consultations are scheduled at the client's convenience.

Our technology advances are not designed to merely give us “bragging rights” in the legal community (although they do!!). We use the latest technology to give us a competitive edge in dealing with big banks and credit card conglomerates and to help make sure every Arkansan, regardless of financial status, will receive quality legal representation. Dickerson Law Firm's technology advantage is so great that when the bankruptcy courts in Arkansas started its new electronic filing system, they selected Dickerson Law Firm to serve on the pilot program. We were the first firm in the state to successfully convert to 100% electronic filing.

CAPABLE STAFF – Our current team is comprised of four (4) attorneys, six (6) paralegals and over twenty (20) legal/administrative assistants and support staff. The staff of Dickerson Law Firm, P.A. are dedicated and highly qualified and they stand firm in their commitment to provide quality legal services to Arkansans. The experience these individuals bring to the firm over 300 years combined with their unwavering dedication to the mission and philosophy of the law firm have made us the leading debt relief firm in Arkansas.

16. HOW DO I GET STARTED?

Call our office at 1-800-STOP DEBT. Our staff will schedule an office appointment at any of our three offices (Hot Springs, Pine Bluff, or El Dorado).

We will need you to provide a recent pay stub, as well as a complete list of everyone you owe money to. You can just bring all the bills to our office if that is easier. We will discuss your budget to be sure you are allowed to keep sufficient amount of your income to meet all your necessary and reasonable living expenses. We will also discuss your assets and your debts to be sure your free consultation accurately addresses your eligibility for Bankruptcy protection.

You will speak personally with a licensed attorney , trained and experienced in Bankruptcy matters. He or she will give you complete information about your remedies under the Bankruptcy Code and then allow you to ask all the questions you may have about filing for Bankruptcy protection.

This consultation is absolutely free and confidential. If you choose not to file or choose not to hire our law firm, you will owe us nothing and no one will ever know you came to speak with us.

Still have questions? Please click the Bankruptcy Basics link below to view videos provided by the U.S. courts.

Bankruptcy Basics

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We are a debt relief law firm. We help people file for relief under the bankruptcy code..