Keep reading for an exclusive Q&A interview with HoganWillig’s Paul Pochepan regarding bankruptcy and how one may qualify to file.
Q: What is Bankruptcy?
A: Bankruptcy was designed as a debt relief option for people who are having severe financial difficulties. It’s an option for people needing a fresh start financially.
Q: Who can apply?
A: An individual, spouses together, or a corporation or other entity. There are many different types of bankruptcy.
Q: How does one qualify for bankruptcy?
A: We have to look at the individual or entity’s overall circumstances. To evaluate the options, we have to first look at the filer’s income, assets, and type of debt. Do they have credit card debt? Is there a house or other real property in foreclosure? Do they owe back taxes? What’s their income-to-expense ratio? Do they wish to continue or dissolve the corporation? The approach I’ll take when helping a client is really determined by the answers to these questions.
Q: How can you, specifically, help a potential bankruptcy client?
A: I will address all of their questions and concerns about what will happen and how the process works. I will assess their situation regarding the factors I mentioned previously and I will explain what the options are and if there are other options available..
Q: What is the process of filing, if one is qualified?
A: The law requires an individual or entity to provide documents portraying their financial situation. The first step for me, once a client says they wish to file, is advising of all the specific pieces of information I will need. Examples include proof of income, recent tax returns, statements describing who they owe, and a list of all assets. Next, the filing party will have to partake in a credit counseling session specifically designed for bankruptcy filers. This can be completed online, in person, or by phone. Then, we’d need to prepare, review and execute a petition. This is followed by a meeting with a trustee and/or a judge depending on the type of filing. There’s even more to the whole process which I would explain in-depth with a potential client.
Q: What happens after bankruptcy is granted?
A: This is what’s known as a discharge. A bankruptcy discharge releases the filer from personal liability for certain specified types of debt. The filer is no longer legally required to pay on the debts that are discharged.
Q: How long will a bankruptcy affect your credit?
A: Depending on the type of bankruptcy one files, it generally appears on an individual’s credit report for 7 to 10 years.
Q: Do you provide preventative counsel if someone may be close to filing?
A: Absolutely. that ties back in with discussing their options. For example, maybe someone could focus on paying off debt with higher interest rates first. I can advise someone to potentially get rid of certain assets to pay others off. You don’t have to go to a financial adviser if you need counseling, I can help to see what can be done.
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