“Zero Down” or low money down Bankruptcy Filing – are these offers the right option for you? Or, are these offers Gimmicks that may in fact potentially harm you and your family?

Can I file bankruptcy for no money down? 

You may have seen advertising that promises to file a bankruptcy with “no money down.” 
This can sound like an attractive option when a person is faced with pressure from creditors, wage garnishment, possible repossession of an automobile or foreclosure.  But, it is important to know the typical cost, both short term and long term of this option and whether or not a “no money down” bankruptcy filing is right for you and your family.  Despite how attractive it may sound at first glance, “no money down bankruptcy filing” is not right for everyone and in fact can be potentially detrimental for you and your family if it is not the right option for you.

What is a “no money down” bankruptcy filing?  To answer this question it is important to recognize that in order to file bankruptcy for “no money down” you are likely being steered into a Chapter 13 repayment plan.  While Chapter 13 may be in your best interests, or it may be the only bankruptcy you qualify for, it may also be true that you are eligible for Chapter 7 bankruptcy, where you simply wipe out debt without payments to unsecured creditors.  In general, Chapter 7 bankruptcy is less expensive than Chapter 13 bankruptcy and does not last as long as Chapter 13 bankruptcy.  Chapter 13 may delay efforts to rebuild your credit after bankruptcy.  For a number of reasons Chapter 7 may be a better option for you and your family.

It is important for you to learn what you and your family qualify for and which option best serves you and your family and maximizes your success in rebuilding your financial future.  The choice of filing Chapter 13 versus Chapter 7 bankruptcy is one of the most important factors in rebuilding your financial life.  I would urge you not to rely alone on information in an on-line ad or on a web site (even this one).  Instead you are much better served by an in-person personalized assessment by an experienced bankruptcy attorney who will guide you in  determining whether Chapter 7 or Chapter 13 bankruptcy is the best option for you. 

What about advertising that promises to file bankruptcy for “$399.00?”

Advertising that promises to ”File Chapter 7 for no or very little money down,” or  “File bankruptcy for only $399.00 down” may also seem attractive at first glance.   However, entrusting your financial future to a “file now pay later” gimmick may not be in your best interests and may actually keep you from getting a fresh financial start.    

Attorney fees compensate an attorney for services performed and can be a good investment for you and your family’s future.  However, some attorneys artificially attempt to “unbundle” bankruptcy services.  This means that an attorney offers a written agreement before filing a bankruptcy that artificially divides up the fees for services between “before filing” (usually including the petition – essentially the cover sheet of a bankruptcy case) and “after” the cover sheet is filed with the bankruptcy court. Bankruptcy courts have determined that such an artificial division or “unbundling of services,” with payment of insubstantial fees before the case is filed and an agreement to pay most of the fees after the case is filed, creates a potential conflict of interest between the attorney and the client, may create undue and improper pressure on the client to pay the attorney, may be directly contrary to the bankruptcy rules and is almost certainly disfavored by courts even under the most carefully crafted circumstances.  

For Chapter 7 bankruptcy cases there is law which indicates that if an attorney is owed money at the time the case is filed that attorney is a creditor of his or her client and that debt may be subject to discharge as well.   Therefore, as a policy matter most attorneys will not file a chapter 7 bankruptcy case until the attorney fees are paid.   In Chapter 7 cases it may in fact be a conflict of interest for an attorney to be a creditor in a client’s case.  If fees owed to an attorney are subject to discharge the attorney may not collect or compel the client to pay the attorney for services that are an essential part of the bankruptcy filing process after the case is filed.  If you enter into such an agreement your attorney, who you hire to be your advocate, could become your adversary.  Perhaps you may be sued by your own attorney.  This is not the sort of attorney relationship anyone would want.  It is not the kind of relationship that is best for you and your family

Which type of bankruptcy, Chapter 7 or Chapter 13 is best for me?

This is a critically important question.  The answer to this question can only be reached after you meet with an attorney and discuss your circumstances and your present situation.  For this reason you should not rely on telephone advice or improperly provided legal advice from someone who works at an attorney’s office who is not an attorney, therefore not qualified to assess your situation and advise you on your debt relief options. 

 The experienced bankruptcy attorneys at Kinkade & Associates would be pleased to meet with you and discuss your situation in a FREE in-person initial consultation.  Remember, your free initial consultation is in person and with an experienced local bankruptcy attorney that concentrates in debt relief.  Your financial future is too important to settle for less than the individual personalized service Kinkade & Associates provides.

Learn your options.  Do not fall for on-line or other advertising gimmicks or “one size fits all advice.”  Instead, call Kinkade and Associates to learn what is best for you and your family.