QUESTION: How much does it cost to file for bankruptcy and how will I be able to afford it?
ANSWER: The cost of bankruptcy depends on the complexity of your situation and the type of bankruptcy you need to file, whether it be chapter 7 bankruptcy, chapter 13 bankruptcy or chapter 11 bankruptcy. We are a small firm and get to know each of our clients on a personal level and guide them through each stage of their case. We pride ourselves in offering individualized attention to our clients while offering competitive fees. Most of our fees are flat fees meaning you will not typically owe any further fees after the retainer fee is paid. As for payment, we do offer payment plans. We may tell clients to stop making payments to creditors, particularly unsecured creditors, after they have made the decision to file for bankruptcy. Clients are usually able to save for the retainer by using the funds previously allotted for their minimum payments. We have also found that family is willing to pay for a client's retainer fees when they know this will be the last time they will need to lend money; and that we will be working with the client on learning to live on a "no surprise budget" and will hopefully not end up in this situation again in the future.
QUESTION: Do I have to file for bankruptcy if I come see you?
ANSWER: No. We will review your financial situation in detail and give you numerous suggestions on how to resolve, including options outside of bankruptcy.
QUESTION: What property can I keep if I file bankruptcy?
ANSWER: In a bankruptcy, people have two (2) major goals: to hold on to as many assets as they can and to be discharged from their debt. As far as the assets they can maintain, in most cases people will have the option of retaining almost all their assets or property. There are, of course exceptions to this which would depend on different factors such as: a.) Do you want to keep the asset? b.) Do you need the asset? c.) If there is a lien on the asset such as you owe money on your home or car, are you up to date with payments and can you continue to make payments? d.) Is there equity in the asset? In other words, is the asset worth more than what you owe against it? e.) What portion of the equity can you protect?
QUESTION: Can I recover from bankruptcy and how long will it take?
SHORT ANSWER: Yes, most definitely. Normally three (3) years.
LONGER ANSWER: We set four (4) overall goals for our clients: 1.) Get out of the financial problems that you are in; 2.) How to stay out of financial problems; 3.) Have regular credit again as soon as possible; 4.) Have a vision for financial success in the future which we define as own your own home, be debt free, have money in the bank, be ready to retire. There are three (3) things you must do to achieve these goals. Conversely if you do not do these things, you will not achieve these goals. You need to have a clean credit report; have a full banking relationship with some bank you do not owe money; and learn to establish and live on a no surprise budget. The clients of the Campbell Law Firm understand that you will recover from the bankruptcy, normally within three (3) years and you will achieve financial success with some adjustment to that depending upon your age and personal circumstance, if you will commit to doing these three (3) things.
QUESTION: Who qualifies for bankruptcy?
ANSWER: Anyone who owes money could potentially file bankruptcy. Of course, bankruptcy should be avoided in every way possible. There are numerous options short of filing bankruptcy including going to Consumer Credit Counseling and workouts.
QUESTION: Will everyone find out that I filed for Bankruptcy?
ANSWER: Probably Not. Unless you’re a prominent person or a major corporation and the Bankruptcy filing is picked up by the mainstream media, the chances are good that the only people who will ever know that you filed for bankruptcy are your creditors and the people you tell. While your bankruptcy is a matter of public record, unless someone is specifically trying to track down information on you, there is little chance that anyone will know you filed Bankruptcy.
QUESTION: Will Bankruptcy effect our ability to rent an apartment in the future?
ANSWER: Probably not. If a landlord pulls your credit report, they will see the Bankruptcy but, if you pay a month's rent as a security deposit, it should not be an issue. Corporate leasing agencies are more likely to pull a credit report than a private owner. A private owner will probably not pull credit or, as long as they have a month's rent as security, it should not be an issue.
QUESTION: If I am married, does my spouse have to file for Bankruptcy?
ANSWER: No. If one spouse has most or all of the debt, the other spouse does not necessarily need to file Bankruptcy. You will need to make sure both spouses are not responsible for the debt. Three (3) ways to determine if you are responsible for a debt include (1) whether you have signing authority (if you do, you are most likely responsible for the debt) (2) whether the bill coming is in your name (if it is, you are most likely responsible for the debt) (3) whether the debt is on your credit report (if it is, you are most likely responsible for the debt). If you dispute a debt that is listed on your credit report, we will give you a guide to disputing your credit report.
In cases where both a husband and wife have a lot of debt, either individually or jointly, it makes sense and saves money for them to both file a joint case (but it is not required). It is the same price whether one or both spouses file for Bankruptcy. In the alternative, if you do not have joint debt, one spouse’s filing Bankruptcy will not affect the other spouse’s credit. You will still be responsible for paying the non-filing spouse’s debt if he/she decides not to file for Bankruptcy.
QUESTION: Is there a Minimum Amount of Debt Required to File for Bankruptcy?
ANSWER: No. People with little or no income have filed for Bankruptcy with debt amounts that would be very manageable for those with higher income. There is no minimum amount of debt that you have to have. There is a maximum amount of debt you can have to file for Chapter 13 Bankruptcy, which is $1,257,850.00 in secured debt (such as mortgages and car loans) or $419,275.00 in unsecured debt (such as credit cards and medical bills). However, there are no maximums for Chapters 7 or 11 Bankruptcy.
QUESTION: What is the mean's test?
ANSWER: In a Chapter 7 Bankruptcy, you need to pass the Means Test and the Good Faith Test. The Means Test takes a look at your gross income from all sources in six months prior to the filing of the bankruptcy. The Good Faith Test takes a look at your income at the time of the filing and in the foreseeable future. It also takes a look at your expenses. If you do not pass the mean’s test and/ or the good faith test, you will have to file or convert a case to Chapter 13. In that situation, we will work with you on a plan/ budget that you believe you can afford that should also be acceptable to the court/ Chapter 13 trustee. We will generally have an idea whether you should be able to pass the means test or not in your initial consultation, but we will need to eventually review/ input all of your income/ expenses from the last six months to know for sure. The SC median income levels are below:
Family Size 1: $47,487.00
Family Size 2: $61,529.00
Family Size 3: $66,595.00
Family Size 4: $81,226.00
Family Size 5: $90,226.00
Family Size 6: $99,226.00
QUESTION: Can I keep a credit card if I file for Bankruptcy?
ANSWER: Generally not. Although it depends on the lender, usually creditors will automatically cancel cards upon filing, sometimes even those with zero balances. A lot of people like to keep/ have a credit card just in case a card is required for a certain transaction such as to rent a car. There are many creditors who will work with people in these situations so it should not be an issue to get a credit card, if needed, after filing Bankruptcy. The plan would be to pay the card off each month. We will work with you on re-establishing your credit and learning to live on a no-surprise budget with the ultimate goal being to live on cash and not fall into debt again in the future.
QUESTION: What are the SC Bankruptcy exemptions?
ANSWER: The purpose of bankruptcy is to give you a fresh start; and it would not be much of a fresh start if you lost all of your assets. Accordingly, you can claim bankruptcy exemptions to help you to protect most (in some cases all) of your assets. When you file Chapter 7 bankruptcy, a trustee is appointed to examine your assets to determine if liquidation of the assets would pay your creditors. If an asset does not have sufficient equity to provide a meaningful distribution to your creditors, the bankruptcy trustee will not sell it to pay your creditors. The property you are allowed to keep in a Chapter 7 bankruptcy depends on many factors including the value of the asset, whether it has a lien, if is individually or jointly owned, the exemption you are allowed to claim, among other factors.
Many assets, such as retirement accounts, are completely exempt. Exemptions are complicated and you should consult a bankruptcy attorney to help with a liquidation analysis, but the main SC exemptions for the purposes of calculating equity are as follows:
S.C. Code Ann. § 15-41-30(A)(1)(a) Homestead $63,250 individual ; $126,475 joint
S.C. Code Ann. § 15-41-30(A)(2) Motor vehicle $6,325 individual; $12,650 joint
S.C. Code Ann. § 15-41-30(A)(3) Household furnishings and goods $5,050 individual; $10,100 joint
S.C. Code Ann. § 15-41-30(A)(4) Jewelry $1,275 individual; $2,550 joint
S.C. Code Ann. § 15-41-30(A)(5) Cash & liquid assets, only if not claiming homestead $6,325 individual; $12,650 joint
S.C. Code Ann. § 15-41-30(A)(6) Tools of trade, $1,900 individual $3,800 joint
S.C. Code Ann. § 15-41-30(A)(7) Any property of unused exemptions (known as wildcard) $6,325 individual; $12,650 joint
QUESTION: If I file for Bankruptcy, will I have to go to court?
ANSWER: You are required to appear for something called a meeting of creditors, discussed here.
F.A.Q.'s on Lawsuits/ Judgments
Question: What is a lawsuit?
Answer: A lawsuit is a civil legal action filed in state court. Typically a creditor is suing a debtor to collect money owed.
Question: How long does a creditor have to file a lawsuit?
Answer: In South Carolina, a creditor generally has three (3) years (known as the statute of limitations) from the date of the last payment made in which to file a lawsuit or else the creditor is barred from suing you. The statute of limitations typically begins once you fail to make payments on the debt. Note: A creditor/ collection agency can continue to contact you even though the statute of limitations has passed. Also note: A debtor can “revive” the debt by acknowledging that it is owed in writing or by paying any part of the debt. Once a debt is revived, it is no longer barred by the statute of limitations and the creditor may be able to file a lawsuit.
Question: What do I do if I am served with a lawsuit?
Answer: If you are served with a lawsuit, you should let us know right away. You have 30 days from the day you were served to either file an answer or extension of time to file an answer. Your options are generally as follows: a. File an answer or extension yourself. You can go online to find a sample form; b. Retain the services of an attorney to request an extension or file an answer; c. Let it go to judgment. It would be best to not allow a judgment be entered against you but there are ways to resolve in the bankruptcy. d. File Bankruptcy before a default judgment can be entered which will prevent the judgment from being entered.
Question: What does it mean to have a judgment against you?
Answer: A judgment is an automatic lien on any real estate you own in the county where it is filed. A judgment creditor can also have the sheriff sell your non-exempt assets.
Question: How long is a judgment collectable in South Carolina?
Answer: 10 years
Question: Will a bankruptcy discharge a judgment?
Answer: This is a little complicated, especially if you own real estate that the judgment attached to prior to the bankruptcy filing. If you obtain a discharge of your debts in the bankruptcy, which means that the debts are legally forgiven, the judgment debt will be discharged but the judgment lien against your real estate may still exist, much like a mortgage lien would continue to exist even if you were discharged of the mortgage debt. The good news is that you will probably be able to avoid (get rid of) the judgment through a process called judgment lien avoidance. If you do not own real estate, once you have had a discharge for more than one year, you can move in the court where the judgment was entered to have the judgment expunged. We can assist with the expungement.
Question: Will I have to file bankruptcy if I have a judgment?
Answer: While having a judgment lien against you might indicate that you should looking seriously at filing bankruptcy, you certainly can carry on a fairly normal life with a judgment against you. Your credit will not be good and you may not be able to sell your home or refinance your home without paying off the lien; your non- exempt assets, if any, could be at risk, like a vehicle that had more than the exempt amount of equity in it, but your properly setup retirement accounts are safe and your income could not be garnished in South Carolina like it could be in in other states. So, if you can ride out the judgment for 10 years, you will be in good shape. Unfortunately, your credit might not be good for that period of time.
Question: How do I deal with a judgment outside of bankruptcy?
Answer: In addition to waiting it out, you could try to settle the judgment. We will take a look at your situation and see what the creditor would get if you were to file a Chapter 7 (known as a hypothetical liquidation analysis) or Chapter 13 bankruptcy. We would then make a settlement offer so that we offer a little more than the creditor would receive in a Chapter 7 or something less than the creditor would receive in a Chapter 13 (but the creditor would receive the money sooner than it would in a Chapter 13). We call this a workout and it can be an effective way to resolve the judgment.
F.A.Q.'s on Business Bankruptcy
QUESTION: Will I be able to keep my business?
ANSWER: This will depend on numerous factors, of course, but the primary factors are: a.) Are you able to maintain what we call the must pay expenses: the expenses needed to keep the business operational including utilities, rent, payroll? b.) Are you able to create some income above the normal expenses in an amount that would be sufficient for us to make some reasonable proposal to your creditors? If the answer to both these questions is yes, then I think there is a good likelihood you will be able to keep your business although there is no absolute guarantee of that.
QUESTION: Will a business failure or will the filing of bankruptcy by the business have an effect on me?
ANSWER: Probably, particularly if you personally guaranteed the debt.
QUESTION: If I personally guarantee the debt, will the filing of bankruptcy by my business protect me?
ANSWER: Probably not. You will need to deal with your creditors and the creditors you have guaranteed in some other way such as filing personal bankruptcy. That is not to say that a bankruptcy by the company or an attempt to work out the debt of the company should not include some protection for the individual but that is a difficult way to proceed.