Frequently Asked Debt Questions

Are you licensed in my state?

Unidos Por La Libertad, Org. dba Business and Debt Counseling Services is a California based nonprofit organization which is tax exempt under R&TC Section 23701d and IRS 501 (c) 3 tax code, the organization is compliant with exemption from Licensure by the California Commissioner of Corporations. The agency is registered with the California Attorney as a Credit Service Organization and Approved by the Executive Office of the US Trustee to issue certificates in compliance with the Bankruptcy Code. Approval does not endorse or assure the quality of an Agency’s services.

There is legislation in a minority of states which places restrictions and requirements on any form of debt management. While the federal government in many ways regulates debt settlement in addition to state governments, it's important that you as the consumer follow up with any firm you work with to find out if they are able to legally provide services in your state.

What is the cost of your counseling and budget consultation?

Our initial counseling session and budget consultation is offered at no charge. Our counselors will provide you with a free analysis to help assess your financial situation and determine your best options. However, it may take more than one consultation to determine the best solutions for your individual situation. Counselors will explore alternative options to entering a debt management plan or filing bankruptcy prior to recommending either. Additional, sessions for credit counseling client's that are not enrolled in a bankruptcy counseling or debtor education program are subject to an administrative service fee based on a sliding income scale. Fees range from $0 to $50 per hour dependent on income. Debt Management Fees range from $0 to $35 per month dependent on income. If you believe that you are eligible for a reduced or waive fees contact us at 1.323-331-7531 or download a fee waiver application here on our website and fax the completed application with the appropriate documentation to 888.908.7396. A counselor will contact you to schedule an appointment or provide you with an access code within one business day.

The agency is committed to the benefit of the community; therefore, the organization will provide services to all consumers in need regardless of their ability to pay.

Do you loan money?

No. We are not a lending institution.

How can you help me?

The agency offers a wide range of consumer education workshop programs which include: home pre- and post-purchasing, repair and maintenance, foreclosure avoidance, predatory lending, financial and money management strategies, understanding credit, fair housing, and budgeting.

The agency also offers housing, credit and debt management counseling which include: loss mitigation and debt management plans.

As part of our debt management plan service, we work with creditors on your behalf to establish an affordable new payment arrangement, which may include benefits such as: a reduced interest rate, stopping late or over limit fees, allowing you to pay off your debt more quickly. We collect one monthly payment from you and disburse your payments to your respective creditors. Creditors may elect to make a fair-share contribution back to the organization. However, you will still receive recognition for 100% of your agreed payment.

Tell me more about your counseling programs?

Financial Management/Budget One-On-One Counseling for Homeowners - this activity meets the financial analysis requirement for all housing counseling agency's to review the client's personal financial position in respect to their income, expenses, spending habits and use of credit as they aligned with the home value. During the counsleing session our skilled housing counselor assist client's to establish a realistic budget for the client and determine a payment amount or mortgage payment which the client can safely afford. (Utilized both in loan modification process and pre-purchase counseling)

Pre-purchase One-On-One Counseling - this session assists borrowers in determining their preparedness to purchase a home - as part of its educational component the counselor will assist the potential homeowner in preparing an action plan for homeownership. This program is designed for first time homebuyers. It includes financial management, budget and home maintenance counseling.

Fair Housing One-On-One Counseling - this individual counseling activity is designed to assist clients of their their homeowner or tenant rights and responsibilities as a housing occupant.

Home Improvement & Rehabilitation One-On-One Counseling - these sessions assist clients in determining and identifying the benefit of energy efficiency, increased asset value from home improvements and available financing options

Reverse Mortgage One-On-One Counseling - this session provides educational counseling and implementation of a mortgage product that pays homeowners, loan proceeds drawn from accumulated home equity and that requires no repayment until a future time.

Loan Conversions/ Loss Mitigation - this program offers mortgage default and/or foreclosure intervention counseling, specifically relating to the current industry practices of loss mitigation to include: loan repayment, forbearance, modification, refinance, loan assumption, short sale, deed-in-lieu, community referrals, and other remedies available to the homeowners to avoid foreclosure.

Pre- foreclosure Counseling - Resolving or Preventing Mortgage Delinquency or Default by exploring impact on credit and implementing loss mitigation and budgeting.

Rapid Re-Housing Services - Household must be homeless as per HUD definition: (1) Sleeping in Emergency Shelter, Sleeping in a place not meant for human habitation, Staying in hospital or institution for up to 180 days, but literally homeless immediately prior to entry, Graduating or timing-out of transitional housing, Victim of domestic violence. (2) Shelter's and agency referrals must be made on letterhead and sent to Rapid Re-housing Case Manager along with HPRP assessment form:

• Identify shelter program
• Statement verifying current shelter occupancy of HPRP participant including most recent entry and exit dates
• Signed and dated by provider
• Includes ongoing case management and follow-up

Rental One-On-One Counseling - this program offers individual counseling activities designed to assist clients in Locating, Securing, or Maintaining Residence in Rental Housing.

HOM- Services for Homeless One-On-One Counseling - this service provides individual counseling which includes providing clients with referrals or information regarding emergency shelter; other emergency services; and transitional housing.

Homeless Assistance Services - Unidos Por La Libertad, Org. dba Business & Debt Counseling Services collaborates with and maintains a referral network of community based providers which offer local shelters, emergency and transitional housing services. The organization also maintains a TBC directory for other emergency services (medical care and motel vouchers, bus passes and tokens, general relief and legal aide). The non-profit assists homeless persons and families in the application process, locating available placement, identifying contacts and provides coordination during housing placement.

What is the cost of the Debt Management Program? There is a one-time fee of $35 for enrollment. There is also a monthly maintenance fee of $35. Fees may be waived or discounted depending on your income, state's regulations, or if you are a full-time student, veteran, active military or senior citizen (age 62 or older). Call 1-323-331-7531 to learning more or download a fee waiver application here and fax the completed application with the appropriate documentation to 888.908.7396. A counselor will contact you to schedule an appointment or provide you with an access code within one business day.

What happens to my total monthly payment when one of my accounts is paid off?

Your total monthly payment will not change throughout the term of the program. When one account is paid off, the creditor funds plus the maintenance fee will be reallocated to another account that is most beneficial for you, generally to the account with the highest interest rate. The Amortization Schedule showing your estimated program completion date located on the last page of your budget to assist you in monitoring your progress. These assumptions will change if you miss a payments during the program or all proposed terms are not accepted in a timely manner by your creditors.

Can I still use my credit cards once I'm enrolled in the program?

No. In order to reduce debt, receive relief and regain financial stability, you must stop incurring new debt. All accounts entered in the Debt Management Program will be closed.

Do I need to cancel credit card insurance?

Yes. Without first having the client cancel credit card insurance, most creditors will not accept a Debt Management Proposal.

Do I need to cancel promotional plans?

Yes. To avoid delay in proposal acceptance of your Debt Management Plan, promotional plans need to be cancelled.

Will my creditors still send me statements?

Yes. You will receive monthly statements from your creditors, as usual, reflecting the Debt Management Program payments made each month. It is important for you to login into your BDC customer account, cross reference and review your statements to make sure that you receive accurate allowances from your creditors. Contact us immediately, if you notice a discrepancies or problems. It is your responsibility to monitor reports from your creditors, if you stop receiving statements and your creditor refuses to send them, contact them directly to monitor the status of your account. We are not responsible for issues or errors that are not reported in a timely manner. It is your responsibility to become familiar with and stay abreast of when payments are posted, effective program interest rate, make timely payments to avoid unnecessary fees, and/or any past due amounts. Your involvement is an essential part of fiscal responsibility and implementing the personal finance tools which will help you overcome financial difficulty and regain financial health.

Can I make payments on my own, once I join the program?

No. It is recommended, once a payment plan agreement has been established with a creditor all payments should be made through the Debt Management Program. Payments made directly to the creditors could be viewed as a termination from our program by the creditor and may result in an increase in the interest rate. If you want to send additional funds, please contact the Disbursement Department at 323-331-7531. No additional fees will apply for making payment above the agreed amount.

How will your program affect my credit or credit score?

When entering into a Debt Management Program, it is advisable to close all open lines of unsecured credit, to avoid incurring new debt while trying to resolve your current financial deficiency or delinquent debt. Initially, decreasing your available credit levels may cause a drop in your credit score. However, expect your credit score to improve during the term of the debt management program if you comply with the rules of the program, do not incur new debt, and make payments on-time. The combination of making payments on-time and a reducing your total debt will result in a positive overall impact on your score. Some creditors will report, or continue to report, an account in a debt management plan as delinquent, until the balance is paid-in-full. This could have a negative impact on your credit. While you are in the program, some creditors may contact the credit bureaus and place a notation on your report indicating that you're going through credit counseling. This is a neutral notation that does not affect your credit score, which is what most lenders use to determine creditworthiness. The way this notation is viewed by individual creditors varies. Some creditors may view the "CC" notation as a negative, when making a decision to extend new credit; however, you are strongly advised against opening any new lines of credit while participating in the program, or initiating hard inquiries on your credit profile as that would contradict your ultimate goal of regaining stability and becoming debt-free. The CC notation is usually removed by the creditors when you complete or terminate the program and, if it is not, you may contact the credit bureaus to have the inaccurate information removed. We recommend that you review your credit report approximately 60 days after completion/ termination of the program, to ensure that all information is being accurately reported.

Is my information kept confidential?

Yes. Our privacy policy pledges that client information will be strictly safeguarded and stored in a safe manner at our office. We maintain physical, electronic and procedural safeguards that comply with federal regulations to guard your nonpublic personal information and will not disclose information to anyone except those persons authorized by you.

What credentials do you have?

BDC is seeking accreditation by the Council on Accreditation for membership in the Association of Independent Consumer Credit Counseling Agencies (AICCCA) and the National Foundation for Credit Counseling (NFCC). As an accredited member, we are required to become certified through an independent third party audit of compliance with the standards of ISO 9001:2008 (International Standard Organization) and a Code of Practice specific to the credit counseling industry. This guarantees the highest standards of fiscal integrity, quality service delivery, and client database security.

What is your rating with the Better Business Bureau?

Based on BBB files, Unidos Por La Libertad, Org. dba Business and Debt Counseling is an accredited member of the Better Business Bureau with a A+ rating, seeking participation in the Charity Seals program. Refer to

The Better Business Bureau reports on businesses through what is called a Reliability Report. Consumers can refer to the BBB's website under Charitable organizations and view a Reliability Report which gives business contact information, information on products and services as well as the status of the BBB rating, customer experience compliment information, company management, complaints and resolution practices.

How is BDC funded?

Unidos Por La Libertad, Org. dba Business and Debt Counseling Services (BDC) receives financial support through our consumer education programs, voluntary Fair Share Contributions from creditors who participate in our Debt Management Program, Private Endowments, Foundations and Government Grant contributions. However, we work with all creditors who are willing to accept our payments and offer benefits to our clients, regardless of whether or not the creditor provides financial support to BDC.

Is this program similar to Bankruptcy?

No. Bankruptcy is a negative remark that stays on a consumer's credit report for 7-10 years and negatively affects creditworthiness, whereas a neutral Credit Counseling notation is removed once someone completes the program. Through a Debt Management Plan, many creditors will report your account as current once your proposal is accepted and there is a consistent payment history, thus improving your credit ratin

How do I add an account to the program?

All unsecured accounts should be included in the program in order for you to receive the full benefits of the program. To add an account to the program, you must fax, mail or email your requests, including your Client ID number, along with the most recent statement with the full account number and name of account owner. If the account is determined to be eligible for the program, we will send you a revised budget with your new monthly payment and effective date.

How do I know if a creditor accepts the Debt Management Proposal?

Many creditors will send a letter informing you of the acceptance of a debt management proposal. Another way is to check your credit card statements, check the status of your accounts on our website by clicking on "Client Login" or by calling Client Services at 323-331-7531. Lower interest rates and suspension of late fees indicate the creditors' acceptance of the debt management proposal.
What happens if one of my credit cards is sold or transferred to another credit card company?

If a creditor sells your account to another company, they must notify you in writing. Should you receive notification of this, you must contact our Client Services Department immediately. Client Services will then make the necessary changes to ensure that the new creditor is informed of your participation in our Debt Management Program and that your payment is being sent to the correct place.
What is your dispute resolution process?

BDC strives to be fair, equitable, and consistent in the implementation of all program policies, procedures and actions.

1. Any client wishing to express a concern or dispute program policies, procedures, or actions may do so in accordance to the following steps:

a. Approach staff immediately involved in the situation and attempt to reach resolution or submit a written dispute to Unidos Por La Libertad, Org. dba Business and Debt Counseling Services at 599 S. Barranca Ave. Suite L103, Covina, CA 91723.
b. We pride ourselves on delivering superior customer oriented services; our personnel are trained to respond immediately to any customer concern or issue. If the staff representative is unable to resolve the issue to your satisfaction, they will straightaway request the assistance of their immediate supervisor during the initial presentation of a concern.
c. The supervisor will speak with the consumer to discuss their issue or concern and gain a clear understanding of the circumstances involved, the supervisors objective will be to if at all possible resolve the issue at that point, if resolution does not occur the supervisor representative will conduct further investigation and respond to the complaining party in writing within five work days.
d. If the consumer is not satisfied with the response he/she may re-submit the Complaint Report, including the response of the supervisor to the Program Director.
e. If your request could not be accommodated due to an organizational policy or compliance conflict with regulatory requirements (under these circumstances we would request a determination from the monitoring entity) otherwise the complaint will immediately be referred to a committee comprised of upper level management for investigation.
f. The Committee will review the complaint, along with the Supervisor’s response, and the Program Director will respond in writing within 10 work days.
g. If the consumer is not satisfied with the response he/she may re-submit the Complaint Report, including the response of the Supervisor’s and Program Director’s response to the Board of Directors.
h. The Board of Director will review the complaint, along with the Supervisor’s and Program Director’s response, and the Program Director will respond in writing within 15 work days.
i. If the consumer is not satisfied with the response, the Board of Directors will request a third party mediator to assist in resolution of the dispute with the consumer.
2. A consumer that has exhausted their available avenues within our organization’s dispute resolution process has the right to contact State or Federal Regulatory agencies.

How do I complain about a credit counseling organization?

Unidos Por La Libertad. Org. dba Business Debt Counseling has posted a $100,000 surety bond with the California Secretary of State as a Credit Services Organization in accordance with California Civil Code 1789.10-1789.26. This bond has been posted by PHILADELPHIA INDEMNITY INSURANCE COMPANY, 231 St. Asaph’s Rd., Suite 100, Bala Cynwyd, PA 19004-0950. Pursuant to the "Credit Services Act of 1984", California Civil Code 1789.10-1789.26 any person claiming against the bond for a violation of this title may maintain an action at law against the credit services organization and against the surety. The surety shall be liable only for actual damages and not the punitive damages permitted under Section 1789.21. The aggregate liability of the surety to all persons damaged by a credit services organization's violation of this title shall in no event exceed the amount of the bond which is maintained for two years following the date on which the credit services organization ceases to conduct business in this state.

The Corporation’s Agent for Service of Process is Ricardo Montes, 599 S. Barranca Ave. Suite L103, Covina, CA 91723.

If the credit counseling organization is providing DMP or DSP services in California, you can contact the Department to file a complaint at 1-866-ASK-CORP (1-866-275-2677).
If you are using a credit counseling organization in connection with a bankruptcy program, you should contact the U.S. Trustee Program and the Federal Trade Commission

What is your cancel policy?

You, the consumer, may cancel this contract at any time prior to midnight of the fifth day after the date of the transaction. See the attached notice of cancellation form for an explanation of this right or within written notice.
“Notice of Cancellation” - You may cancel this contract, without any penalty or obligation, within five days from the date the contract is signed. "If you cancel, any payment made by you under this contract must be returned within 15 days following receipt by the seller of your cancellation notice. To cancel this contract, mail or deliver a signed and dated copy of this cancellation notice, or any other written notice, to Business and Debt Counseling Services at 599 S. Barranca Ave. Suite L103, Covina, CA 91723 not later than midnight of the five days from the date the contract is signed.
A copy of the fully completed contract and all other documents the credit services organization requires the buyer to sign shall be given to the buyer at the time they are signed.
“You have a right to cancel the contract for any reason within five working days from the date you signed it. If for any reason you do cancel the contract during this time, you do not owe any money. You have the right to sue a credit services organization if it misleads you.”

What provisions have been made to protect consumers?

Any credit repair organization or credit service organization shall provide any consumer with the following written statement of before any contract or agreement between the consumer and the credit repair organization is executed. “CONSUMER CREDIT FILE RIGHTS UNDER STATE AND FEDERAL LAW”:
You have a right to obtain a copy of your credit file from a consumer reporting agency. You may be charged a reasonable fee not exceeding eight dollars ($8). There is no fee, however, if you have been turned down for credit, employment, insurance, or a rental dwelling because of information in your credit report within the preceding 60 days. The consumer credit reporting agency must provide someone to help you interpret the information in your credit file. You have a right to dispute inaccurate information by contacting the consumer credit reporting agency directly. However, neither you nor any credit repair company or credit service organization has the right to have accurate, current, and verifiable information removed from your credit report. Under the Federal Credit Reporting Act, the consumer credit reporting agency must remove accurate, negative information from your report only if it is over seven years old. Bankruptcy information can be reported for 10 years.
If you have notified a credit reporting agency in writing that you dispute the accuracy of information in your credit file, the consumer credit reporting agency must then reinvestigate and modify or remove inaccurate information. The consumer credit reporting agency may not charge a fee for this service. Any pertinent information and copies of all documents you have concerning an error should be given to the consumer credit reporting agency.
If reinvestigation does not resolve the dispute to your satisfaction, you may send a brief statement to the consumer credit reporting agency to keep on file, explaining why you think the record is inaccurate. The consumer credit reporting agency must include your statement about disputed information in any report it issues about you.
The retrieval of my/our credit report(s) will create an inquiry notation and will remain on my/our credit report(s) for two years.

What if a creditor doesn't agree to participate?

Unfortunately it is the decision of a creditor whether or not to accept a debt management proposal. If the creditor will not accept a proposal, they may accept the full standard monthly payment through our program, but offer no benefits. If a creditor refuses to accept your payments through a debt management company, then that individual account must be removed. You will then need to send your regular monthly payments directly to the creditor.

How will a creditor know I joined the Debt Management Program?

We will send debt management proposals to your creditors, just prior to sending your first payment. The proposal -stands as official notification to your creditors that you have sought the assistance of BDC.

What happens if I cannot handle my payments while in your program? Can someone help me lower my payments?

In order to assess your current financial situation and determine the best course of action, please contact our Re-counseling Department at 323-331-7531
Why am I being charged late fees and/or over limit fees?

There could be several reasons why a creditor is still charging fees. If you see a fee on your current credit card statement, please contact our Client Services Department at 323-331-7531, so that the issue can be addressed with your creditor.

Did you receive my payment?

You can access all of your payment information online via our website at
To whom do I make my cashier's check payable to and what address do I send it to?

Please make your cashier's check payable to Business & Debt Counseling Services and send to 599 S. Barranca Ave. Suite L103, Covina, CA 91723. Include your Client Number or Social Security number. Fees also may be paid via debit card, Internet ACH authorization, paper ACH authorization form, or money order.

What does it mean to make a difference payment to the creditor? How do I do this?

Making the difference payment to a creditor helps to keep your account current. The difference payment to a creditor is to ensure that the creditor is receiving their full payment so you do not fall behind. If a creditor requires a minimum payment of $50, but Business & Debt Counseling Services is proposing $20.00, it is important that you, the client, pay the difference of $30.00 directly to the creditor, while we send $20.00 so in total the creditor is still receiving full payment. It is important that you, the client, continue to make these difference payments until you have received notification that the creditor has accepted the account on the program.

Can a debt settlement company provide legal advice?

No, debt settlement companies are not law firms and cannot provide legal advice.
Tell more about your Bankruptcy Counseling and Education Program?

BDC is approved by the Executive Office of the US Trustee Program to issue certificates for credit counseling in compliance with the Bankruptcy Code. Approval does not endorse or assure the quality of an Agency's services.

BDC will only refer clients for administration of a debt management plan (“DMP”) to an agency that is: A UST- approved agency or an agency covered by an approved UST bond AND as agreed, in writing, to permit the UST to audit, as necessary. If you are dissatisfied with the service provided by our agency you can utilize the Complaint Resolution Process.

What is your Privacy Policy?

Our agency is committed to assuring the privacy of individuals and/or families who have contacted us for assistance. We realize that the concerns you bring to us are highly personal in nature. We assure you that all information shared both orally and in writing will be managed within legal and ethical considerations. The following are examples of how this data may be used:

All Clients

To assist us in our work with your, our staff may seek supervision/consultation with professional colleagues within the agency.
This information will not be viewed or used by anyone other than Unidos Por La Libertad, Org dba Business and Debt Counseling. If you decide to file bankruptcy, this information will not become part of your case.
For the purpose of evaluating our services, gathering valuable research information and designing future programs, we may use aggregated case file information. Your anonymity will be maintained through the use of your client number or by using aggregate data in all circumstances.

Frequently Asked Bankruptcy Questions

As of 2005, a certificate of credit counseling completion is required before an individual can file for bankruptcy in the United States. Only credit counseling organizations that have been approved by the U.S. Trustee Program can issue the required certificates. Approval does not endorse or assure the quality of an Agency’s services. Filing for bankruptcy could have a negative effect on your consumer credit report. If you are extremely delinquent in payment of your bills, it may be less damaging than a history of unpaid accounts. Under the Federal Credit Reporting Act, the consumer credit reporting agency must remove accurate, negative information from your report only if it is over seven years old. Bankruptcy information can be reported for 10 years. Under some circumstances, after bankruptcy eliminates your old debts, you may find yourself in a better position to stay on time with your current bills, and restore your credit to gain new credit accounts. You also may be able to keep the credit card you had prior to bankruptcy, if the creditor grants approval. Another option would be to get a secured credit card backed by your own bank account. The best way to rebuild your credit is to obtain new credit and make the payments on time. The effects of bankruptcy are determined by each individual‘s circumstances and type of debt. During your required pre-bankruptcy counseling session, your certified credit counselor will assist you in taking a financial inventory and exploring all available options such as entering into a debt management plan, self-help negotiation strategies to establish a repayment plan with your credits, budgeting tools or bankruptcy as a viable option. After filing your required pre-discharge education course will assist you in refining personal finance management skills and budgeting tools to maintain your financial health.

Before You File Personal Bankruptcy: Information about Credit Counseling and Debtor Education

Business and Debt Credit Services does not offer legal advice. If you are considering filing bankruptcy you should seek the advice of licensed bankruptcy attorney.

What is a chapter 7 bankruptcy and what happens when I file a chapter 7 bankruptcy?

Under the federal chapter 7 bankruptcy statute, a "means test" is conduct to determine if you have a sufficient amount to pay creditors. If it is found that there is not sufficient income, the debtor is allowed a discharge or release from personal liability for certain specified types of debts; this means that the debtor is no longer required by law to pay any debts that are discharged. The discharge acts as a permanent order directed to creditors to refrain from taking any form of collection action, including legal action and communications such as telephone calls, letters, and personal contacts with the debtor. Although, personal liability has been released for all discharged debts, those debts that have a valid lien or secured debt (i.e., security interest granted over an item of property to secure the payment of a debt) that have not been made unenforceable (i.e., avoided) as part of the bankruptcy case will remain enforce. Therefore, a secured creditor may enforce the lien to recover the subject property of the lien.

Why do people file a chapter 7 bankruptcy?

People who have large amounts of unsecured debt such as medical expenses or credit card debt and are no longer able to pay due to unexpected medical, expenses unemployment, or divorce; generally file chapter 7 bankruptcy to seek protection from creditors.

What is chapter 13 bankruptcy?

In contrast to Chapter 7 Bankruptcy, Chapter 13 will allow you to keep valuable property, like your home or car, even if you are behind on payments or you have equity not covered by your exemptions. Payments on these secured debts are generally regular monthly payments plus some extra amount if you need to get caught up because you are behind when you file. In a chapter 13 case, the debtor is filing for an opportunity to restructure their debt or file a plan showing how you will pay off some of your past-due and current debts over a period of three to five years. In a chapter 13, if your property is not fully exempt you will be required to establish a repayment plan to pay at least the equivalent of the non-exempt equity and any amount you are behind on your home or car loan over the course of the three to five repayment plan which will require you to continue making the regular monthly payments. If your property’s equity is fully exempt, you will not lose your home or car during your bankruptcy case.
Why do people file a chapter 13 bankruptcy?

People, who are behind on secured loan payments, generally file chapter 13, if they have valuable property not covered by an exemption, like a home or car, but want to keep this property. In chapter 13 bankruptcy, a debtor may be allowed to make up these past due payments over time while keeping the home or car.
How often can I file bankruptcy?

Under Chapter 7 bankruptcy, you can file again after six years has passed from the date of your last filing. In contrast, Chapter 13 bankruptcy can be filed at any time.
What property can I keep after I file bankruptcy?

In a chapter 7 case, you may keep property which is exempt from the claims of creditors. Other factors considered are the market value of the property, which means: “what the property is worth now not the amount you paid for it”. Normally the trustee is interested in the garage sale or resale value of your property for most personal effects. Other factors include your equity in the property. This means that your exemption is calculated against and based on the full value minus any money that you owe on mortgages or liens against the property. For example, if you own a house valued at $150,000 with remaining mortgage of $40,000, your equity in the home is $110,000; your exemptions is count against the equity amount. While exemptions allow you to keep property even in a chapter 7 case, if you are behind on the debt your exemptions do not make any exception to the right of a mortgage holder or car loan creditor to recover the property as part of repayment. If you are behind in payments and have the means to pay the loan payment plus some amount above that payment to caught the payments that you are behind over a period of three to five years you should consider a chapter 13 bankruptcy. Under chapter 13, you can keep all of your property if your repayment plan meets the requirements of the bankruptcy law. However, in most cases you may have to pay the mortgages or liens as if you didn't file bankruptcy.
What debt will bankruptcy not erase?

Debts not listed on your bankruptcy petition;
Money owed for alimony or child support, fines, and some taxes;
Debts resulting from "willful and malicious" harm or loans you got by knowingly giving false information to a creditor, who reasonably relied on it in making you the loan;
Student loans owed to a government body or school, with the exception, if the court decides that payment would be an undue hardship;
Mortgages and other liens which are not paid in the bankruptcy case (but bankruptcy will wipe out your obligation to pay any additional money if the property is sold by the creditor).

Will I have to go to court?

In most bankruptcy cases, approximately 30 or 40 days after filing bankruptcy you will go to meet with the bankruptcy trustee who has been appointed by the United States Trustee to oversee your case; however the trustee is not a judge. This proceeding is called the "341 or creditors meeting" because any creditor who chooses to come may attend the meeting. This meeting is simple procedure where you are asked questions about your bankruptcy forms and your financial situation. However, may have received notice of the date and time to appear before a judge from the court or your attorney, if you have one.
What is the effect of bankruptcy on co-signers or my spouse?

As defined in the loan agreement, if you are unable to pay off the obligation the co-signer must still pay the debt. If you file for bankruptcy, the co-signer will have a contingent claim against you and should be listed as a creditor in your bankruptcy petition.

If you file bankruptcy as a single filer, your spouse will still be liable for any joint debts and your discharged debt may show on your spouse’s credit report. Filing together doubles your exemptions. However, in cases it might be advisable to have only one spouse, if only one spouse has debts or if one spouse has debts that are not dischargeable then.

Can I be discriminated against for filing bankruptcy?

Under the federal bankruptcy statute, the law expressly prohibitions discriminatory treatment of debtors by both governmental units and private employers, solely because the person was a debtor or insolvent before or during the case, or has not paid a debt that was discharged in the case. The law prohibits the following forms of governmental discrimination: terminating an employee; discriminating with respect to hiring; or denying, revoking, suspending, or declining to renew a license, franchise, or similar privilege. A private employer may not discriminate with respect to employment if the discrimination is based solely upon the bankruptcy filing.

Can I erase my student loans by filing bankruptcy?

Generally, student loans are not discharged in bankruptcy. In 11 U.S.C. sec. 523(a) (8) there are two exceptions to this general rule:

1. The student loan may be discharged if it is neither "insured or guaranteed by a governmental unit" nor "made under any program funded in whole or in part by a governmental unit or nonprofit institution."
2. The student loan may be discharged if paying the loan will "impose an undue hardship on the debtor and the debtor's dependents."

It is usually difficult to have student loans erased under the undue hardship standard. Whether an exception applies under this law depends on the facts of the particular case and may also depend on local court decisions. Even if a student loan falls into one of the two exceptions, discharge of the loan may not be automatic. You may have to file an adversary proceeding in the bankruptcy court to obtain a court order declaring the debt discharged.

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