Bankruptcy

It's not for everyone

There are many alternatives to bankruptcy and they should be explored before making your decision. This is why at Marc R. Tow & Associates we make sure to educate our clients before moving forward with their case.

Business Solutions

Turn your business around

Filing for bankruptcy is not the appropriate business decision for every financially troubled entity. Marc R. Tow & Associates has decades of experience providing comprehensive solutions to resolving business insolvency.

Debt Settlement

A simple process

We offer a program wherein we negotiate with your creditors/CA in order to settle the debt for less than what you owe. We charge an upfront fee that can be paid through a payment plan if you wish.

Personal Chapter 7 Bankruptcy

Technically, the word “bankrupt” is not the correct terminology when referring to getting rid of debts, but most people use that phrase. “I want to bankrupt my credit cards or bankrupt my student loan debts”. The correct legal term is “discharge”. You discharge your obligation to pay on debts. Throughout this webpage, that is the term that will be used to describe getting rid of (bankrupting) debts in bankruptcy.

Certain Debts are Non-Dischargable in Chapter 7 and Chapter 13

Examples of these are alimony and child support obligations, taxes less than three (3) years old, student loans (with the sole exception listed below), and any debts procured by fraud, incurring debt without a reasonably certain ability to repay the debt, and so forth. Certain debts related to a divorce proceeding, such as attorneys fees, MAY be dischargeable in a Chapter 13, but not in a Chapter 7.

Assuming you need to file a bankruptcy, the only way to determine which Chapter to file under is to first compare your options under the other available Chapters (with the assistance of a bankruptcy attorney). Generally, Chapter 7 is the cheapest, quickest and least burdensome of the three major Chapters (the others being 11 and 13) of bankruptcy law. Costs and fees vary depending on the number of creditors you have, complexity of your case, and other factors. Before starting your Bankruptcy we need to evaluate your case. All of our consultations are free. Contact us now!

If you are an individual, and meet the requirements, Chapter 7 allows you to discharge most or all of your debts. It allows you to do this regardless of how many assets you have or how much your creditors ultimately receive. It basically allows you to walk away from your debts and start over.

What are Some of the Disadvantages?

You are only able to receive a discharge after eight (8) years have passed since the commencement of the last case in which you received a discharge, although you can file another Chapter 13 case sooner (usually 4 years). Thus, you should not file a bankruptcy if you need the option of doing it again in the next eight years.

Payments made to or on behalf of any relatives within twelve (12) months prior to filing your bankruptcy case are recoverable by the Trustee in your case. That’s right. If you repaid money during that period to your brother, or made payments on a credit card that your mother let you use, they will have to pay back that money to your Trustee who will then distribute it equally to all your creditors. This is one of the biggest mistakes people make, often innocently because they don’t know they will be filing a bankruptcy, but that’s the law. It’s designed to prevent debtors from preferring one creditor over another. The same is true for non-relatives, although the look back period for them (such as credit cards, etc.) is only ninety (90) days and most people don’t really care if their Trustee sues the credit card company to recover the money.

What About Your Credit?

The bankruptcy will appear on your credit report for up to ten (10) years after you file. Other accurate negative reports on your credit must be removed after seven (7) years (like late payments on credit cards, foreclosures, etc). However, according to my former clients, this is usually not as big a problem as most people think. Credit lending agencies know you won’t be able to file another bankruptcy for at least 6 years, and therefore, they don’t have that risk to bear. You will not get as high a credit limit as you once had, or be able to borrow a large sum of money, but getting some credit (such as a secured credit card) shouldn’t be that difficult and you can rebuild your credit over time. What you will likely face is higher interest rates, required higher down payments, more points, etc. Some people do have difficulty rebuilding their credit, but it is usually due to other factors besides bankruptcy, such as their employment record, other credit problems, etc. In any event, I can provide you with excellent materials for helping you rebuild your credit should you so desire. Before starting your Bankruptcy we need to evaluate your case. All of our consultations are free. Contact us now!

A Word About Credit Cards and Cash Advances

It usually takes 2-4 years to complete a credit card settlement program or settle personal loans, medical bills and other dues. The period of completion depends upon your total debt amount. Before starting your debt settlement we need to evaluate your case. All of our consultations are free. Contact us now!

Creditors May Not Sue After Settlement

Any debt aggregating more than $550.00 from any single creditor for non-essential, “luxury” goods, or cash advances totaling over $825.00 on a credit card, incurred or taken within 90 days prior to filing the bankruptcy, are presumed to be non-dischargeable. The obvious reason for this is to discourage would-be debtors from “running up” their credit charges, then filing bankruptcy. To be safe, do not use your credit cards for anything other than food, clothing and other essentials during this two month period (actually, it’s best not to use them at all). It may also be considered grounds for objecting to your discharge if you have taken cash advances on one credit card to pay the minimum balances on the others, or if you transfer balances from one card to another shortly before filing bankruptcy. You should consult with Marc R. Tow & Associates about your personal situation. This particular provision is just a presumption of non-dischargeability. It does not mean that if you wait more than 90 days you are magically free from non-dischargeability issues; nor does it mean that if you file the bankruptcy within the 90 days that you won’t be able to discharge that debt. What it basically does is shift the burden of proving that the debt should or shouldn’t be discharged onto the debtor during that 90 day period (rather than on the creditor where it would otherwise be). Before starting your Bankruptcy we need to evaluate your case. All of our consultations are free. Contact us now!

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