James H MaGee
Attorney at Law
We emphasize helping you through bankruptcy
What are the different "chapters"
of bankruptcy law?
Chapter 7 is the most common form of filing, often called a "straight bankruptcy". With many technical exceptions beyond those listed here, all Debts are discharged in Chapter 7 bankruptcy EXCEPT the following:
• Child Support
• Student Loans
• Most Traffic Tickets and Criminal Fines
• Most Taxes
• Injuries Caused by Drunk Drivers
Chapter 7 cases can potentially discharge debts for:
• Lawsuits for injuries caused while driving uninsured
• Credit Card Debts
• Debts following evictions and/or repossessions
• Lawsuits for breach of contract
• Small or moderate NSF checks
• Garnishments
• Most business debts
• Some fraud debts
Chapter 13 involves making payments over time to creditors. The payment plans can be as short as a few months, or as long as five years. Generally, Chapter 13 is best to avoid, if possible, by opting to file a Chapter 7. However some people have problems that cannot be taken care of with a Chapter 7.
The following debts and problems can often be handled more advantageously in a Chapter 13:
• Taxes
• Fraud
• Embezzlement
• Moderate to large NSF Checks
• Child Support
• Criminal and Traffic Ticket Fines
• Reinstating a suspended driver's license
• House payments that are several months behind
• Car payments that are several months behind
• Injuries caused by your intentional conduct (such as assaulting someone)
• Unpaid alimony or spousal maintenance
• Reducing a car payment to an affordable level
• Reducing a furniture or household payment to an affordable level
Sometimes it is necessary or advantageous to file a Chapter 7 before a Chapter 13. These are called Chapter 20 cases. For example, if you have high credit card debt that you cannot possibly hope to repay, but also have a suspended license because of many unpaid tickets, it may be best to pursue a Chapter 20 plan, providing you can wait a few months to obtain your license.
Chapter 11 cases are increasing in rarity. If you have a secured debt of over $750,000.00 and unsecured debt of over $250,000.00, you may have to file a Chapter 11, unless you are willing to file a Chapter 7. The decision to file a Chapter 11 is indeed a technical decision. Chapter 11 cases are very expensive and infrequently recommended. Most attorneys will not even tackle Chapter 11 cases. Chapter 11 cases are reserved for the most aggressive and hardworking attorneys. Our office is willing to put forth the effort necessary to serve your Chapter 11 needs.
COSTS TO FILE BANKRUPTCY
Chapter 7: Responsible and professional legal representation can be had for as little as $750.00. Most wage earners pay $1,000.00, and those wage earners with higher incomes will generally pay up to $1,500.00. Business owners in Chapter 7 generally pay at least $1,500.00, and this fee can be higher depending upon the anticipated complexity of the case. Rarely does any business owner case exceed $4,000.00. Generally, in most routine wage earner cases we will start work on your case with the payment of a $200 non-refundable deposit. The remaining balance of the attorneys’ fee is due at your convenience, whenever you are ready to have us send your papers to the United States Federal Bankruptcy Court. Bankruptcy is an excellent investment. There exists no better long term investment than ridding your family of “negative equity” and expensive creditor payments. You will be happier, healthier and less stressed out after your bankruptcy case, because once again you will have hope for the future.
Chapter 13: Really, all attorneys pretty much charge the same thing for Chapter 13. The court’s “official” minimum fee charged by attorneys is $1,800.00. Most attorneys allow you to pay a $200 nonrefundable down payment and then an additional $400 when you sign your documents. Then, with most all attorneys, balance of the fees (e.g. the remaining $1,200) is taken in small monthly installments after your plan is filed, and the attorney receives this money in small payments made directly to the attorney by the bankruptcy court. Thus, to be absolutely clear, you generally never pay more than $600.00 up-front out of your personal pocket to the attorney in most Chapter 13 cases. There are some exceptions to our “$600.00 up front” rule here at our office. If your case if related to the operation or failure of your business, OR you are coming in to receive our services in the final three weeks before a foreclosure sale on your home or other property, you have what we call a “high maintenance” difficult case. We may ask that you pay more than $600.00 of your fees up front for such difficult and/or time pressured “high maintenance” cases. Failed business and last minute foreclosure cases are examples of the most common “high maintenance” type cases. We believe that charging more up front for a “high maintenance” case is fair. Think about it like a shipping cost to send a package: Last-minute priority and overnight delivery mail like Federal Express and DHL always costs more than a normal slow mail package. Also, shipping a large, complex, odd-shaped or fragile object by special delivery or special freight always costs more than a plain package that is not insured against breakage. For those difficult and/or last minute cases, the up front fee thus may increase slightly according to the risk and complexity of delivering the work product. With all attorneys, in complex Chapter 13 cases, there can be extra fees above $1,800.00 (but remember, you generally never pay more than $600.00 out of pocket to the attorney), but again, any extra fees are added into the “bankruptcy plan” and are disbursed to the attorney by the bankruptcy court trustee, such that you really don’t end up paying any extra money out of pocket. What happens is that payments made through the plan to credit cards and medical bills and other debts are reduced so that the attorney services of your attorney can be paid. Rarely does the total fee in a Chapter 13 case exceed $2,500.00 or $3,000.00, and very little of this is paid out of pocket by you. We find that few, if any, reputable attorneys in our business service area differ much from our Chapter 13 fee policy.
Chapter 11: Call for pricing. We are extremely competitive.
Bankruptcy is a prudent step towards rebuilding your financial future.
As an example,paying $1,000.00 in bankruptcy fees to be rid of $40,000.00 in credit card and medical bill debt is an immediate 4,000% “return on investment” really increasing your net worth by $40,000.00, because you erase this negative hit off of your balance sheet. No stock market, real estate or bond investment will ever provide an immediate 4,000% positive return on your investment. Bankruptcy is the US Government’s gift to you and your family that keeps on giving as you go on to build stability, comfort and happiness for you and those who depend upon you.
Would you accept a gift of $19,860.75 cash into your bank account from the U.S. Government? Why of course you would accept a $19,860.75 perfectly legal cash gift! Bankruptcy is just such a gift. By illustration, if you are struggling under total $500 monthly credit card and medical bill payments but then file for bankruptcy under the laws of the United States of America, you could thereafter begin to contribute that $500 monthly amount into your 401k, savings account or other investments. Bankruptcy would enable you to start saving $500 monthly (over $6,000.00 per year) towards retirement or other goals. With the addition of a very conservative compounding interest rate of just five percent (5.0%) per year you would have over $19,860.75 “cash in hand” after just three short years. We encourage you to accept the US Government’s $19,860.75 personal gift to you.
Chapter 7 is the most common form of filing, often called a "straight bankruptcy". With many technical exceptions beyond those listed here, all Debts are discharged in Chapter 7 bankruptcy EXCEPT the following:
• Child Support
• Student Loans
• Most Traffic Tickets and Criminal Fines
• Most Taxes
• Injuries Caused by Drunk Drivers
Chapter 7 cases can potentially discharge debts for:
• Lawsuits for injuries caused while driving uninsured
• Credit Card Debts
• Debts following evictions and/or repossessions
• Lawsuits for breach of contract
• Small or moderate NSF checks
• Garnishments
• Most business debts
• Some fraud debts
Chapter 13 involves making payments over time to creditors. The payment plans can be as short as a few months, or as long as five years. Generally, Chapter 13 is best to avoid, if possible, by opting to file a Chapter 7. However some people have problems that cannot be taken care of with a Chapter 7.
The following debts and problems can often be handled more advantageously in a Chapter 13:
• Taxes
• Fraud
• Embezzlement
• Moderate to large NSF Checks
• Child Support
• Criminal and Traffic Ticket Fines
• Reinstating a suspended driver's license
• House payments that are several months behind
• Car payments that are several months behind
• Injuries caused by your intentional conduct (such as assaulting someone)
• Unpaid alimony or spousal maintenance
• Reducing a car payment to an affordable level
• Reducing a furniture or household payment to an affordable level
Sometimes it is necessary or advantageous to file a Chapter 7 before a Chapter 13. These are called Chapter 20 cases. For example, if you have high credit card debt that you cannot possibly hope to repay, but also have a suspended license because of many unpaid tickets, it may be best to pursue a Chapter 20 plan, providing you can wait a few months to obtain your license.
Chapter 11 cases are increasing in rarity. If you have a secured debt of over $750,000.00 and unsecured debt of over $250,000.00, you may have to file a Chapter 11, unless you are willing to file a Chapter 7. The decision to file a Chapter 11 is indeed a technical decision. Chapter 11 cases are very expensive and infrequently recommended. Most attorneys will not even tackle Chapter 11 cases. Chapter 11 cases are reserved for the most aggressive and hardworking attorneys. Our office is willing to put forth the effort necessary to serve your Chapter 11 needs.
COSTS TO FILE BANKRUPTCY
Chapter 7: Responsible and professional legal representation can be had for as little as $750.00. Most wage earners pay $1,000.00, and those wage earners with higher incomes will generally pay up to $1,500.00. Business owners in Chapter 7 generally pay at least $1,500.00, and this fee can be higher depending upon the anticipated complexity of the case. Rarely does any business owner case exceed $4,000.00. Generally, in most routine wage earner cases we will start work on your case with the payment of a $200 non-refundable deposit. The remaining balance of the attorneys’ fee is due at your convenience, whenever you are ready to have us send your papers to the United States Federal Bankruptcy Court. Bankruptcy is an excellent investment. There exists no better long term investment than ridding your family of “negative equity” and expensive creditor payments. You will be happier, healthier and less stressed out after your bankruptcy case, because once again you will have hope for the future.
Chapter 13: Really, all attorneys pretty much charge the same thing for Chapter 13. The court’s “official” minimum fee charged by attorneys is $1,800.00. Most attorneys allow you to pay a $200 nonrefundable down payment and then an additional $400 when you sign your documents. Then, with most all attorneys, balance of the fees (e.g. the remaining $1,200) is taken in small monthly installments after your plan is filed, and the attorney receives this money in small payments made directly to the attorney by the bankruptcy court. Thus, to be absolutely clear, you generally never pay more than $600.00 up-front out of your personal pocket to the attorney in most Chapter 13 cases. There are some exceptions to our “$600.00 up front” rule here at our office. If your case if related to the operation or failure of your business, OR you are coming in to receive our services in the final three weeks before a foreclosure sale on your home or other property, you have what we call a “high maintenance” difficult case. We may ask that you pay more than $600.00 of your fees up front for such difficult and/or time pressured “high maintenance” cases. Failed business and last minute foreclosure cases are examples of the most common “high maintenance” type cases. We believe that charging more up front for a “high maintenance” case is fair. Think about it like a shipping cost to send a package: Last-minute priority and overnight delivery mail like Federal Express and DHL always costs more than a normal slow mail package. Also, shipping a large, complex, odd-shaped or fragile object by special delivery or special freight always costs more than a plain package that is not insured against breakage. For those difficult and/or last minute cases, the up front fee thus may increase slightly according to the risk and complexity of delivering the work product. With all attorneys, in complex Chapter 13 cases, there can be extra fees above $1,800.00 (but remember, you generally never pay more than $600.00 out of pocket to the attorney), but again, any extra fees are added into the “bankruptcy plan” and are disbursed to the attorney by the bankruptcy court trustee, such that you really don’t end up paying any extra money out of pocket. What happens is that payments made through the plan to credit cards and medical bills and other debts are reduced so that the attorney services of your attorney can be paid. Rarely does the total fee in a Chapter 13 case exceed $2,500.00 or $3,000.00, and very little of this is paid out of pocket by you. We find that few, if any, reputable attorneys in our business service area differ much from our Chapter 13 fee policy.
Chapter 11: Call for pricing. We are extremely competitive.
Bankruptcy is a prudent step towards rebuilding your financial future.
As an example,paying $1,000.00 in bankruptcy fees to be rid of $40,000.00 in credit card and medical bill debt is an immediate 4,000% “return on investment” really increasing your net worth by $40,000.00, because you erase this negative hit off of your balance sheet. No stock market, real estate or bond investment will ever provide an immediate 4,000% positive return on your investment. Bankruptcy is the US Government’s gift to you and your family that keeps on giving as you go on to build stability, comfort and happiness for you and those who depend upon you.
Would you accept a gift of $19,860.75 cash into your bank account from the U.S. Government? Why of course you would accept a $19,860.75 perfectly legal cash gift! Bankruptcy is just such a gift. By illustration, if you are struggling under total $500 monthly credit card and medical bill payments but then file for bankruptcy under the laws of the United States of America, you could thereafter begin to contribute that $500 monthly amount into your 401k, savings account or other investments. Bankruptcy would enable you to start saving $500 monthly (over $6,000.00 per year) towards retirement or other goals. With the addition of a very conservative compounding interest rate of just five percent (5.0%) per year you would have over $19,860.75 “cash in hand” after just three short years. We encourage you to accept the US Government’s $19,860.75 personal gift to you.