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Three Hard Truths About Filing for Bankruptcy

If you start plugging numbers into bankruptcy protection calculators online, you might end up with an overly optimistic view of how a bankruptcy filing will affect your finances. You might think, “Really? I can get rid of $100,000 of debt for $800 and keep my house and car? Sign me up now!” Of course, you understand that bankruptcy will not make your student loans and overdue child support payments disappear; a big part of your motivation for filing for bankruptcy is to free up funds to pay the debts that you cannot discharge. 

As with college, fertility treatments, entrepreneurship, and so many other things in life, there is no guarantee that your experience with bankruptcy will follow the same path as those of the people who told their stories in documentaries or on the websites of professionals who stand to gain from your participation. A bankruptcy filing can have consequences other than the ones you anticipated. An Oakland Chapter 13 bankruptcy lawyer can help you think realistically about your bankruptcy filing.

Failing to Keep Up With Chapter 13 Payments Can Leave You in a Vulnerable Position

The legal fees for a Chapter 13 bankruptcy filing are more expensive than for Chapter 7, and it takes much longer to discharge your debts, but some people choose Chapter 13 because it does not involve liquidation of assets. In a Chapter 13 bankruptcy case, your lawyer negotiates a debt settlement amount with your creditors, and you pay the agreed-upon amount in monthly installments. At the end of the process, which usually takes between three and five years, the court discharges the remaining balance of your debts.

If you do not keep up with your Chapter 13 payments, though, the court has the right to change your case from Chapter 13 to Chapter 7. This means that the court can sell your non-exempt assets to settle your debts. You will not lose the house you live in or the car you drive to work, but you could lose your motorcycle, your boat, and your beach house.

Bankruptcy Makes You Temporarily Ineligible for an FHA Mortgage

Federal Housing Authority (FHA) mortgages are the most affordable kind of mortgage loan; without them, far fewer people would be able to afford homeownership. Filing for bankruptcy does not mean that you will never be able to qualify for a mortgage. The FHA does, however, require that applicants wait at least two years from the time the court accepts their bankruptcy case before they apply for an FHA mortgage loan.

Filing for Bankruptcy is Easier for Rich People Than it is for You

Everyone, no matter how rich or how poor, is eligible to file for bankruptcy if they cannot pay their debts. Rebuilding your credit after bankruptcy is easier and faster if you have a high income, though.

Contact the Law Office of Melanie Tavare About Chapter 13 Bankruptcy Cases

A bankruptcy lawyer can help you avoid setbacks and unintended negative consequences in your bankruptcy case. Contact the Law Office of Melanie Tavare in Oakland, California, or call (510)255-4646 for a free case evaluation.

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"Melanie is the best she very responsive and helpful throughout the process everything was taken care of smoothly. If you are thinking of going through bankruptcy she is the best attorney for you. I will forever be grateful having the chance to work with her. She is very honest too."


"I can't thank Melanie enough for helping me through a challenging process and doing so with incredible knowledge, professionalism and tenacity! She went to great lengths to keep me informed, she responded quickly to my questions, and communicated in terms that I could understand. I highly recommend getting in touch with Melanie should you have the need."


"Choosing to work with Atty. Melanie has been one of the best decisions I've ever made. She was a very patient professional to work with and attentive while providing valuable solutions to all of my concerns. If you are searching for of an Attorney who is knowledgeable, transparent, and diligent - well that's Atty. Melanie."


"What I liked about working with Melanie was how prompt and easy to work with she was. She made the process clear and understandable with as little stress as possible. I would work with her again and recommend her to others."