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The Bankruptcy Process

The Bankruptcy Law provides an opportunity for a fresh start to those individuals who’s financial difficulties have them unable to pay their bills or have put them at risk of losing their house, cars or other property. Bankruptcy is a complex area of law which’s requires the services of an attorney experienced and specialized in Bankruptcy law to properly evaluate your specific situation, provide legal advise, and provide representation you can trust to protect your assets and discharge your debts.

The Bankruptcy Law Office of Peter Schaefer offer a free first consultation where we will thoroughly discuss your specific financial situation and determine whether a Chapter 7 or Chapter 13 Bankruptcy is in your best interest. We will provide all the information you need to make the best decision for you and your family.

The two most common forms of Bankruptcy available to an individual and families are Chapter 7 and Chapter 13 Bankruptcy.

Under a Chapter 7 Bankruptcy, an individual completely eliminates all of their legal liability to pay unsecured debt, such as outstanding credit card bills, medical bills, unsecured personal loans, judgments, etc. Certain debt can not be eliminated in Chapter 7 Bankruptcy such as child support, alimony/spousal support, student loans, or tax penalty debt.

Under a Chapter 13 Bankruptcy, an individual consolidates their debt and restructure it into an affordable monthly payment plan. Unlike Chapter 7 Bankruptcy, Chapter 13 does not completely eliminate Debtors unsecured debt. In a Chapter 13 you are required to repay a small percentage of your unsecured debt. However you pay off your debt in affordable monthly payments over a period of three to five years. The amount you pay every month will be determined by: your monthly income; expenses; your disposal income and your non exempt assets. Furthermore, you will most likely get to keep all of your assets and property throughout the bankruptcy process.


Myths and misconceptions often prevent you from making a sound decisions. The Bankruptcy Law Office of Peter C. Schaefer will take the time to help you fully understand your legal options. Here are the 7 most common myths about bankruptcy:

Myth #1: Bankruptcy will ruin my credit.
Fact: False. After your bankruptcy all of your unsecured debts will be discharged. If you pay all of your bills on time and do not fall behind on any payments, you will see your credit score improve, despite the fact that you filed for bankruptcy. Also, it is likely that you will have credit opportunities immediately after filing for bankruptcy. Filing for bankruptcy gives people with excessive debt the opportunity to rebuild their credit. After bankruptcy you are like a clean slate to lenders. It usually takes less than a year after bankruptcy to acquire new good credit.

Myth #2: I will lose my house, car and other possessions.
Fact: False. Bankruptcy is designed to help individuals who struggle with excessive debt. Bankruptcy was not designed to punish people who do not pay their debts by selling their homes, cars, or possessions. Most people who file for bankruptcy lose no property at all.

Myth #3: I will never be able to purchase a home or car after bankruptcy.
Fact: False. Almost all of our clients have been able to purchase a home or car after filing for bankruptcy. It usually takes about two years after bankruptcy before you can purchase a house and even less time to purchase a car.

Myth #4: I’m a bad person if I file for bankruptcy.
Fact: Absolutely false. Thousands of responsible, good and decent people file for bankruptcy every year. It is much better to take responsibility for your financial future through bankruptcy than simply ignoring your creditors and continuing to avoid making payments towards your debt.

Myth #5: A debt counselor can help me avoid bankruptcy by eliminating my debts.
Fact: False. Debt counselors cannot legally prevent your creditors from: filing a lawsuit against you; garnishing your wages; seizing your bank accounts; or engaging in other collection methods. Bankruptcy can! The only way to eliminate your debt and absolutely stop creditor abuse is to file for bankruptcy.

Myth #6: I can go to jail if I don’t pay my debts.
Fact: False. There is no debtor’s prison. You will not be sent to jail for filing to make payments toward your debt, even if you get sued or a judgment is obtained against you.

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