Bankruptcy While Applying for Disability

A client who is in the Application-Denial-Appeal cycle of disability benefits will often experience severe financial difficulties before they obtain their award. Contrary to some popular misconceptions, bankruptcy laws can actually help preserve a client’s resources and assets. Bankruptcy while applying for disability is possible.

  1. Missed house payments can be paid over 36 to 60 months without additional interest in a Chapter 13 bankruptcy. A client who can pay their regular house payment and the arrearage payment will be able to keep their home. During this time, bankruptcy while applying for disability may be right for you.
  2. A car loan that would be paid off during a Chapter 13 Plan can be spread out with lower payments over the whole 36 to 60 months of the plan. During this time, bankruptcy while applying for disability may be right for you.
  3. A client who has lost their driver’s license due to non-payment of fines will get the license back if the fines are included in a Chapter 13 Plan.
  4. During this time, bankruptcy during disability application may be right for you.
  5. Store credit card balances secured by purchases such as Sears or Les Schwab may be reaffirmed at a lower balance and payment based on the current value of the products purchased on credit. During this time, bankruptcy while applying for disability may be right for you.
  6. Again, contrary to conventional wisdom, student loans may be partially or fully discharged in bankruptcy. In order to do so, “a debtor must establish (1) that he cannot maintain a minimal standard of living for himself and his dependents, based on his current income and expenses, if he is required to repay the student loans; (2) that additional circumstances (disability) indicate that his inability to do so is likely to exist for a significant portion of the repayment period of the student loans; and (3) that he has made good faith efforts to repay the loans.” Judge Corbett in the Eastern District of Washington requires debtors and student loan lenders to attend a mediation to resolve the matter based on these factors.

Filing for bankruptcy while applying for disability may be the right choice for you.

Do-It-Yourself Bankruptcy

Do-It-Yourself Bankruptcy, is it the best choice for you?


Now days DIY (do-it-yourself) projects are becoming increasingly popular, with our economic status and the need to save money, it may seem like a good idea, but is a DIY bankruptcy your best choice? For the latter of Americans, a DIY bankruptcy could end up costing you more than it will save you. Bankruptcy attorneys have the experience to properly prepare your bankruptcy filings in order to benefit you.


Most Common Disadvantages of do-it-yourself Bankruptcies:
1) Bankruptcy is a complicated process. You will spend hours trying to educate yourself on the procedures of a bankruptcy case where a bankruptcy attorney will already know what needs to be done. It is much safer using an attorney who already knows the system to avoid any complications or mistakes that could occur if you try to prepare and file on your own.


2) Bankruptcy hearings and meetings require your presence. Judges and Trustees may present questions or concerns regarding your bankruptcy, you may not know the answers to, where an attorney will know the general issues that cause concern and the way to settle those concerns. Often times Debtors give too much information or say too much while in the presence of the judge or trustee. For example, questions that may be asked of you in a meeting of creditors are extremely limited; you will not know what questions you don’t have to answer.


3) There is always a greater chance of making a mistake when you are preparing a bankruptcy yourself. Once again bankruptcy attorneys prepare and file bankruptcies daily; they know the system and the way to properly prepare your bankruptcy in the best interest of you, the Debtor. Non lawyer bankruptcy form preparers are allowed only to assist in filling out forms and may not give legal advice. They must not instruct you what to do to get the best result; a lawyer is obligated to do just that.

4) Some errors in bankruptcy, such as not reporting property, pre-bankruptcy transfers, or certain creditors, may violate Federal Criminal Law. Debtors violating such laws may face jail time.

These are just some of the disadvantages you may face when filing a bankruptcy yourself. As a law firm we would advise you to seek the advice of an attorney before attempting to file Bankruptcy on your own.