Hello everyone, thank you so much for joining us today on This Needs to be Said. We’re here with our friend attorney, Bob Doig, and he’s going to talk with us about bankruptcy matters. Welcome back Bob, how are you?

I’m just fine Katherine, thanks. How are you?

I am doing wonderful. We will let people know how to get in touch with you by the end of this interview on today. I just want to jump right into these scary things about bankruptcy. I want us to help people see that it’s not so scary, and that you are here to help them. Okay?

Sounds good.

All right. Now, here we have research saying that over 90% of all bankruptcies are filed because of medical bills, divorce, or a job loss. In your experience, has that been accurate? Is this information accurate?

Absolutely that’s accurate, without a doubt. It’s not unusual Katherine for me to meet with people who have experienced more than one of those things, where they’ve been divorced and had medical bills, or lost their job and divorce, whatever. Every now and then sometimes people hit the trifecta, all 3 of them, and it’s a pretty sad situation. Fortunately, the bankruptcy laws are there to help.

Wow. Well, you’re here to help us understand that. It’s pretty tough already having to go through any 1 of those things, but to have all 3 of them is extremely tough I can imagine. Then to have to come and hit a reset button with you getting a bankruptcy filed.

Absolutely, but it’s a good thing.

I think it is, I think it is. Tell me what’s the difference between a chapter 7 and a chapter 13?

Well, the more common, at least in Colorado the more common cases, the case filed under chapter 7. With a chapter 7, the whole thing from the time the case is filed until the person receives the discharge of their debts usually takes about 4 and 1/2 to 5 and 1/2 months. There’s no payment plan or anything like that, it’s pretty straight forward. Some people refer to it as a liquidation, but people get to keep their cars and houses typically and lots of other things, which is called exempt property. With chapter 13, the debtors will file a chapter 13 plan and they’ll make monthly payments to a chapter 13 trustee for at least 36 months, no more than 60 months. Then at the end of those time periods, if any of the dischargeable debts have not been paid off in full, the remaining debt will be discharged. That’s the basic difference. One of them takes about 5 months, one of them could take up to 5 years. Pretty significant difference. Of course not everyone qualifies to file a chapter 7, so sometimes people if they need to file a bankruptcy and their income is higher than the median and they don’t pass the means test, then a chapter 13 would be their option for them.

Now, you just mentioned that … Is it at the end of the chapter 13 if they haven’t paid everything that the balance would be discharged possibly?

That’s correct, yeah. If it’s a dischargeable debt, if their chapter 13 plan is confirmed and they make all the payments throughout the term of the payment plan, at the end of the plan they will get discharge of any outstanding debts that haven’t been paid that are dischargeable debts.

Okay. In that case is the goal really to see if the person is going to be consistent with their payments, because they still would have a balance that would be able to be discharged? What’s the goal there I wonder?

The goal there is to get their debts discharged. That’s why anybody files bankruptcy is to stop the calls, stop the garnishments, and ultimately to have debts that they can’t, that they’re unable to pay, to have those debts discharged. Whether it’s a chapter 7 or a chapter 13, that’s the effect. Ones just a lot quicker than the other.

I see, I see. I was just curious because chapter 13 they have the payments, they’re making payments, so … This just may be because I’m thinking of the old way before, the old way of thinking of paying your bills and trying to keep up with things before having to file bankruptcy that you have this repayment plan, so my mind was thinking that if I have 5 years that I must be paying it off totally, and that was kind of curious to me that there would be a balance that may be leftover, but yet still could be discharged. Okay, thank you for that one.

Sure.

Many people have heard or read, that there’s a new bankruptcy law that can take their right or ability to file bankruptcy away, is this true?

Well, what’s referred to as the new bankruptcy law actually went into effect in October of 2005. It’s going to be 11 years old next month. It’s now the 14th of September, 2016. I think it’s kind of humorous that people refer to it as the new bankruptcy law. Did it take away people’s rights to file bankruptcy? No, it changed some of the things that people had to do in order to file bankruptcy. Like as we were talking earlier about chapter 7 and chapter 13, if a person has not filed a chapter 7 bankruptcy in the preceding 8 years, and if their household income is less than the median income for a household of their size in the state where they live, then they qualify to file a chapter 7 bankruptcy. Most people have no problem at all, at least most of my clients have no problem at all meeting that criteria.

Occasionally people come in and they’re high wage earners, and they’ve just got big bills that they can’t pay, maybe they’ve lost a job, whatever, but they may not qualify for a chapter 7. That doesn’t mean that they can’t file bankruptcy. In that case, they could file a chapter 13 probably. By doing that ultimately like we discussed earlier, the dischargeable debts will be discharged at the end of the case.

Okay. Now, before we tell people how to get in touch with you at your law group there, what are some things that … Because you’ve said dischargeable, so what are some things that are labeled non-dischargeable that would not go into bankruptcy?

Well, they have to be listed in the bankruptcy case, but they’re not going to be discharged. Generally, student loans are not dischargeable in bankruptcy. Recent tax debt is not dischargeable in bankruptcy. Domestic support obligations like child support, or spousal maintenance, those are not dischargeable in bankruptcy. Debts caused by the debtor committing fraud are not dischargeable in bankruptcy. Debts caused by operation of a motor vehicle while under the influence are not dischargeable in bankruptcy. That’s a pretty good list of the things that aren’t dischargeable, but there are other things too, but those are the most common debts that are not dischargeable.

Okay. They can talk about their personal situation with you there in Colorado by having a consultation, because I know one size doesn’t fit all. I do appreciate you sharing with us some basic bankruptcy and how it can help a person press that reset button. Bob, tell people how to get in touch with you at the Doig Law Group.

Okay. If they want to just give us a call we’d be happy to discuss their situation with them and answer any questions they might have, explore their options. They can call us at 719-227-8787. That’s right here in Colorado Springs.

Awesome. I want to say thank you, and until next time have a wonderful day.

Thank you. You too Katherine, I enjoyed speaking with you today.

Thank you, same here.

Thanks. Okay, bye-bye.