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What I Learned from My Bankruptcy Experiences
I've been through two Chapter 7 bankruptcies. The first one I did all the paperwork through an online kit, about $700 total. Don't do that unless your situation is fairly simple and you can't get the money for a lawyer. The second one, I hired a lawyer, about $2300 total. I had friends go through bankruptcies and make huge and costly mistakes. Here's what I learned:

1. Find an ABC certified bankruptcy lawyer. Most lawyers are like used car salesmen and treat their customers like suckers. Don't be a sucker. Google for ABC certification; there's a website for it. I only found 21 certified lawyers in all of Arizona, and it was well worth it. My lawyer was on the ball, and every other lawyer who came to the Trustee meeting had made mistakes in their paperwork and got called out on it.

2. Find a lawyer that has simple pricing and no hidden or extra costs. For a joint filing, I had to pay about $2300. A fixed fee to the lawyer, the filing fee, and credit report fee, and the costs of the bankruptcy education. A lot of lawyers have discounted fees, but then nickel-and-dime you from a laundry list of "possible" additional charges which ultimately costs you more than you save.

3. Immediately stop using and paying unsecured credit. E.g., stop paying credit cards, but keep paying the car and house payment. If you use credit up to the last minute, it looks dishonest. If you pay up to the last minute, then it looks like you can afford to make payments.

4. Learn what the "means test" is. Most lawyers waste your time by having you unnecessarily list all your insignificant assets, like clothing and pets. That's only necessary if your income is above a certain amount. If your income is below a certain amount, then it is assumed that you don't have the means to pay off your debt, and you are not required to list everything you own.

5. After you get your credit report, chase down every insignificant debt you owe, and list them. If you miss listing a debtor, you can still owe them money after a discharge.

6. Ask your lawyer about how to estimate and list where all your money goes. For example, you are allowed to spend money on entertainment, and no one is going to ask you for the receipts. That way, all your estimates look reasonable, be truthful, and won't raise questions.

7. Be absolutely completely 100% honest and above board. Some people try to hide assets by handing money or cars over to relatives. It doesn't fool anyone. The Trustee spends all day, every day, over many years dealing with sneaky people who try to protect some of their money. It never works. Besides, the Trustee won't want anything you have unless you have an awful lot of it. Worse, if the Trustee thinks you're trying to pull a fast one, you're going to have a bad time (which can include jail).

8. You're going to get a zillion offers to buy a car in the mail. This is normal, if not amusing. It's safe to buy a car if you need to.

9. The Trustee will have rights to a portion of your tax refunds. See #7, don't get greedy. Turn over tax refunds. A trustee can have your discharge vacated if you try to rip him off. In my case, he didn't want any of it because it wasn't a significant amount, even though it was nearly $2,000.

9. You can easily rebuild your credit score, it just takes a few years and some effort (like paying your bills). I'm on my second round now. "They" make it sound like a bankruptcy will ruin your life. Actually, it saves your life and really does give you a second chance. Debtors don't want their debt discharged, and the industry for collecting debt is absolutely brutal. They will say anything to get their money. The bankruptcy laws are one of the few laws left that actually protect the people.

10. When the debt collector calls you about that discharged debt, lose the attitude and just tell them it was included in a bankruptcy. They might ask when and such, just tell them. They won't call anymore.

That's what I learned from my experiences. Did anyone else learn anything significant?

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Thank you for sharing this. Very helpful info. I hope you will stick around on the forums and help answer questions for people concerning bankruptcy. A lot of people come to these forums totally lost and just a little bit of guidance and advice can help them change their lives.

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I'm in limbo

My chapter 7 was dismissed, meaning that it was denied. All my accounts, however, are still closed. I'm spinning mentally because I can't grasp the closed, amount owed $0, if I lost my bankruptcy case. when I look to confirm my debt still exists with my creditors online, the accounts don't exist anymore. My question is, basically, why aren't my creditors reporting my debt to credit reports anymore? 

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