Debt Relief Agency

Still struggling with debts? Can’t pay your bills? Collection calls won’t stop? If our Debt Adjustment Program doesn’t suit your needs, or if the facts and circumstances of your case merit the filing, our firm can help you resolve your debts through bankruptcy.

The concept of bankruptcy is quite old. There are references to a similar concept in the Old Testament whereby debts were forgiven every seven years and history teaches us that the ancient Romans – perhaps involuntarily – most likely gave rise to the term itself when Roman ‘bankers’ literally broke the table upon which they lent money when they ran out (breaking the bank!). Some countries, like ancient Greece , had no bankruptcy protection at all: debts were simply carried from one generation to the next, ultimately leading to ‘debt slavery’.

Thankfully, here in the United States we have developed a sophisticated system for helping to resolve financial hardship over the years. Although the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA") made sweeping changes to how bankruptcies are evaluated and conducted, it is still a viable option for many individuals who find themselves in debt beyond their financial means.

Many clients that we talk to are afraid of bankruptcy. As a firm, we do believe that it is important for each individual to responsibly repay their debts and ‘make good’ on their financial obligations when possible. However, there is certainly no shame in pursuing bankruptcy: entire countries – such as the Kingdom of Spain under King Phillip II – have gone bankrupt, and when Lehman Brothers Holdings, Inc. filed for bankruptcy in the fall of 2008, they had more than $639 Billion in assets.

There are multiple bankruptcy programs (commonly referred to as Chapters 7, 9, 11, 12, 13, and 15). However, the vast majority of consumers fall into the category of either a Chapter 7 or Chapter 13 filing (explained in some additional detail below). In each instance, bankruptcy is initiated by filing a petition in Federal Court. In general, bankruptcy can provide the following types of relief when you’re struggling with debt:

Under the right circumstances, your non-government debt can be liquidated or discharged (these are fancy words for eliminated)

You will no longer be responsible for debts that can be discharged and that are discharged

Once a bankruptcy is filed, an automatic stay goes into effect – debt collection efforts must go through the bankruptcy court and any pending foreclosure will be halted

Depending upon your state laws, you can keep your home and personal belongings when they might otherwise be exposed to creditors

Your credit score is negatively impacted for 7-10 years, but once you are discharged from bankruptcy, your credit score can be rebuilt successfully and turned into a good credit score

As noted, the vast majority of consumers will fall into the category of either a Chapter 7 or Chapter 13 filing, and these are described in general below. Please note that the law of bankruptcy is far too complicated to be fully described here, and it is best to seek a consultation with a lawyer in our firm to go over details as they apply to your case.


Chapter 7

In Chapter 7, you are required to surrender your ‘non-exempt’ property to the control of a bankruptcy trustee. What constitutes ‘exempt’ versus ‘non-exempt’ property is largely determined by state law, and what applies to you specifically may differ based on your circumstances and the state that you live in. While you must relinquish some of your possessions, successful discharge from Chapter 7 can leave you debt free (with the exception of certain debts like student loans and certain tax obligations which cannot be discharged). However, your secured creditors can repossess non-exempt items such as an additional vehicle even though the debt itself is discharged. Most Chapter 7 proceedings take anywhere from 4 to 12 months.

While BAPCPA has created provisions that restrict the number of individuals that can qualify for Chapter 7, it is still available to assist individuals who meet the criteria.


Chapter 13

It is easiest to think of Chapter 13 as a highly-structured, court-supervised, payment plan. On the plus side, you essentially get to keep most of your assets and possessions (unlike Chapter 7), and the payment plan will be based upon future income and what you can afford as opposed to what creditors demand (with many creditors ultimately receiving less than the original amount of the debt). Depending upon your circumstances, Chapter 13 can provide you with options to modify your debts that aren’t available under Chapter 7, and you may be able to ‘buy back’ and protect a piece of unprotected property that you would like to keep. However, after BAPCPA, the amount and type of debt you’re required to repay was increased, and you cannot obtain additional credit while in Chapter 13 unless the court approves. On average, Chapter 13 takes 3 – 5 years to complete.


Again, the law of bankruptcy is vast, and although BAPCPA made sweeping changes to the bankruptcy process in general, misconceptions abound about who qualifies for protection and when. The Law Offices of Victor Luke can help you navigate the maze and assist in determining whether bankruptcy is the correct course for you.