Frequently Asked Questions

Q:  Does it cost anything to get an initial consultation with Mr. Fry?

A:  No.  Every client is entitled to a FREE INITIAL CONSULTATION.

Q:  What type of Bankrupty does the Fry Firm handle?

A:  The Fry Law Firm handles primarily Chapter 7 Bankruptcy.

Q.  How do I start the Bankruptcy process?

A.  Assuming the client's income qualifies to file Chapter 7, the client will be required to take 1) Credit Counseling over the phone or internet, and 2) after your bankruptcy has been filed, your must take a Course in Financial Management in the same manner.  These classes are done from the comfort of your own home, so you don't go anywhere.  The contact information by internet is and by phone is (800) 205-9297.  The cost for these classes is $ 25.00 for the first class and $ 15.00 for the second class.  The cost is the same whether you are a single filer or married filer.  THESE CLASSES ARE REQUIRED FOR THE CLIENT(S) TO COMPLETE THEIR CASE AND RECEIVE A DISCHARGE.

Q:  How do I know whther I qualify to file for a Chapter 7 Bankrutpcy?

A:  The debtor must pass two quailifcation tests in order to qualify for relief under the United States Bankruptcy Code.  The first test is referred to as the Means Test.  This test compares the monthly gross income of the debtor to the Median Family Income by Family Size living in the same locale. See the attached link to view the median income as determined by US Census data.  .     

If the Debtor's income is over the median income for that local, then a rebuttable presumption of bankruptcy abuse arises, which may then be rebutted by the debtor completing the Means Testing.  In most circumstances, the government Means Test is generous in its allowance for monthly expenses which include housing, food, clothing, transportation, etc. Assuming the debtor passes the means testing, the debtor must then complete the actual income to expense test under Schedule I and J.  So long as the debtor's month necessary living expenses equal, exceed, or are within $ 100.00 of the debtor's monthly take home income, the debtor will qualify to file a Chapter 7 Voluntary Petition under the United States Bankruptcy Code.

Now all of that being said, it is a lot simpler than its seems, and your experienced bankruptcy attorney, Otto R. Fry, will walk your through it step by step in a simple free initial consultation.  Often times, consultations can be done over the phone.

Q:  What is the difference between a Chapter 7 and a Chapter 13?

A:  In Chapter 7, the person filing the bankruptcy declares to the Court that it does not have sufficient income to meet his or her monthly necessary expenses, and therefore has no money left at the end of the month to pay back to its creditors.  In a Chapter 13, a debtor may make too much money to qualify to file a Chapter 7, or the Debtor may have a home in foreclosure that has significant equity, and the debtor wants to stop the foreclosure.  In my experience in handling both Chapter 7 and Chapter 13 Bankruptcies, I believe that a Chapter 13 is often times much more difficult on the debtor than is a Chapter 7.  Certainly the Means Test and other factors may preclude a debtor from filing a Chapter 7, but in the long run, it is my experience that a complete fresh start under a Chapter 7 is usually a better option if the debtor qualifies.

Q:  What are the advantages of filing a Chapter 7 vs. Chapter 13?

A:  First and foremost COST.  The attorneys fees in a Chapter 7, including the filing fee and credit counseling fees can be completed for as little as $ 1,100.00.  The attorney's fee in a Chapter 13 Bankruptcy can cost up to as much as $ 2,500.00 to $ 3,000.00, which does not include the money paid to the US Trustee, nor does it include the amount that the debtor must pay into a Chapter 13 Plan for a period of up to sixty (60) months.  The requirement under the Chapter 13 Plan is that the debtors pays to the US Trustee all monies the debtor earnes over and above the Debtor's monthly necessary expenses.  Included in the Chapter 13 Plan are the Debtor's car payments and mortgage payments, for which the debtor pays an administrative fees of between 5.00 percent and 6.00 percent of money paid in.  As you can see, if the Debtor does this for a periof of 60 months, often times the Debtor has no money in case of emergencies.  A more in depth consultation with Mr. Fry can further explain the pros and cons of Chapter 7 v. Chapter 13.

Q:  How much do I have to pay up front to actually file my Chapter 7?

A:  At the Fry Law Firm, most debtors will pay a total of $ 1,100.00, which includes the $ 306.00 filing fee.  In order to actually file your bankruptcy petition and stop the collection activity, lawsuits, garnishments, harrasing phone calls, etc., the client will pay one half of the total costs, which is usually $ 500.00 to $ 550.00.  WE FILE YOUR CHAPTER 7 WHEN YOU HAVE PAID THIS AMOUNT.  Most attorneys require payment in full, but we work with our clients becuase most clients cannot come up with the full amount up front.

Q:  Do I get to keep my income tax return if I file a Chapter 7?

A:  In most circumstances, the answer is a resounding, YES!  The Bankruptcy Code provides the debtor with numerous "EXEMPTIONS" which protect your assets.  For example, if you own a home and are married, the Debtors are entitled to exempt $ 43,250.00 in equity in their home, $ 6,900.00 in equity in a motor vehicle, $ 23,050.00 in household goods, unlimited exemption in ERISA qualified retirement accounts.  Most importantly, if the debtor does not own a home, then the exemption amount he or she could have used for the home can be used to exempt other property of the debtor, which includes the "tax return."  This "wild card exemption" as it is commonly referred to, can be used even if own a home and did not use up all of your exemption on your equity in the home.   Of course, these issues can become a little complicated, and that is why you have an experienced attorney like Mr. Fry to walk you through the details.  Mr. Fry has personally handled over 800 bankruptcies since 2000, and knows all the ins and outs of filing for relief under the bankruptcy code.  In 95% of Chapter 7 bankruptcy cases, the debtor is able to keep all of his property.

Q:  Does filing Chapter 7 get rid of my house payment or car payment?

A:  Chapter 7 only DISCHARGES a mortgage or a car payment in bankrutpcy if the debtor decides to SURRENDER THE PROPERTY.  If the debtor wants to keep his home or car(s), then the debtor is required to be current on the payments or reach an agreement with the mortgage company or lien holder of the car to get the payments current.  Often times, lenders will agree to defer a payment to the end of the note, but the debtor needs to make sure this agreement is in writing or confirmed by letter from the bank or lender.  IN ORDER TO KEEP SECURED PROPERTY, I.E., HOME OR CAR SECURED BY A NOTE, THE DEBTOR MUST CONTINUE TO MAKE THE PAYMENT DURING THE PENDENCY OF THE BANKRUPTCY AND THEREAFTER.

Q:  If I want to keep my house and/or my car, how is that handled in my bankruptcy?

A:  In the  STATEMENT OF INTENTION  the debtor will declare whether you will reaffirm that debt or surrender the property.  If you reaffirm the debt, the creditor will in most cases send your attorney a Reaffirmation Agreement whereby you sign a document which basically reaffirms the previous agreement you had with the lender, and that you agree that the debt will survive the bankruptcy and the debtor will continue to make payments until paid in full. 

Q:  Are there circumstances when I should not reaffirm a debt in bankruptcy?

A:  Yes, I do not reccomend reaffirming secured debts on cars that are more than five (5) years old, or that have more than 100,000 miles, as there is a good chance that the car may break down at that point.  The debtor can continue to make the payments, and so long as the debtor is paying, most creditors will not repossess the car.  Ford Motor Credit REQUIRES  a reaffirmation agreement in every case, and if the debtor does not sign one, they will repossess the vehicle even if the debtor is current.

Q:  What is a DISCHARGE in a bankrutpcy?

A:  The term Discharge is a legal term of art, and means that when a debt is discharged in bankruptcy, then the debt cannot be collected by legal means.  In other words, the creditor can not sue the debtor in court, and attempt to collection a judgment by means of garnishment of wages or execution against property.