Compassion is a central theme of our practice, and we take great pride in assisting our clients in obtaining a fresh start from their debt problems.

Foster Law Offices strives to provide clients with exceptional service and the efficient resolution to legal matters related to consumer and business debt. We represent clients of all types. From large institutional clients, to bankruptcy trustees and receivers to individuals struggling with mortgage, credit card, business and most other types of debt, our bankruptcy practice offers debt solutions to clients seeking liquidation or reorganization as well as clients seeking to sell or purchase real property or other valuable assets in a Chapter 11 or Chapter 7 bankruptcy case.

Consumer Bankruptcy

A consumer bankruptcy involves bankruptcy cases where more than 50% of a client’s debt is NOT related to business or investments. Consumer bankruptcy cases involve debts such as a mortgage on a primary residence, credit cards, auto loans, medical bills, taxes, and collections. Most consumer bankruptcy cases are filed as Chapter 7 cases. Although a Chapter 7 bankruptcy is sometimes referred to as a “liquidation bankruptcy,” very few Chapter 7 cases involve any liquidation (sale) of a client’s assets.

When filing a Chapter 7, clients are required to disclose personal information such as name, address, social security number, business tax identification number(s), as well as assets, income, expenses and debt as of the date of the bankruptcy filing. Clients must also disclose various other information on the “Statement of Financial Affairs” section of the bankruptcy case.

In addition to disclosing information, Clients are required to complete two credit counseling courses. The first course is taken prior to the Chapter 7 filing and a second course must be completed after filing but prior to discharge. Most credit counseling classes can be completed online.

Click below to read a brief summary of each step in the bankruptcy process:

1) The Automatic Stay:

Immediately upon the Chapter 7 filing, an automatic stay goes into effect.  Pursuant to 11 U.S.C. 362(a) the automatic stay prohibits most creditors from undertaking most collection activities and can be a tremendous benefit for those facing lawsuits, foreclosure, creditor harassment or any other collection action subject to the stay.  More specifically, the automatic stay stops most lawsuits, garnishments, and acts to prohibit bill collectors from calling, writing or otherwise contacting the Client. The automatic stay also prohibits a mortgage lender from proceeding with foreclosure and an automobile lender from repossessing a Client’s vehicle.

2) The Meeting of Creditors:

Within 20-40 days after filing, Clients must appear for a court hearing called a Meeting of Creditors, or 341 Meeting.  The meeting is conducted by an individual appointed by the United States Trustee’s office (division of the Department of Justice) called an interim trustee.  Trustees are not judges.  In most cases, trustees are highly experienced, and skilled, lawyers and certified public accountants. The role of the Trustee is to evaluate the Client’s case and determine whether the Client maintains any assets that may be sold by the Trustee and proceeds of tvhe sale paid to the Client’s creditors.

3) Assets and Exemptions:

Prior to filing, a Foster Law Offices attorney will evaluate your case and advise you of any risk you may have in losing assets in a consumer Chapter 7 case.  In most cases, Client’s assets are protected by exemptions under state or federal law.  Exemptions protect assets up to certain dollar amounts.  If an asset is fully exempt under the relevant statutory exemption, the Trustee cannot sell the asset in a Chapter 7 bankruptcy case.  In some cases, Clients have chosen to file bankruptcy and allow the liquidation of an asset due to either a high debt burden or the time and expense involved in selling the asset outside of bankruptcy.

It is important to consult a bankruptcy attorney experienced in liquidation cases in order to fully understand the impact a Chapter 7 filing may have on a Client’s real and personal property.  Surprise is not an emotion a bankruptcy client needs to feel after struggling with the stress of debt and the causes associated with a Client’s decision to file Chapter 7 bankruptcy.

4) Liquidation:

If an asset is sold in Chapter 7, the bankruptcy case will take several months longer to complete and close.  Assuming no parties’ filed objections, the discharge will be entered 60 days after the Meeting of Creditors.  The entry of the discharge occurs even though liquidation has not been completed.  Recently, a number of Chapter 7 trustees have decided to undertake short sales on properties Clients decide to surrender in their bankruptcy case.  These “bankruptcy short sales” can have positive impacts on the Client’s post-bankruptcy credit reporting as well as allowing the Client to avoid paying non-dischargeable HOA dues after the property is sold.

5) Discharge:

If the Trustee determines that a Client’s assets are exempt, she files a “Report of No Distribution” shortly after the Meeting of Creditors.  Provided there is no objection to the Client’s case, a Discharge is entered by the Court 60 days following the Meeting of Creditors.  The Discharge is a bankruptcy court order providing for the elimination of dischargeable debt.  Debt subject to the Chapter 7 discharge includes: credit card, medical, mortgage, auto loan, apartment leases, business debts, and a wide variety of other debt.  Debt not subject to discharge in Chapter 7 includes: student loans, child support, alimony/spousal maintenance, most tax debt, traffic/parking tickets, HOA dues incurred after the filing date of the bankruptcy case, and other debts specifically identified in 11 U.S.C. 523(a).

6) Post-Discharge Credit Reporting:

After a Client receives her discharge and the case is closed, we recommend Clients carefully review their credit report in order to ensure that all debts are being properly reported as “discharged in Chapter 7.”  If a debt account is reported as open, delinquent or reporting other than discharged, the Client must formally dispute the incorrect reporting.  The basis for the dispute should be the Chapter 7 discharge.

What is Chapter 13 Bankruptcy?

A Chapter 13 bankruptcy is typically utilized by a home owner who has fallen behind on mortgage payments or an individual whose income is too high to qualify for Chapter 7.A bankruptcy filed under Chapter 13 is designed for people with regular income who want to or can pay their debts but are presently unable to do so. A Chapter 13 bankruptcy enables the debtor, under court supervision and protection, to propose and carry out a plan for repaying creditors over an extended period of time. The importance of working with an experienced Kona bankruptcy attorney, or Hawaii bankruptcy lawyer familiar with all of the details of Chapter 13 bankruptcy in the State of Hawaii cannot be overstated. It has to be done right the first time. If you have any questions about filing bankruptcy in Kona, the Big Island, or the state of Hawaii, please contact us so we can set up a free consultation for you with one of our Big Island bankruptcy lawyers. You will be glad you did.

How Foster Law Offices Can Help You:

At Foster Law Offices, we are an experienced, friendly and compassionate Seattle consumer bankruptcy practice that is dedicated to protecting our client’s assets and legal rights while eliminating or restructuring debt.  As a federally-designated “debt relief agency,” we have assisted a wide range of clients facing debt-related problems such as:

  • Credit Cards
  • Medical Bills
  • Mortgage Delinquencies
  • Home Foreclosures
  • Lawsuits
  • Garnishments
  • Payday Loans
  • Auto Repossessions

Our services include client-focused representation of individuals and businesses in Chapter 7, Chapter 13, as well as foreclosure and mortgage counseling and out-of-court (non-bankruptcy) settlements of credit card, medical, business bankruptcy and other debt.

We offer low, flat-rate fees for bankruptcy case preparation and a free initial consultation to discuss your best option when facing debt and credit problems.

You can rest-assured that we will listen carefully to your situation and offer friendly and non-judgmental legal advice and counsel tailored to solve your individual needs. We welcome your inquiries and questions regarding our real estate practice. To contact us, please complete the Quick Contact Form or feel free to call us at (808) 348-7800.

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Jeffrey Foster

Attorney Jeffrey Foster proudly represents individuals and business who are looking for representation and strategic legal advice.

Aloha ~ I look forward to the opportunity to assist you in resolving your case, claim, transaction or litigation matter.

Thank you and Mahalo,
Jeff Foster
(808) 348-7800

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