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hi everyone on Carol Carini from Billabong Marketing
and today I'm talking with John Farver from Farver Law Firm in BellevueWashigton
john has 22 years of experience in the field for bankruptcy
and has a vast knowledge and skill in the industry
and John keeps his client's and helps his clients
tackle the confusing and sometimes daunting
path through bankruptcy and today he'll be talking
about what bankruptcy is and will give us an overview
hi John
I'm good I'm good thankyou now John
I know that there a a lot of people out there who might be thinking about
bankruptcy
but are not really sure about how it works
can you explain to us what bankruptcy
is. Sure bankruptcy is a legal method
a discharging individual or companies
debts and obligation to pay back money
that was loaned to them
its contained in the statute it's a federal law
and again it allows people who have found themselves and each financial trouble
to be able to discharge their debts and have fresh start
I bet there's more to it isn't there?
yes there'squite a bit more to it and
and the law is relatively specific
but its clear intention is to allow you
as you are an individual or company who finds yourself in
in that position where you are insolvent which means
you are unable to pay your debts with your current income
a chance to in affect wipe out those debts
and move forward with your life it's called
allowing a a honest debtor to get
clear fresh start
an honest debtor makes it
a peron feel well I'm not a bad person
because I need to go into bankruptcy I mean that's a really phrases to use
well Carol you know in today's economy especially
it is so easy for someone to go from
doing just fine with their financial situation
to be in dire need off
bankruptcy and an example of that is
a married couple on one person loses a job and living
you know normally yours paychecks made it very easy for you to pay your debts
and he even put savings away. One person loses
their job your income is cut in half even if it's for a short period of time
and during that period of time you're using your credit
to continue to survive but once
your job starts again you realize that you just can't keep up
up there there are many many examples of how people can
how people's financial lives can be upset
spouse losing jobs person losing their jobs
automobile accidentscausing somebody to miss work
illness causing you to miss work I'll
a extreme drop in the economy has happened here in 2008
and the housing market crash
its so easy in today's economy
to go from doing just fine to be in dier financial straits
and that's exactly the purpose
that bankruptcy was set up for was to allow people who found themselves in
that situation is
to get out I think also
you mentioned since the economy crash in 2008
that there's been so many average people
who we're doing really well one minute
both had a job kids were at school
they had cars and everything they really wanted
and then t they wake up the next day
and it's all gone and they're
honest people who you can do with the bankruptcy if that was needed
Exactly
people in that situation the
economy needs people to spend money on that's what makes our economy roll
forward
if your mired in debt and you can't pay that back to you can't spend any money
economy continues into its tailspin what
the bankruptcy code and bankruptcy is intended to
is allow somebody who
through no fault of their own or even fall to their own
finds themselves in a situation where they can no longer
pay their debts or you know purchase goods and services they need
to be able to wipe that debt out and then get on with
with spending again saving again
and the economy as a whole continues to roll forward
it's surprisingly easy for somebody to go
from
doing just fine to be in terrible shape
I seen this over and over again last
27 years
there are two types of bankruptcies that you
specialize in and that is chapter 7 and chapter 13
and I think what is going to be interesting
everyone this is going to be a series so we are going to have
15 to 20 shows
about bankruptcy we're really going to get into the nitty-gritty so you
understand exactly what it is what it means
what sort of bankruptcy might need to take
and all the things that are available to you
if you are going through a problem a debt
problem and we're going to be going through those
John yes we are
I primarily do consumer bankruptcies i'm talking about.
individuals
and small businesses if that's required
but individuals primarily and there are two types of bankruptcies and we will go into this
and much more greater detail
future shows but at this point there's two types a bankruptcy you want to be
concerned with and one is a chapter 7
and that is what everybody considers when you think about bankruptcy you're
thinking about a total liquidation
and wiping out all is your unsecured debt and that is a chapter 7
file a chapter 7 you I'll
disclose all your property are your debts and all your assets
and you allow the court to decide that
I you should get your fresh start and you should wipe out all your debts
start
fresh and that's all your unsecured debt and again what it will discuss the
difference between secured and unsecured debts future
interviews right now think of chapter 7 as what you always thought as
bankruptcy
wiped out all my debt let me go I'm start fresh
without that weight on my shoulders
a chapter 13 bankruptcy
is called
a wage-earners repayment plan
there are certain situations where a debtor
which is what will call a person is filing bankruptcy
wants to keep
a lot of his property and he wants to pay back some
debts and if there's a reason for him to pay back its debts
stretched out over period between three and five years
no interest and at the end of that three or five years
whatever hasn't been paid off then disappears
as I said we'll go over this in greater detail
but those are the two primary consumer bankruptcies
straight liquidation and get rid of all your debt keep all your stuff
second is paying back all or a portion of your debt
or certain debts over an extended period of time
thank you john I think everyone's going to be looking forward
to
the series that we're going to be doing over have the next few weeks
and the next one's going to be about chapter 7 and chapter 13 what it's all
about
so thank you john welcome
thank you and everyone please remember if you would like to talk John
Farver you can go to farverlaw.com
that's his website if you want a free consultation
you can go to farverlaw.com/free
and I you can also call him and the fine numbers on the screen right now
thank you everyone thank you john and will see you again in the next show