Speaker 1:
Okay. Thank you for coming on VSAM 1040, speaking with us today about bankruptcy. If you’d like to introduce yourself and talk a little bit about what you do.
John Wonais:
Sure, and thank you for having me.
Speaker 1:
Yeah, of course.
John Wonais:
My name is John Wonais. I’m the founder of Wonais Law, where we practice bankruptcy law. We serve the Chicagoland area. I have seven years of experience in … I actually just came from one of the biggest bankruptcy firms in Chicago, where I handled thousands of cases, chapter thirteens and chapter sevens, and I decided to go off on my own to give bankruptcy clients a more personalized experience where I would be handling their case from start to finish and they can contact me 24/7, and so far, it’s been a great experience for me.
Speaker 1:
All right.
Taylor Kosla:
My name is Taylor Kosla. I’m a partner at Mike Agruss Law. We handle consumer rights and personal injury cases.
Mike Agruss:
Hi. My name’s Mike Agruss, and Taylor and I are partners at Mike Agruss Law. As Taylor mentioned, we do consumer rights and personal injury.
Speaker 1:
Okay. [foreign language 00:01:08]. All right, so I guess we can get into our Q&A session today. First question is, what does it mean to file for chapter seven bankruptcy?
John Wonais:
Well, first of all, most people call me and have bankruptcy questions. They initially want to do a chapter seven case. A chapter seven case is the case where you’re in it for four to six months and you’re not repaying any creditors back. At the end of the case, you get a discharge of most of your debt. The problem with the chapter seven case is it’s also called the liquidation chapter, which means if you have assets that are not exempt, the trustee can come and take those assets, liquidate them, sell them, and use the proceeds to pay off creditors.
John Wonais:
The other part of a chapter seven case is there is a requirement that you make a certain amount of money. If you are over a certain threshold, it’s called the means test, you don’t qualify for a chapter seven case. Other than that, a chapter seven case will help with a lot of types of debts, certainly credit card debt, payday loans, medical bills, unsecured debt. Unsecured debt is debt that’s not tied to property, so something not like a car or a house.
Taylor Kosla:
You mentioned assets that are exempt and not exempt. Can you give us some examples of assets that are and are not exempt?
John Wonais:
Sure. The easy one is having a bank account with money in it. If you have the bank account with $4,000 or more, we cannot exempt all that out. Let’s say you have a bank account with $10,000. The trustee can come in and take $6,000 of that and use it to pay off creditors. Another example is a house. If a house is fully owned, there’s no mortgage, no lien on it, trustee can come in and sell that house and use the proceeds to pay off creditors.
Speaker 1:
Can you explain what a trustee is, so I can get-
John Wonais:
Oh, of course. I apologize for that.
Taylor Kosla:
No, you’re good.
John Wonais:
The trustee is like the middle man in the case. They are the ones who will look at a case, see if there is anything to take and pay off creditors. They don’t necessarily represent the creditors.
Speaker 1:
Okay.
John Wonais:
That’s why I said they’re in the middle, where they will try to look for stuff to pay creditors who are active in the case.
Speaker 1:
Okay, and you were saying that accounts of $4,000 or more in a bank account is not exempt. What else were you saying that wasn’t?
John Wonais:
Assets like a house. If you own a house and there’s no lien on it so there’s equity in the house, the trustee if there’s enough equity in that house, can actually come and take the house, sell it, and then use proceeds to pay off creditors.
Speaker 1:
Okay, and then you said that usually at the end of the chapter seven bankruptcy, they’re not repaying?
John Wonais:
Yeah. Nine times out of 10, a chapter seven case is pretty straightforward, where a client is not actually paying any creditors any money.
Speaker 1:
Okay.
John Wonais:
The only time a creditor gets money in chapter seven cases is if the trustee comes in and sells something.
Speaker 1:
Okay. Got you. Yeah. [foreign language 00:04:38]. You said, I’m so sorry. I apologize. Unless the trustee comes in and sell off assets, right?
John Wonais:
Correct.
Speaker 1:
Okay. [foreign language 00:05:18]. We’re going to move on to the second question.
Mike Agruss:
Sure. Before we get on to chapter 13 bankruptcies, I think the viewers would probably want to know my understanding, although Taylor and I do consumer rights, we do a lot. Our practice and your practice probably has tons of overlap, as far as people come, they’re struggling with debt, and they want help. In a chapter seven, essentially it gives someone and opportunity to just start over, start fresh, right? A clean slate?
John Wonais:
Correct. That’s the goal of any bankruptcy, is get rid of all of the debt or most of the debt, and then once you’re out of bankruptcy, you don’t have debt anymore.
Mike Agruss:
Got it. Then I think it’d also be important to explain to the viewers. I think a lot of people, and I’ve learned this over the years, they almost use bankruptcy as a knee jerk reaction, where it’s like, “Oh, I’ll just file bankruptcy,” and I think some of the things you were touching on, which would be helpful to talk about is, you actually have to qualify.
John Wonais:
Correct.
Mike Agruss:
In other words, people, “Oh, I’ve got a $10,000 medical bill. I’m going to file bankruptcy.” Right? You can’t always do it, right?
John Wonais:
Correct.
Mike Agruss:
Then also, not all debt, like my student loans or taxes or things like that. Could you explain that to the viewers, as well?
John Wonais:
Right. That’s why I started off by saying everyone calls me saying, “I want to file a chapter seven.”
Mike Agruss:
Totally.
John Wonais:
There are obvious restrictions to that. Someone making $200,000-$300,000 a year can’t file a chapter seven because that just wouldn’t be fair. Their creditors should get paid. Back to your question again.
Mike Agruss:
You have to qualify, right?
John Wonais:
Correct.
Mike Agruss:
It’s not just something where you can say, “Hey, this is what I want to do. I’ve got a lot of debt.”
John Wonais:
Right.
Mike Agruss:
Okay.
John Wonais:
Exactly, and like you said, certain debts like student loans, which may change in the future, cannot be wiped out. A lot of debt owed to the government cannot be wiped out, so there are some types of debt that a chapter seven cannot actually wipe out.
Mike Agruss:
Okay.
Taylor Kosla:
Those are exempt from bankruptcy.
John Wonais:
Correct.
Speaker 1:
What are some of the qualifications or some of the cases where you would recommend them to file a chapter seven?
John Wonais:
If someone has a lot of credit card debt.
Speaker 1:
Okay.
John Wonais:
If someone has a lot of medical bills, payday loans. Never take out a payday loan. Unfortunately, people fall on hard times and take out payday loans. Those are the three most common types of debt I see that make a person really want to file bankruptcy and where it’s really beneficial to do so.
Speaker 1:
Okay. Let me just go ahead and translate a little bit here. [foreign language 00:07:53]. Yeah. All right.
Mike Agruss:
Let’s move on then to chapter thirteens. Can you tell us a little bit about a 13 and when someone would qualify and how is that different than a seven?
John Wonais:
Sure. Unlike a chapter seven where like I said, you’re not paying creditors back every month, 13, you’re in it for three to five years and you’re repaying creditors back every single month. How much you’re paying every month depends on how much money you’re making, how much debt you have to pay back, what you’re trying to accomplish. The two main reasons I see people file a chapter 13 are people who have a car repossessed and want to keep their cars because in chapter 13, you get to keep all your assets, unlike the chapter seven case, and you can get your car back and you have to pay back that car inside the case. Another reason is people who are about to lose their house. If the bank comes in and is trying to foreclose on their property because they are behind on their mortgage arrears, they can put those mortgage arrears inside the bankruptcy case, inside the chapter 13 case, and you’re going to repay those arrears while you’re in the case and save your house.
Mike Agruss:
Got it. It’s almost like a debt settlement or debt consolidation, where maybe you have $200,000 in debt and you’re basically paying back the creditors lesser amounts spread over three to five years.
John Wonais:
Correct.
Mike Agruss:
Okay.
Taylor Kosla:
Then at the end of those three to five years, again, the consumer should be debt free at that point.
John Wonais:
Exactly. That’s always the goal. Another thing is, unlike the chapter seven case when you can’t wipe out certain types of debt or even student loans, in a 13, you can include that type of debt. I also see a lot of cases where people have a lot of parking ticket debt. Unfortunately, in the city of Chicago, people can rack up a lot of parking ticket debt and the city will actually come take your car. In a 13 case, you can repay that parking ticket debt inside the case, get your car back, and then once you’re out of bankruptcy, you won’t have any debt anymore.
Speaker 1:
Okay, so just to summarize a little bit here, usually for chapter 13, you said they’re in it from three to five years, basically debt consolidation where you can include student loan, parking ticket, car repossession, or behind on their mortgage.
John Wonais:
Correct. Let me backtrack.
Speaker 1:
Yeah?
John Wonais:
You can’t discharge student loans in chapter 13.
Speaker 1:
Okay.
John Wonais:
You can repay some of it back in the 13 case.
Speaker 1:
Okay. Repay some of it back. I got you. All right. [foreign language 00:10:59]. Yeah. All right.
Taylor Kosla:
My next question for you is, how can filing for bankruptcy help a consumer rebuild their credit?
John Wonais:
When you initially file for bankruptcy, your credit might take a little bit of a hit. Like we’ve been saying, once you’re out of bankruptcy, you’re going to get a fresh start. Once you’re out of bankruptcy, your credit score itself will start to increase. Normally, I see within a year, at least. While you’re actually in bankruptcy, you can also do things to rebuild your credit. You can get a secured credit card. You can get a car. Just make sure. I tell my clients to just make sure that if they do get a credit card, that they’re paying the full amount every month, not just the minimum. You don’t want to get into a situation where five years down the road, you want to file bankruptcy again because you’re unable to make those full payments and you’re only making those minimum payments again.
Taylor Kosla:
Then how does it that just filing for bankruptcy increases the credit? Is there just an understanding that when someone files for bankruptcy, that the debts are going to be discharged, a lot of them, on the credit report?
John Wonais:
Yeah. After the case is over with and the discharge order is entered, that’s when they should start, the creditors start reporting to the credit bureaus that debt is gone.
Taylor Kosla:
Okay. Thank you.
Speaker 1:
Okay, so just to recap here, once you file for bankruptcy, your credit will take an initial hit. You said that once all the filings are done, they can start rebuilding their credit by getting a secured credit card and paying it in full. Are there any other ways to start rebuilding their credit?
John Wonais:
Yeah. I think Taylor might have some suggestions, too, on rebuilding credit.
Taylor Kosla:
Yes. You brought up a good point. After filing, you don’t want to incur more debt, but if you can open up a credit card or some sort of line of credit, get a car loan, or are paying it in full. You’re just taking proactive steps to build credit while the bankruptcy is pending.
Speaker 1:
Okay, and do you know the duration of how long it takes to rebuild your credit to a decent level?
John Wonais:
Every single case is different.
Speaker 1:
Okay.
Taylor Kosla:
That’s a $1,000,000 question.
John Wonais:
Yeah. Nobody knows. The credit bureaus don’t even know that answer.
Speaker 1:
Okay. Yeah. [foreign language 00:14:12]. My question is, how does filing for bankruptcy help a consumer who is harassed by debt collectors?
John Wonais:
Well, the second you file a bankruptcy case, any action by a creditor to collect on debt has to stop immediately. It’s called the “Automatic Stay.” Therefore, if someone files bankruptcy today, a creditor cannot call that person the next day or even the day of.
Speaker 1:
Okay.
John Wonais:
That creditor cannot take any action, including repossessing a vehicle or suspending a license. Any act to collect on the debt is prohibited.
Speaker 1:
Okay. How would they inform them?
John Wonais:
Good question. Once you file bankruptcy case, they will send notice. The bankruptcy courts will send notice to all creditors, but that might take some time. If there is a creditor who is suing you and is about to garnish your wages or about to repossess your car, you’d want to notify them immediately and that’s something I do for my clients if they want me to. I will call them up, send them over the notice of filing immediately so they know.
Speaker 1:
Okay. [foreign language 00:16:17]. As soon as you file bankruptcy, they don’t have the right to give you calls, repossess your car.
John Wonais:
Correct. Correct.
Speaker 1:
Okay. Got you. [foreign language 00:17:09].
Mike Agruss:
What should a consumer do if a creditor or debt collector continues to contact them after you file bankruptcy on their behalf?
John Wonais:
If it’s right after the case is filed, they can’t do it, right? If you go to the judge and you file a motion to sanction them, the judge isn’t likely to sanction them. What should happen is, they should tell them immediately, “Listen. I filed bankruptcy. Here’s my case number. Here’s my attorney’s information. Don’t call me again.” Then if it happens a second time, that’s when you can go to court and sanction them and ask the judge to actually penalize them and make them pay your client, the debtor, money for doing that.
Mike Agruss:
Does that happen often in your practice, where your clients are still getting harassed by creditors and collectors after a bankruptcy is filed?
John Wonais:
Initially, yes. Right after the case is filed, yes. They will still be getting those calls, but from my experience, once they do inform them that they are in a bankruptcy case and give them the case number, it stops. I had situations where it doesn’t stop, and that’s when we go in front of the judge and tell the judge about it.
Taylor Kosla:
Is there a gap between the filing and when the creditors are put on notice? Is that partially why?
John Wonais:
Yeah, like I said, because the bankruptcy courts actually send notice out via mail, which can take up to five to seven days for them to actually receive it. If there is, like I said, something imminent happening where a creditor is about to do something to you, that’s when I say, “All right, we’ve got to get them notice right away.”
Taylor Kosla:
Okay.
John Wonais:
Okay.
Speaker 1:
Yeah. [foreign language 00:18:45]. All right.
Taylor Kosla:
How much does it cost for a consumer to file for bankruptcy?
John Wonais:
It really depends on the type of bankruptcy they’re filing, but for my firm, we typically do $350 to file a case, which covers court costs. After the case is filed, the attorney fees get paid, though. In a chapter 13 case, the standard fee in this district is $4,500, and that’s paid throughout the life of the 13 case. The chapter seven case, my fees range from $1,500 to $2,000, and I’m very flexible with my clients on when they pay it back, how often they want to pay it, and how much.
Taylor Kosla:
Is it standard, the $1,500 to $2,000?
John Wonais:
It’s standard.
Speaker 1:
All right, so you’re saying to file either a chapter seven or a chapter 13, the initial fee is $350, and then after that, a chapter seven, lawyer fees are about $1,500 to $2,000. Chapter 13 is about $4,500, and you’re saying it’s paid throughout the course of the filing process.
John Wonais:
Correct.
Speaker 1:
Yeah. [foreign language 00:21:01]. Okay.
Taylor Kosla:
It’s time for a break.
Speaker 1:
Okay. Yeah. [foreign language 00:21:48].
Speaker 5:
[foreign language 00:21:52].
Taylor Kosla:
My name is Taylor Kosla. I’m a partner at Mike Agruss Law. I started in August 2017, and after three years of practicing, I was named partner in February 2021. Personal injury clients come to our office in a time of need and sometimes desperation. Something devastating happened to them. We can provide clients with peace of mind by ensuring them that we are here to help. We are in this together, and we will take care of them. We are a fast acting law firm. We are responsive to our clients and maintain open lines of communication. Our sense of urgency is part of what makes us different from other law firms. We put people first, and we make sure we get our clients the compensation they deserve.
Taylor Kosla:
Our consumer rights practice is a national practice, so we can help people from the east coast to the west coast. There are laws in place to protect consumers, and not everyone knows these rights exist. Certainly, not everyone knows or even believes that our clients never pay us a penny. Several consumer rights statutes contain a fee shift provision which means that if we prevail, the defendant must pay our attorneys’ fees and costs. Our consumer clients appreciate the work that we do, and that makes my job rewarding.
Taylor Kosla:
What I like most about plaintiffs’ work is getting to know our clients, understanding the facts of what happened, and how the occurrence affected our client. As an attorney, we are given a set of facts and it is our job to create a timeline and story of events. We must put ourselves in the shoes of our clients, whether that be at the scene of the accident or months after at home, learning how to adapt to a disability. Having had a family member sustain a life altering injury, I can relate with my clients and their family members, and this fuels my passion for what we do, putting people first.
Taylor Kosla:
My favorite animal is a dog. The app I use most is Apple News. It’s hard to say what my favorite food is, because it depends on what I have a taste for, but generally, I like steak and seafood. I love to travel, and Florida is one of my favorite places to escape to, because you can go to the beach, play golf, and eat at great restaurants. I like my weekends like I like my weekdays, which is busy. I like being outside, whether that’s going for a run along the lake, golfing, or skiing. I spend time with family members and friends. I love having people over to cook for and to try new recipes with.
Taylor Kosla:
Since I was born, I knew I would be a lawyer or doctor. I learned early on that I did not care for science, which made it easy for me to pursue a career in the law. My job is perfect for someone with a passion for a law and medicine, because these two areas coincide with personal injury and medical malpractice cases. I enjoy reading John Grisham books and have acquired quite a collection over the years. I’m always up for watching a new movie, but generally, I enjoy the classics like Goodfellas and Father of the Bride.
Taylor Kosla:
At Mike Agruss Law, we are a hardworking team of people who are determined to maximize results for our clients. Each member of our firm plays an important role in the success of our practice. Our focus is to ensure that we are available to communicate with our clients and to ensure they have the representation they need. We’re dedicated to putting the needs of our client first above all.
Speaker 1:
[foreign language 00:26:59]. Can you tell me about credit report issues that you see most common with your clients?
John Wonais:
Sure. A lot of issues I see actually occur after the case is over with. I see a lot of times that the debt is discharged, but the creditors are not reporting that to the credit bureaus. Then sometimes I see before a case is filed, I see a lot of accounts that should be marked closed, but are still marked as open. I’m sure you guys have a lot of issues that you see, too.
Taylor Kosla:
That’s where we come into play. We help consumers disputing that inaccurate information on their credit report and we send dispute letters to the bureaus. If the inaccuracies aren’t fixed, if they’re not reporting that discharge or account status properly, we file suit against the bureaus and whoever’s furnishing that information. We’re able to do that under the Fair Credit Reporting Act, which is federal law. It applies to everyone. The great part about that law is, there’s a fee shift provision so the clients don’t owe us a penny to represent them and we always get their credit report corrected and accurate.
John Wonais:
How often do you see them fix that issue right away?
Taylor Kosla:
With an initial dispute, I’d say 25% of the time, tops.
Mike Agruss:
Yeah, I think that might be generous, but no matter how many times they fix it or not, what’s great about it is the moment we sue then. Then it gets fixed.
Taylor Kosla:
Yes.
Mike Agruss:
We always, and we don’t do bankruptcy, but we have tons of overlap, like I said at the beginning with our clients.
John Wonais:
Right. It’s either fixed or you get paid. Your clients get paid, right?
Mike Agruss:
It’s interesting. It’s either fixed or it’s fixed after we sue.
John Wonais:
Okay.
Mike Agruss:
No matter what, it gets fixed.
John Wonais:
Okay.
Mike Agruss:
This is something where, when we’re talking to people who have been involved in bankruptcy, we always tell them. Once the discharge is done and you’ve got your clean slate, a lot of times, people think, “Oh, great. This is all over,” and I always say, “Hey, that’s just the beginning.”
John Wonais:
Right.
Mike Agruss:
Pull your credit report, because the idea is to get a clean slate and then start off increasing your credit score and making sure it’s accurate, setting yourself up for better credit in the future.
John Wonais:
Right.
Mike Agruss:
We see that all the time, just like what you described, where debt’s discharged in bankruptcy and it’s not updated on someone’s credit report. It may seem minor, but everything’s important on a credit report.
John Wonais:
A lot of times, the companies change.
Mike Agruss:
Yeah.
John Wonais:
These collection agencies change left and right. Sometimes, the original creditor is not the same creditor at the end of the case. Is that what you see happening sometimes, and that’s why they didn’t mark it as being discharged debt?
Mike Agruss:
Yep. We’ll see that. I see that often times with judgements, which I find really interesting because you’ll have a high volume firm that’s just suing, getting judgements right and left, and then years down the road, they might not be in business. For example, there was someone who just reached out to us. I lived and practiced out in California, and there was a big collection firm out there called [Mann Brakken 00:30:43]. I don’t think it exists anymore, but if they sued and got a judgment and they’re on your credit report, how do you go about fixing that?
John Wonais:
Right.
Mike Agruss:
Yeah, I think that happens, as well, where names change and you can’t figure out who’s got the judgment. I always tell people in bankruptcies, “Once you get that discharge, look at your credit report and go line by line, because every single entry is important.
John Wonais:
Right.
Speaker 1:
All right, so just to summarize, one of the most common things you see about credit report issues is that debtors or collectors are not reporting to the credit bureau. That’s where you guys come in. Do you initially ask them to correct the report and then if they don’t, then we’re going to court and suing?
Taylor Kosla:
Yes. Under the Fair Credit Reporting Act, a consumer actually has to initiate a dispute, so they need to tell the bureaus, “This is inaccurate, and this is why.”
Speaker 1:
Okay.
Taylor Kosla:
Then the bureaus conduct an investigation, and it’s really the results of that investigation determines whether there’s going to be a lawsuit or not, because if they continue to report the inaccurate information, then there’s a case and then we can file suit.
Speaker 1:
Okay. Sounds good. [foreign language 00:31:55]. All right.
Mike Agruss:
If a consumer is considering bankruptcy and considering contacting a bankruptcy attorney, are there any steps they should take beforehand, before they reach out to you, whether it’s a last ditch effort before contacting you, or if they’ve decided, “Hey, I think this is something that I do want to do”? What steps should they take before they contact you?
John Wonais:
Sure. Well, I would first say they should pull a credit report. Get an understanding of what debt they have, how much debt they have, what’s showing up on a credit report. There’s a lot of free websites that provide free credit reports out there. If the debt is minimal, if they don’t have a ton of debt, try contacting the creditor directly. Say, “Hey, I can’t afford to pay you this much. Will you settle for this?” If they won’t settle, then contact a bankruptcy attorney. Contact me, and we’ll go through all the options.
Mike Agruss:
Is there a website you like in particular for getting credit reports?
John Wonais:
I think Taylor has a few. Don’t you?
Taylor Kosla:
Yeah. We recommend clients use annualcreditreport.com. Under federal law, you are entitled to a free copy of your credit report every 12 months, but because of the pandemic, I know they were offering it more frequently. Do you recall how often you could get it for free?
Mike Agruss:
You know. It’s certainly more often than once a year. I can’t remember exactly how often you can pull it, but I know that annual credit report is allowing people to pull their credit more often than once a year. Even so, I’m sure you have access to programs where you can pull credit. We do the same thing for people. It’s important to know that there’s a free site you can go to, but even if you have an issue, bankruptcy attorneys, consumer right attorneys can also pull credit.
Speaker 1:
Okay. [foreign language 00:35:00]. All right.
Taylor Kosla:
For consumers who are falling behind on their bills, maybe have significant medical or credit card debt, at what point should they really consider filing for bankruptcy?
John Wonais:
Well, they should definitely consider filing it if they’re getting sued for that debt. If someone’s trying to sue them for that type of debt, they should definitely consider filing bankruptcy, because once you file bankruptcy, they have to stop that lawsuit and drop it. If they’re behind on a car note like I discussed earlier, and they’re going to come take their car, should file bankruptcy and stop that from happening.
Taylor Kosla:
Is your thought, as far as a lawsuit, to file bankruptcy before there’s a judgment against them, the garnishment starts?
John Wonais:
Yeah. Ideally, it would be right when they file a lawsuit, but even if there is a judgment, as long as they didn’t go through the process of garnishing their wages yet, that’s fine. Even if they are garnishing their wages, they can file bankruptcy and stop that.
Taylor Kosla:
Get that to stop.
Speaker 1:
In summary, you said when should a customer consider filing for bankruptcy. You’re saying when they’re getting sued for that debt or they’re garnishing wages, repossessing cars, and when they’re taking action.
John Wonais:
Even if they’re just constantly getting harassing calls from creditors and they just can’t take it anymore, if their license is suspended for parking tickets or red light tickets, they should consider filing bankruptcy. If their tax refunds are getting taken from creditors, they should consider filing bankruptcy.
Speaker 1:
Okay, sounds good. Yeah. [foreign language 00:37:36]. I apologize. [foreign language 00:38:18]. Does a consumer need to meet you in person or go to court for his or her bankruptcy case?
John Wonais:
I started my practice during the pandemic, actually. I was initially meeting clients in person, and after about a few meetings, I realized I should just do this over Zoom. It’s safer, and my clients actually like it a lot more. Now I’ve been doing everything virtually, unless my client wants to meet me in person. I can go to the office and meet them in person. As far as court goes, they’re still doing everything over Zoom, so there are no in-person court hearings yet. That might change soon. I’ve found its been very easy for not only myself, but also my clients.
Speaker 1:
Is it standard practice these days for bankruptcy lawyers to contact most of their clients over Zoom or phone call?
John Wonais:
Yeah, it is. I’ve found it strange. I heard the other day, some firms are actually not doing Zoom. They’ll just do everything over the phone, but personally, myself, I like to actually meet my client over Zoom, face to face, some personalized touch to that, to see who you’re dealing with. There’s a trust factor, too, that my clients trust me more if they actually can see me.
Speaker 1:
Okay.
Taylor Kosla:
Yeah.
Mike Agruss:
Are they also doing, you meet with clients over Zoom, court proceedings are over Zoom. I know a little bit about bankruptcy where in a chapter seven, there’s the 341 hearing where creditor is meeting. Is everything, start to finish, over Zoom?
John Wonais:
Everything is over Zoom now.
Mike Agruss:
Okay. That’s got to be much more efficient.
John Wonais:
Well, I was waiting two hours for a 341 meeting the other day. The problem is, some of these trustees are a little older and not tech savvy, so I think they were having issues with connecting people to the Zoom. I’d still take that over driving to the courthouse to have these meetings, which could take an hour to even get there.
Mike Agruss:
Yeah. Do you think it will eventually go back to in-person?
John Wonais:
I don’t think the trustee meetings will. I really don’t.
Mike Agruss:
Okay.
John Wonais:
I know a lot of bankruptcy judges really like the Zoom hearings, too. Now, for other areas of the law when you have actual trials, I think obviously those will go back to in-person, if they haven’t already.
Mike Agruss:
Right. I think, and I’m sure there’s plenty of times in bankruptcies where things are contested, but I feel like in an uncontested case, and things are pretty straightforward for a bankruptcy case, to me it just seems much more efficient. In our practice too, state court personal injury cases or when we’re in federal court on a consumer rights case, if it’s just routine and it’s a status conference, a case management, and nothing’s contested, it saves so much time and money to just do things over Zoom.
John Wonais:
Exactly. Your honor, can I get a date? Thank you.
Mike Agruss:
Yeah.
John Wonais:
That’s it.
Mike Agruss:
Exactly. I lived out in LA and practiced out there from 2008-2011, and they were way ahead of the curve with court call. It was incredible because if you’re state licensed in California and you’re practicing in state court, there’s a bazillion counties to practice in. To think about having to travel to a county for a case management conference, even back in 2008, we had court call. If it was something, they wouldn’t even have contested motions over the phone. The idea is, you call in, you put it on hold and put it on mute. You can go do other work. When your case is called, you just handle it over the phone.
John Wonais:
Right.
Mike Agruss:
I think it’s so much more efficient.
John Wonais:
I agree.
Taylor Kosla:
Absolutely.
Mike Agruss:
I’m a huge fan of it.
Speaker 1:
I just have a couple of questions regarding Zoom and phone calls. Throughout the entire process, about how much time would they have to spend meeting with you over Zoom? How long do these court meetings also take up?
John Wonais:
Right. In terms of coming in to file bankruptcy with me, filling out the paperwork and doing everything takes about an hour.
Speaker 1:
Okay.
John Wonais:
Then in terms of court, it really depends. Like I said, I was waiting two hours the other day for a court hearing. The actual meeting itself lasted five minutes.
Speaker 1:
Okay.
John Wonais:
As long as there’s nothing contested, there shouldn’t be any other court hearings.
Speaker 1:
Okay, sounds good. Let me just translate here. Yeah. [foreign language 00:42:49]. Yeah. All right.
Mike Agruss:
While we’re talking about clients meeting with you over Zoom, once they’ve scheduled that meeting, the initial consultation, and if you could share some advice to the viewers watching the show. What do you recommend that people do to prepare for that first meeting with you? What documents should they bring? You had mentioned before pulling a credit report. What else can they do to make that consultation as efficient as possible?
John Wonais:
Right. To file bankruptcy, you need copies of your pay stubs and your tax returns. In terms of the credit report, I pull credit reports for all of my clients. That first meeting with me, to make it most efficient, if they could have their pay stubs with them for the past four months and then their tax returns for the past four years. A lot of clients have trouble getting those tax returns, especially the older ones. I can request them from the IRS, but unfortunately, the IRS takes months to actually send me those tax returns. Those are the two documents that are needed to file bankruptcy and will also make the whole meeting go by faster.
Mike Agruss:
How do you get previous tax returns? How do you order the past four years?
John Wonais:
You sign a form, a power of attorney.
Mike Agruss:
Yeah.
John Wonais:
Then you fax it, because for some reason, you can’t just email it to them. You have to fax it to the IRS.
Mike Agruss:
Okay.
John Wonais:
Then especially during tax season, you call them every week and you’re saying, “Hey, what’s going on? Did you get the power of attorney?” “Yeah, we got it, but we’re still processing it.” If you call them enough, they’ll get it to you a little sooner. When you do call them, you’re on hold for a couple of hours.
Speaker 1:
You were able to retrieve your tax returns from accounts that file your taxes, or is that something that can only be retrieved through IRS?
John Wonais:
Clients can retrieve tax returns from their accountants.
Speaker 1:
Okay.
John Wonais:
They can go directly to their accountant if they did it through an accountant. A lot of times, though, these accountants move or they’re nowhere to be found, so if you don’t have a hard copy of your own tax return, it’s hard to find.
Speaker 1:
Okay. Yeah. Let me just translate here. [foreign language 00:45:35]. All right.
Taylor Kosla:
We already touched on this a bit, but from the moment that you meet with a client and you get those pay stubs and tax returns, how long does it take to then file for bankruptcy and then for the bankruptcy to be discharged?
John Wonais:
Yeah. Once I set up that initial meeting to file the case, it takes about an hour to go through the actual bankruptcy petition, fill it out. Then I have my client sign everything and then file the case.
Taylor Kosla:
They have to? Is that an e-signature that’s required?
John Wonais:
Because of COVID, they’re accepting electronic signatures, but in the past, they didn’t accept that, which is very convenient now for everybody. I hope that doesn’t change, either. In terms of how long the bankruptcy actually lasts, a chapter seven case will last about four to six months, more towards the six month period. A chapter 13 is three to five years.
Taylor Kosla:
Great.
Speaker 1:
Three to five years, so you’re saying it’s about an hour to meet with you, file, sign. Chapter seven is about four to six months, the entire process, and then chapter 13 is about three to five years. Okay. Yeah. [foreign language 00:47:38]. All right. My question is, how has COVID impacted your practice and filing for bankruptcy in general? I know you touched base on it a little bit.
John Wonais:
Yeah. Like I said, nowadays, we do everything virtually.
Speaker 1:
Okay.
John Wonais:
That’s really how my firm has changed things. It’s worked out great so far. Everyone would have to come to the office, sign off on documents, and print stuff out. Drive to the office and everything like that took a little bit more time.
Speaker 1:
Do your clients prefer this method of Zoom and phone calls?
John Wonais:
Absolutely. Yeah.
Speaker 1:
Okay. [foreign language 00:48:43]. All right.
Mike Agruss:
While we’re talking about COVID, have bankruptcy filings gone up or down?
John Wonais:
Way down.
Mike Agruss:
Why is that?
John Wonais:
My suspicion, and I’ve talked to a lot of bankruptcy attorneys about this, is because with all these COVID restrictions, creditors aren’t actually able to collect on debt, a lot of creditors at least. For instance, if you haven’t been paying your mortgage or haven’t been paying rent, they can’t kick you out of your house. Additionally, if you’re on unemployment, creditors can’t garnish unemployment, so right now, people aren’t really feeling the pressure to do something because the creditors aren’t able to actually take action against them. Unfortunately, I think that once all this stuff is lifted, that’s going to change dramatically. I think people are all of a sudden going to be getting sued more. They’re going to face evictions. Their houses are going to go into foreclosure. There’s probably going to be a dramatic increase in bankruptcies.
Mike Agruss:
I think they keep extending the moratorium, right, on eviction and foreclosure?
John Wonais:
I can’t even keep up with it. Honestly, they keep extending it and changing things.
Mike Agruss:
Do you know now when the cutoff is?
John Wonais:
I don’t. I knew what it used to be. Now, I’m not sure.
Speaker 1:
Is that on a local or federal level, these?
Mike Agruss:
Federal and state.
Speaker 1:
Okay. It’s separate, though?
John Wonais:
Yes.
Speaker 1:
Okay.
Mike Agruss:
You can’t initiate foreclosure proceedings. You can’t evict people. There’s also unemployment and then additional stimulus money for COVID. You’re right. I feel like, in the past, when people would contact us and we would refer them out to bankruptcy attorneys, there was a massive sense of urgency. “I just got served with a garnishment notice.”
John Wonais:
Exactly.
Mike Agruss:
“I just got served with foreclosure proceedings.” They had to act immediately, where maybe some of that sense of urgency is not around anymore.
John Wonais:
Yeah. There is none. It’s going to happen, and it’s going to happen quickly once all this stuff is lifted. It’s going to be pretty bad.
Speaker 1:
Is there any advice you would give to those who are, because of COVID, putting off reviewing their debt or their credit report?
John Wonais:
I would say get ahead of the game.
Speaker 1:
Okay.
Taylor Kosla:
Do you think the courts will be backlogged once things-
John Wonais:
Oh, yeah. Courts will be backlogged.
Taylor Kosla:
It will take longer for the bankruptcy to be discharged.
John Wonais:
Yes. It’ll definitely take longer for a chapter seven case to get discharged. Yeah. I think you should just get ahead of the game now, rather than put it off and then have it hit you, just for your own peace of mind, too.
Speaker 1:
You’re saying they should probably prepare and know what’s going on with their debt and when this is due, do you recommend they file bankruptcy now or wait until all of this blows over and then come see you?
John Wonais:
Yeah, it really depends on everyone’s different situation, but I would say that if you’re racking up a lot of credit card debt or unsecured debt, you should go ahead and file and get rid of it now and start to rebuild. Get that fresh start and start to rebuild your credit sooner than later.
Speaker 1:
Okay. Yeah. [foreign language 00:52:28]. Yeah.
Mike Agruss:
As we come to a conclusion of the show, any advice you could give the viewers who are having financial issues, contemplating bankruptcy, trying to figure out what to do? What advice would you have for people?
John Wonais:
I’d say call me. You’ll get a free consultation, and I don’t push people into filing cases by any means. What I do is, I look at their totality of circumstances. I say, “Listen, you don’t have too much debt. You’re okay. Try doing this. Try.” With parking tickets, I see a lot of parking ticket issues. Try working something out with the city. They have a lot of new programs now to repay that stuff. Get on a payment plan. Don’t jump and file bankruptcy just because you have a few parking ticket debt issues. Same with credit cards. There are some debt consolidation companies. You can try and contact one of them. See what they have to offer. Yeah. That’s the advice I would give. Just talk to a bankruptcy and just see what they have to say and what advice they give you.
Mike Agruss:
Got it. I think that’s important that we haven’t talked about, is you do offer free consultations.
John Wonais:
Of course.
Mike Agruss:
Okay. I’m sure people contact you all the time saying, “Hey. I’ve got a messy financial situation. Here’s all the things going on.” Just like you said, they may be a candidate for bankruptcy or they may be a candidate for some alternative.
John Wonais:
Right.
Mike Agruss:
Okay. Fair enough.
Speaker 1:
Even if they don’t proceed or file bankruptcy with you, is it still a free consultation for them?
John Wonais:
Of course. Of course.
Speaker 1:
Okay.
John Wonais:
No fees. Anyone can call me, and I’ll give them a consultation.
Speaker 1:
Okay. Sounds good. Sounds like a sweet deal. Let me just translate here real quick, and then we’ll wrap up. [foreign language 00:54:59]. Thank you for coming on the show and speaking with us today about bankruptcy. Appreciate having you here, and again, it’s very nice to see you, Mike and Taylor. It’s been great talking to you guys.
John Wonais:
Yes. Thanks for having us.
Taylor Kosla:
Thank you.
Mike Agruss:
Yes. Thanks for having us on.
