Terms & Conditions

DATE LAST MODIFIED: October 19, 2006

This Terms of Use Agreement (this "Agreement"), which is a legal agreement between you ("you") and Colonel Rico Holdings, LLC, d/b/a "Foreclosure Fighter" ("FF"), shall govern your use of and access to FF's Web site located at www.foreclosure-fighter.com (the "Web site") and all services provided by FF as described therein (the "Services"). By checking the box or clicking the "I Agree" button at the end of the this Agreement, and by accessing and/or using the Web site or Services thereafter, you (x) accept this Agreement and agree to be bound by each of its terms, and (y) represent and warrant to FF that (i) you have the authority to enter into this Agreement, (ii) this Agreement is binding and enforceable against you, and (iii) you have read and understand FF's Privacy Policy (the "Privacy Policy"), the terms of which are posted at the Web site and incorporated herein by reference, and agree to abide by the Privacy Policy. If you do not agree with any of the terms contained herein, you should click the "I do not Agree" button at the end of this Agreement and immediately cease any and all activities on the Web site and/or use of any Services.

Please read this Agreement carefully. Even if you fail to accept this Agreement as described above, by accessing the Web site and any pages thereof, you agree to be bound by the terms and conditions below. If you do not agree to these terms and conditions or anything contained in this Agreement, do not access or otherwise use the Web site.

CHANGES TO SERVICES, AGREEMENT AND/OR WEB SITE

FF may amend any part of this Agreement at any time, and the amended terms will be effective 10 days after initial posting at the Web site. In addition, FF may, without prior notice, add, delete or modify some or all of the Services and/or content available on the Web site at any time in its sole discretion. Further, FF may discontinue disseminating any portion of information or category of information, may change or eliminate any transmission method and may change transmission speeds or other signal characteristics. IF ANY OF THESE RULES OR ANY FUTURE CHANGES ARE UNACCEPTABLE TO YOU, YOU SHOULD IMMEDIATELY DISCONTINUE USE OF THE SERVICES AND WEB SITE. YOUR CONTINUED USE OF THE SERVICES OR WEB SITE NOW, OR FOLLOWING THE POSTING OF NOTICE OF ANY CHANGES IN THIS AGREEMENT, WILL INDICATE ACCEPTANCE BY YOU OF SUCH RULES, CHANGES AND/OR MODIFICATIONS. You should review this Agreement periodically to ensure you become aware of changes which are made to this Agreement by FF from time to time.

SERVICES AND PARTIES

The Services are described within various pages of the Web site. You should review these pages to gain a better understanding of the Services and the goals behind the Web site. At a general level, FF collects information submitted by you at various portions of the Web site (a "Submission"), and forwards this information, depending on the request submitted, to mortgage brokers, debt workout specialists, bankruptcy attorneys, web sites which serve as marketing vehicles for bankruptcy attorneys and/or other third parties which have agreed to work with customers making requests submitted to the Web site (collectively, "Service Providers"). Upon receipt of your information, one or more Service Providers will likely contact you via telephone or e-mail to assess your needs.

You hereby represent that all of the information you have provided in your Submission, or, as applicable, all of the information you submit to FF within a Submission at any point in the future, is and will be true and complete in all respects. You hereby authorize FF to provide all information contained within a Submission, including any information gathered by way of follow up with you following a Submission, to an unlimited number of Service Providers. You acknowledge and understand that Service Providers may retain a Submission form and all information set forth therein, regardless of whether or not you or they elect to work with one another. FF is not itself a Service Provider, and does not make decisions in connection with loans, legal representation, counseling decisions or in any other regard. FF does not endorse or recommend the products of any particular Service Provider. FF is not your agent, nor is FF an agent for any of the Service Providers. FF's services are administrative only. You should rely on your own judgment in deciding whether or not a Service Provider suits your needs, goals and financial means. Each applicable Service Provider is solely responsible for providing its services to you, and you agree that FF shall not be liable for any damages or costs of any type arising out of or in any way connected with your use of such services.

FF and/or participating Service Providers expressly reserve the right to discontinue, suspend or terminate the offering of their Services at any time. FF does not guarantee acceptance into any particular program or specific terms or conditions with any participating Service Provider; approval standards are established and maintained solely by individual Service Providers. Likewise, FF does not guarantee that the terms offered and made available by participating Service Providers are the best terms available in the market. Unless expressly stated in writing, nothing contained herein shall constitute an offer or promise for any type of commitment.

FF does not charge you a fee to use the Services or access the Web site. FF is paid a fee by participating Service Providers for the services provided; it being understood that FF does not share in any fees which may be earned by a Service Provider in working with you or any other individual. Your use of the Web site and/or the Services constitutes your acknowledgment of, and agreement with, this compensation arrangement.

By clicking on the "I Agree" button or otherwise making any Submission, regardless of which page on the Web site such Submission was made, you understand and agree that you are submitting an inquiry to FF which will be forwarded to a Service Provider. Each Submission shall be deemed to constitute your electronic signature, and as such you are extending an express invitation to the Service Providers to contact you by telephone and/or e-mail at the numbers and/or addresses you have provided so they may assist you with your transaction, and you hereby consent to any such calls and e-mails even if your phone number is on any Do Not Call list or your e-mail address is listed on any restricted access list. In addition, to the extent you click "Submit" on any page in the Web site, you hereby agree and acknowledge that a FF representative may contact you by telephone or e-mail to assess your needs.

SUBMISSIONS

By making a Submission, you hereby understand and agree that you have established a business relationship between you and FF, which is the owner of the Web site. As such, you agree that FF may contact you using information you provided with information, surveys and offers of services available through FF, the Web site or any other web site owned or operated by FF or an affiliate of FF from time to time. You hereby consent to any such communication, phone calls or e-mails even if your phone number is on any Do Not Call list or if your e-mail is on any other restricted access list. In the event you wish to opt out of receiving any such communications from FF, please send an e-mail to info@foreclosure-fighter.com to be removed from this list.

COPYRIGHT AND TRADEMARK NOTICES

All contents of the Web site are: Copyright © 2006 Estreet IP, LLC and/or its licensors (as applicable). All rights reserved. "Foreclosure Fighter" is a service mark of Estreet IP, LLC. Other product and company names mentioned herein or within the Web site, including the names of participating Service Providers, may be the trademarks or service marks of their respective owners. To this end, you may not, without the prior, written consent of FF or the applicable copyright holder, modify, publish, transmit, participate in the transfer or sale of, reproduce, create new works from, distribute, perform, display, or in any way exploit, any of the content posted at the Web site or otherwise owned by FF or any of its licensors. This Agreement shall not be deemed to transfer from FF to you (i) any of FF's or its licensors' intellectual property (including, without limitation, patents, trademarks, service marks, trade names, copyrights and licenses), technology, software programs or any related assets owned by FF, or (ii) any rights to use or license any of the foregoing except as explicitly set forth in this Agreement.

DISCLAIMERS AND LIMITATIONS

FF intends that the information contained in the Web site be accurate and reliable; however, errors sometimes occur. In addition, changes and improvements to the information provided herein or on the Web site may be made by FF at any time. THE WEB SITE AND THE INFORMATION, SOFTWARE, PRODUCTS AND SERVICES ASSOCIATED WITH IT ARE PROVIDED "AS IS, WHERE IS AND AS AVAILABLE." FF AND/OR ITS SUPPLIERS OR PARTICIPATING SERVICE PROVIDERS DISCLAIM ANY WARRANTY OF ANY KIND, WHETHER EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER RELATING TO THE WEB SITE AND ANY INFORMATION, SOFTWARE, PRODUCTS AND SERVICES PROVIDED WITHIN THE WEB SITE, INCLUDING WITHOUT LIMITATION (I) THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND NONINFRINGEMENT, AND (II) AS TO THE RESULTS THAT MAY BE OBTAINED BY USE OF THE WEB SITE OR ANY OF FF'S SERVICES. IN ADDITION, FF MAKES NO WARRANTIES REGARDING ANY SERVICE PROVIDER OR ANY SERVICES PROVIDED BY ANY SERVICE PROVIDER. USE OF THE WEB SITE AND/OR FF'S SERVICES IS AT YOUR OWN RISK. FF AND/OR ITS SUPPLIERS OR PARTICIPATING SERVICE PROVIDERS ARE NOT LIABLE FOR ANY INDIRECT, PUNITIVE, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OR OTHER INJURY ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE USE OF THE WEB SITE AND/OR FF'S SERVICES OR WITH THE DELAY OR INABILITY TO USE THE WEB SITE, OR FOR ANY INFORMATION, SOFTWARE, PRODUCTS AND SERVICES OBTAINED THROUGH THE WEB SITE, OR OTHERWISE ARISING OUT OF THE USE OF THE WEB SITE, WHETHER RESULTING IN WHOLE OR IN PART, FROM BREACH OF CONTRACT, TORTIOUS BEHAVIOR, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, EVEN IF FF AND/OR ITS SUPPLIERS HAD BEEN ADVISED OF THE POSSIBILITY OF DAMAGES. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTIES, SO THE ABOVE EXCLUSION MAY NOT APPLY TO YOU. IN ALL EVENTS, THE AGGREGATE LIABILITY OF FF FOR ANY REASON AND UPON ANY CAUSE OF ACTION, WHETHER IN CONTRACT, TORT OR OTHERWISE, SHALL NOT EXCEED THE AMOUNT OF FEES PAID BY A SERVICE PROVIDER TO FF ON ACCOUNT OF YOUR SUBMISSION.

UNAVAILABILITY OF SERVICE OR WEB SITE

You are responsible, at your sole cost and expense, for providing all equipment necessary to access the Internet, the Web site and/or the Services. While it is FF's objective to make the Web site accessible 24 hours per day, 7 days per week, the Web site may be unavailable from time to time for any reason including, without limitation, routine maintenance. You understand and acknowledge that due to circumstances both within and outside of the control of FF, access to the Web site and/or Services may be interrupted, suspended or terminated from time to time. YOU AGREE THAT FF SHALL NOT BE LIABLE FOR ANY DAMAGES ARISING FROM ANY SUCH INTERRUPTION, SUSPENSION OR TERMINATION OF THE WEB SITE AND/OR SERVICE AND THAT YOU SHALL PUT IN PLACE CONTINGENCY PLANS TO ACCOUNT FOR SUCH PERIODIC INTERRUPTIONS OR SUSPENSIONS OF THE WEB SITE AND/OR SERVICE.

INDEMNITY

As a condition of use of the Web site and/or the Services, you agree to indemnify FF and its affiliates and participating Service Providers from and against any and all liabilities, expenses (including attorneys' fees) and damages arising out of claims resulting from your use of the Web site or any of the Services, including without limitation any claims alleging facts that if true would constitute a breach by you of this Agreement.

LINKS TO THIRD PARTIES

The Web site may contain links to web sites maintained by third parties. Such links are provided for your convenience and reference only. FF does not operate or control in any respect any information, software, products or services available on such web sites. FF's inclusion of a link to a web site does not imply any endorsement of those services or the web site, its contents or its sponsoring organization.

ERRORS AND DELAYS

FF is not responsible for any errors or delays in responding to a Submission, including, without limitation, those caused by (i) an incorrect e-mail address or telephone number provided by you, (ii) the failure of a Service Provider to timely respond to a Submission which FF forwarded to such Service Provider, (iii) the failure of FF to forward your Submission to a Service Provider, or (iv) technical problems.

DISPUTE RESOLUTION

Any claim or controversy arising out of or relating to the use of the Web site, to the goods or services provided by FF, or to any acts or omissions for which you may contend FF is liable, including but not limited to any claim or controversy as to arbitrability ("Dispute"), shall be finally, and exclusively, settled by arbitration. The arbitration shall be held before one arbitrator under the commercial arbitration rules of JAMS in force at that time. The arbitration shall be venued in Cook County, Illinois. The arbitrator shall be selected pursuant to the JAMS rules. Should no JAMS rule regarding the selection of an arbitrator be in effect, you shall select an arbitrator from a panel of arbitrators acceptable to FF. The costs of arbitration shall be paid by the non-prevailing party.

Any judgment upon the award rendered by the arbitrators may be entered in any court of competent jurisdiction in Cook County, Illinois. The arbitrator shall not have the power to award damages in connection with any Dispute in excess of actual compensatory damages and shall not multiply actual damages or award consequential, punitive or exemplary damages, and each party irrevocably waives any claim thereto. The agreement to arbitrate shall not be construed as an agreement to the joinder or consolidation of an arbitration under this Agreement with an arbitration of disputes or claims of any non-party, regardless of the nature of the issues or disputes involved.

THIS AGREEMENT PROVIDES THAT ALL DISPUTES BETWEEN YOU AND FF WILL BE RESOLVED BY BINDING ARBITRATION. YOU THUS GIVE UP YOUR RIGHT TO GO TO COURT TO ASSERT OR DEFEND YOUR RIGHTS. YOU ALSO GIVE UP YOUR RIGHT TO PARTICIPATE IN OR BRING CLASS ACTIONS. YOUR RIGHTS WILL BE DETERMINED BY NEUTRAL ARBITRATORS AND NOT A JUDGE OR JURY. You are entitled to a fair hearing, but the arbitration procedures are simpler and more limited than rules applicable in court. Arbitrator decisions are enforceable and are subject to very limited review by a court. By using the Services or accessing the Web site, you consent to these restrictions.

Should a Dispute arise and should the arbitration provisions herein become inapplicable or unenforceable, or in any instance of any lawsuit between you and FF, the parties agree that jurisdiction over and venue of any suit shall be exclusively in the state and federal courts sitting in Cook County, Illinois. If either party employs attorneys to enforce any right in connection with any Dispute or lawsuit the prevailing party shall be entitled to recover reasonable attorneys' fees from the non-prevailing party.

DISCLOSURES SPECIFIC TO ATTORNEY ADVERTISING

THE WEB SITE MAY CONTAIN ADVERTISING MATERIAL OR LAWYER ADVERTISEMENTS.
Some jurisdictions may consider the Web site to be a form of advertising for legal services and as such may require specific disclosures. Please read the following carefully:

THIS IS AN ADVERTISEMENT. The determination of the need for legal services and the choice of a lawyer are extremely important decisions and should not be based solely upon advertisements. Anyone considering a lawyer should independently investigate the lawyer's credentials and ability, and not rely upon advertisements or self-proclaimed expertise. Hiring a lawyer is an important process that should not be based solely upon advertisements.

The attorney responsible for the content of this Site is Kevin W. Chern, Esq., 25 East Washington, Suite 510, Chicago, Illinois 60602 ("Chern").

Neither Chern nor any law firm involved with the Web site operate as a lawyer-advertising cooperative, lawyer referral service, prepaid legal insurance provider, or similar organization the business or activities of which include the referral of customers, members, or beneficiaries to lawyers for the performance of fee-generating legal services or the payment for or provision of legal services to the customers, members or beneficiaries in matters for which they do not bear ultimate responsibility.

FREE BACKGROUND INFORMATION AVAILABLE UPON REQUEST

Before you decide to hire a law firm, ask them to send you free written information about their qualifications and experience. Additional information about the lawyers or firms may also be obtained by contacting the Bar Association in the State in which such lawyers or law firms are licensed.

No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. Memberships and offices in legal fraternities and legal societies, technical and professional licenses, and memberships in scientific, technical and professional associations and societies of law or fields of practice do not mean that a lawyer is a specialist, expert, authority or is certified in a particular field of law, nor do such memberships or licenses mean that such a lawyer is more expert or competent than any other lawyer.

A description or indication of limitation of practice does not mean that any agency or board has certified such lawyer as a specialist, expert or authority in an indicated field of law practice, nor does it mean that such lawyer is more expert or competent than any other lawyer. We urge all potential clients to make their own independent investigation and evaluation of any lawyer being considered.

Except where otherwise indicated, neither Chern nor any of the law firms which may be involved with the Web site are certified by the Florida Bar Board of Legal Specialization and Education, the Texas Board of Legal Specialization ("Not Certified by the Texas Board of Legal Specialization"), or any other entity or body. The fact that certain attorneys or firms concentrate their practices in the defense of bankruptcy cases (or any other field) is not meant to imply that they have gained any specific type of certification in these areas. Indeed, many states-including Illinois-do not recognize certifications of specialties in the practice of law and explicitly state that any such certificate, award or recognition is not a requirement to practice law in those states.

ADDITIONAL STATE SPECIFIC DISCLOSURES:

Alabama
No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.

Alaska
The Alaska Bar Association does not accredit or endorse certifying organizations.

Florida
The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide to hire any attorney, ask that lawyer to send you free written information about that lawyer's qualifications and experience.

Hawaii
The supreme Court of Hawaii grants Hawaii certification only to lawyers in good standing who have successfully completed a specialty program accredited by the American Bar Association.

Illinois
The Supreme Court of Illinois does not recognize certifications of specialties in the practice of law and that the certificate, award or recognition is not a requirement to practice law in Illinois.

Iowa
The determination of the need for legal services and the choice of a lawyer are extremely important decisions and should not be based solely upon advertisements or self-proclaimed expertise. This disclosure is required by rule of the Supreme Court of Iowa.

Memberships and offices in legal fraternities and legal societies, technical and professional licenses, and memberships in scientific, technical and professional associations and societies of law or field of practice do not mean that a lawyer is a specialist or expert in a field of law, nor do they mean that such a lawyer is necessarily any more expert or competent than any other lawyer.

A description or indication of limitation of practice does not mean that any agency or board has certified such lawyer as a specialist or expert in an indicated field of law practice, nor does it mean that such lawyer is necessarily any more expert or competent than any other lawyer.

All potential clients are urged to make their own independent investigation and evaluation of any lawyer being considered. This notice is required by rule of the Supreme Court of Iowa.

The filing of a claim or suit solely to coerce a settlement or to harass another could be illegal and could render the person so filing liable for malicious prosecution or abuse of process.

Kansas
Any attorney listings or other information pertaining to a particular attorney or law firm on this Site constitutes a paid attorney advertisement, and do not in any way constitute a referral or endorsement by an approved or authorized lawyer referral service.

Massachusetts
If a Massachusetts lawyer holds himself or herself out as "certified" in a particular service, field or area of law by a non-governmental body, the certifying organization is a private organization, whose standards for certification are not regulated by the Commonwealth of Massachusetts.

Mississippi
Free Background information is available upon request to a Mississippi attorney.

There is no procedure in Mississippi for approving certifying or designating organizations and authorities.

Missouri
ADVERTISING MATERIAL: COMMERCIAL SOLICITATIONS ARE PERMITTED BY THE MISSOURI RULES OF PROFESSIONAL CONDUCT BUT ARE NEITHER SUFFITTED TO NOR APPROVED BY THE MISSOURI BAR OR THE SUPREME COURT OF MISSOURI. Neither the Supreme Court of Missouri nor the Missouri Bar reviews or approves certifying organizations or specialist designations.

Nevada
Neither the state bar of Nevada nor any agency of the State Bar has certified any lawyer identified here as a specialist or as an expert. Anyone considering a lawyer should independently investigate the lawyer's credentials and ability.

New Jersey
Any certification as a specialist, or any certification in a field of practice, that does not state that such certification has been granted by the Supreme Court of New Jersey or by an organization that has been approved by the American Bar Association, indicates that the certifying organization has not been approved, or has been denied approval, by the Supreme Court of New Jersey and the American Bar Association.

All attorney listings are a paid attorney advertisement, and do not in any way constitute a referral or endorsement by an approved or authorized lawyer referral service.

New Mexico
LAWYER ADVERTISEMENT
Any certification by an organization other than the New Mexico Board of Legal Specialization does not constitute recognition by the New Mexico Board of Legal Specialization, unless the lawyer is also recognized by the board as a specialist in that area of law.

Rhode Island
The Rhode Island Supreme Court licenses all lawyers in the general practice of law. The court does not license or certify any lawyer as an expert or specialist in any field of practice.

Tennessee
Certifications of Specialization are available to Tennessee lawyers in all areas of practice relating to or included in the areas of Civil Trial, Criminal Trial, Business Bankruptcy, Consumer Bankruptcy, Creditor's Rights, Medical Malpractice, Legal Malpractice, Accounting Malpractice, Elder Law, Estate Planning and Family Law. Listing of related or included practice areas herein does not constitute or imply a representation of certification of specialization.

Texas
Unless otherwise indicated, Not Certified by the Texas Board of Legal Specialization.

Washington
The Supreme Court of Washington does not recognize certification of specialties in the practice of law and that the certificate, award, or recognition is not a requirement to practice law in the State of Washington.

Wyoming
The Wyoming State Bar does not certify any lawyer as a specialist or expert. Anyone considering a lawyer should independently investigate the lawyer's credentials and ability, and not rely upon advertisements or self-proclaimed expertise.

Within the Web site, we may include descriptions of successful lawsuits brought by Chern, certain law firms, or other attorneys not affiliated with us or the Web site. These descriptions are not meant to create any unjustified expectations that similar results can be obtained for others, for each case turns on its own specific factual and legal circumstances. No attorney can guarantee the success of a case and past successes even in very similar lawsuits do not mean that success in a subsequent case is guaranteed or even likely. Past success cannot be an assurance of future success because each case must be decided on its own merits. Results depend upon a variety of factors unique to each case.

The material on the Web site is not intended to, and does not, include any advertisements for legal services that contain dramatizations, testimonials or endorsements. The Web site is intended to provide useful, factual information presented in a non-sensational, objective and understandable manner. The images and pictures on the Web site are not meant to represent or depict actual persons or events, but rather are merely provided for illustrative purposes only.

The Web site is not intended for the purpose of advertising legal services to be performed in any state solely by the law firms, unless they are specifically licensed to practice in that respective State.

To the extent that the Web site does not comply with the laws or regulations of any jurisdiction in which it may be received, the law firms do not wish to, and will not knowingly, accept legal representation based on or resulting from the use of the Site from a person located in that jurisdiction. None of the law firms wish to, or knowingly will, accept legal representation based on or resulting from the use of the Site from a person located outside the United States.

MISCELLANEOUS

This Agreement, including the Privacy Policy, constitutes the entire agreement between you and FF and it supersedes all prior or contemporaneous communications, promises and proposals, whether oral, written or electronic, between you and FF with respect to the Web site and information, software, products and services associated with it. FF and you are intended to be independent contractors, and nothing in this Agreement shall be deemed to establish any relationship of partnership, joint venture, employment, franchise or agency between FF and you. This Agreement shall be subject to and construed in accordance with the laws of the State of Illinois, excluding its conflict of laws principles. If any part of this Agreement is determined to be invalid or unenforceable pursuant to applicable law including, but not limited to, the warranty disclaimers and liability limitations set forth above, then the invalid or unenforceable provision will be deemed superseded by a valid enforceable provision that most closely matches the intent of the original provision, and the remainder of the Agreement shall continue in effect. A printed version of this Agreement and of any notice given in electronic form shall be admissible in judicial or administrative proceedings based upon or relating to this Agreement to the same extent and subject to the same conditions as other business documents and records originally generated and maintained in printed form. All rights not expressly granted herein are reserved.

FF's contact information, should you need to contact FF for any reason, is:

Foreclosure Fighter
25 East Washington, Suite 510
Chicago, IL 60602
Customer Service: (312)________________
Fax: _________________
E-mail: info@foreclosure-fighter.com



DISCLOSURES REQUIRED UNDER SECTION 527 AND 342 OF THE BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2005.

NOTICE NO. 1

Notice Mandated By Section 342(b)(1) and 527(a)(1) Of The Bankruptcy Code

PURPOSES, BENEFITS AND COSTS OF BANKRUPTCY

The United States Constitution provides a method whereby individuals, burdened by excessive debt, can obtain a "fresh start" and pursue productive lives unimpaired by past financial problems. It is an important alternative for persons strapped with more debt and stress than they can handle.

The federal bankruptcy laws were enacted to provide good, honest, hard-working debtors with a fresh start and to establish a ranking and equity among all the creditors clamoring for the debtor's limited resources.

Bankruptcy helps people avoid the kind of permanent discouragement that can prevent them from ever re-establishing themselves as hard working members of society.

To the extent that there may be money or property available for distribution to creditors, creditors are ranked to make sure that money or property is fairly distributed according to established rules as to which creditors get what.

This discussion is intended only as a brief overview of the types of bankruptcy filings and of what a bankruptcy filing can and cannot do. No one should base their decision as to whether or not to file bankruptcy solely on this information. Bankruptcy law is complex, and there are many considerations that must be taken into account in making the determination whether or not to file. Anyone considering bankruptcy is encouraged to make no decision about bankruptcy without seeking the advice and assistance of an experienced attorney who practices nothing but bankruptcy law.

Types of Bankruptcy

The Bankruptcy Code is divided into chapters. The chapters which almost always apply to consumer debtors are chapter 7, known as a "straight bankruptcy", and chapter 13, which involves an affordable plan of repayment.

An important feature applicable to all types of bankruptcy filings is the automatic stay. The automatic stay means that the mere request for bankruptcy protection automatically stops and brings to a grinding halt most lawsuits, repossessions, foreclosures, evictions, garnishments, attachments, utility shut offs, and debt collection harassment. It offers debtors a breathing spell by giving the debtor and the trustee assigned to the case time to review the situation and develop an appropriate plan. In most circumstances, creditors cannot take any further action against the debtor or the property without permission from the bankruptcy court.

Chapter 7

In a chapter 7 case, the bankruptcy court appoints a trustee to examine the debtor's assets to determine if there are any assets not protected by available "exemptions". Exemptions are laws that allow a debtor to keep, and not part with, certain types and amounts of money and property. For example, exemption laws allows a debtor to protect a certain amount of equity in the debtor's residence, motor vehicle, household goods, life insurance, health aids, retirement plans, specified future earnings such as social security benefits, child support, and alimony, and certain other types of personal property. If there is any non-exempt property, it is the Trustee's job to sell it and to distribute the proceeds among the unsecured creditors. Although a liquidation case can rarely help with secured debt (the secured creditor still has the right to repossess the collateral if the debtor falls behind in the monthly payments), the debtor will be discharged from the legal obligation to pay unsecured debts such as credit card debts, medical bills and utility arrearages. However, certain types of unsecured debt are allowed special treatment and cannot be discharged. These include some student loans, alimony, child support, criminal fines, and some taxes.

In addition to attorney fees, there is a filing fee that must be paid to the Bankruptcy Court.

Chapter 13

In a chapter 13 case, the debtor puts forward a plan, following the rules set forth in the bankruptcy laws, to repay certain creditors over a period of time, usually from future income. A chapter 13 case may be advantageous in that the debtor is allowed to get caught up on mortgages or car loans without the threat of foreclosure or repossession, and is allowed to keep both exempt and nonexempt property. The debtor's plan is a document outlining to the bankruptcy court how the debtor proposes to dispose of the claims of the debtor's creditors. The debtor's property is protected from seizure from creditors, including mortgage and other lien holders, as long as the proposed payments are made and necessary insurance coverages remain in place. The plan generally requires monthly payments to the bankruptcy trustee over a period of three to five years. Arrangements can be made to have these payments made automatically through payroll deductions.

In addition to attorney fees, there is a filing fee that must be paid to the Bankruptcy Court.

Chapter 11

By and large, chapter 11 is a type of bankruptcy reserved for large corporate reorganizations. Chapter 11 shares many of the qualities of a chapter 13, but tends to involve much more complexity on a much larger scale.

However, since chapter 11 does not usually pertain to individuals whose debts are primarily consumer debts, further information about chapter 11 will be provided by reference to the following resource: The ABankruptcy Basics@ brochure prepared by the Administrative Office of the United States Courts, dated June 2000, and which can be accessed over the internet by visiting the following website: www.uscourts.gov/bankruptcycourts.html.

Chapter 12

Chapter 12 of the Bankruptcy Code was enacted by Congress in 1986, specifically to meet the needs of financially distressed family farmers. The primary purpose of this legislation was to give family farmers facing bankruptcy a chance to reorganize their debts and keep their farms.

However, as with chapter 11, since chapter 12 does not usually pertain to individuals whose debts are primarily consumer debts, further information about chapter 12 will be provided by reference to the same "Bankruptcy Basics" brochure referred to above, which can be accessed over the internet at the same said website as mentioned for chapter 11.

What Bankruptcy Can and Cannot Do

Bankruptcy may make it possible for financially distressed individuals to:

  1. Discharge liability for most or all of their debts and get a fresh start. When the debt is discharged, the debtor has no further legal obligation to pay the debt.
  2. Stop foreclosure actions on their home and allow them an opportunity to catch up on missed payments.
  3. Prevent repossession of a car or other property, or force the creditor to return property even after it has been repossessed.
  4. Stop wage garnishment and other debt collection harassment, and give the individual some breathing room.
  5. Restore or prevent termination of certain types of utility service.
  6. Lower the monthly payments and interest rates on debts, including secured debts such as car loans.
  7. Allow debtors an opportunity to challenge the claims of certain creditors who have committed fraud or who are otherwise seeking to collect more than they are legally entitled to.

Bankruptcy, however, cannot cure every financial problem. It is usually not possible to:

  1. Eliminate certain rights of secured creditors. Although a debtor can force secured creditors to take payments over time in the bankruptcy process, a debtor generally cannot keep the collateral unless the debtor continues to pay the debt.
  2. Discharge types of debts singled out by the federal bankruptcy statutes for special treatment, such as child support, alimony, student loans, certain court ordered payments, criminal fines, and some taxes.
  3. Protect all cosigners on their debts. If relative or friend co signed a loan which the debtor discharged in bankruptcy, the cosigner may still be obligated to repay whatever part of the loan not paid during the pendency of the bankruptcy case.
  4. Discharge debts that are incurred after bankruptcy has been filed.

Bankruptcy's Effect on Your Credit

By federal law, a bankruptcy can remain part of a debtor's credit history for 10 years. Whether or not the debtor will be granted credit in the future is unpredictable, and probably depends, to a certain extent, on what good things the debtor does in the nature of keeping a job, saving money, making timely payments on secured debts, etc.

Services Available From Credit Counseling Agencies

With limited exceptions, Section 109(h) of the Bankruptcy Code requires that all individuals who file for bankruptcy relief on or after October 17, 2005 receive a briefing that outlines all available opportunities for credit counseling and provides assistance in performing a budget analysis. The briefing must be given within 180 days prior to the bankruptcy filing. The briefing may be provided individually or in a group (including briefings conducted over the Internet or over the telephone) and must be provided by a non-profit budget and credit counseling agency approved by the United States Trustee or bankruptcy administrator. The clerk of the bankruptcy court has a list that you may consult of the approved budget and credit counseling agencies. In addition, after filing a bankruptcy case, an individual debtor generally must complete a financial management instructional course before he or she can receive a discharge. The clerk also has a list of approved financial management instructional courses.

If you're not disciplined enough to create a workable budget and stick to it, can't work out a repayment plan with your creditors, can't keep track of mounting bills, or need more help with your debts than can be achieved by merely having a few of your unsecured creditors lower your interest rates somewhat, it probably makes little sense to consider contacting a credit counseling organization.

If, on the other hand, you meet all or most of those criteria, there are many non-profit credit counseling organizations that will work with you to solve your financial problems.

Most credit counselors offer services through local offices, the Internet, or on the telephone. If possible, it probably best to find an organization that offers in person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.

Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Legitimate counselors will discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow up sessions.

If your financial problems stem from too much debt or your inability to repay your debts, a credit counseling agency may recommend that you enroll in what is knows as a "debt management plan" or "DMP". A DMP alone is not credit counseling, and DMPs are not for everyone. You should sign up for one of these plans only after a certified credit counselor has spent time thoroughly reviewing your financial situation, has offered you customized advice on managing your money, and has analyzed your budget to make sure that the proposed DMP is one you can afford. Even if a DMP is not appropriate for you, a reputable credit counseling organization still can help you create a budget and teach you money management skills.

In a DMP, you deposit money each month with the credit counseling organization, which uses your deposits to pay your unsecured debts, like your credit card bills and medical bills, according to a payment schedule the counselor develops with your creditors. Your creditors may agree to lower your interest rates or waive certain fees, but it's always best to check with all your creditors, just to make sure they offer the concessions that a credit counseling organization is promising you. A successful DMP requires you to make regular, timely payments, and could take 48 months or more to complete. Ask the credit counselor to estimate how long it will take for you to complete the plan. You may have to agree not to apply for C or use C any additional credit while you're participating in the plan, and a DMP is likely of little value if your problems stem from or involve your secured creditors holding your car, truck or home as collateral. DMP's are also likely of little value if your problems stem from alimony, child support or overdue taxes.

NOTICE NO. 2

Notice Mandated By Section 527(a)(2) Of The Bankruptcy Code

NOTICE OF MANDATORY DISCLOSURE TO CONSUMERS WHO CONTEMPLATE FILING BANKRUPTCY

You are notified as follows:

  1. All information that you are required to provide with the filing of your case and thereafter, while your case is pending, must be complete, accurate and truthful.
  2. All your assets and all your liabilities must be completely and accurately disclosed in the documents filed to commence your case, and the replacement value of each asset (as defined in Section 506 of the Bankruptcy Code) must be stated in those documents where requested after reasonable inquiry to establish such value.
  3. Some sections of the Bankruptcy Code require you to determine and list the replacement value of an asset such as a car or furniture. When replacement value is required, it means the replacement value, established after reasonable inquiry, as of the date of the filing of your bankruptcy case, without deduction for costs of sales or marketing. With respect to property acquired for personal, family or household purposes, replacement value means the price a retail merchant would charge for "used" property of that kind considering the age and condition of the property. Again, replacement value is defined in the Bankruptcy Code as the price that a retail merchant would charge for property of the same kind, considering the age and condition of the property at the time its value is determined. This is not the cost to replace the item with a new one or what you could sell the item for; it is the cost at which a retail merchant would sell the used item in its current condition. In many cases (particularly used clothing, furniture, computers, etc.), this would be "yard sale" value, or what the item might sell for on eBay. In other cases, such as jewelry, antiques or collectables, it may be retail value. For motor vehicles, it would be the third party purchase value. For real property, it is what the real property would sell for, at current Market value. For cash and bank accounts, it is the actual amount on deposit. For stocks and bonds, it is their market value as of the date your case is filed. You must make a reasonable inquiry to determine the replacement value of your assets.
  4. Before your case can be filed, it is subject to what is called "Means Testing". The Means Test was designed to determine whether or not you qualify to file a case under chapter 7 of the Bankruptcy Code, and if not, how much you need to pay your unsecured creditors in a chapter 13 case. For purposes of means test, you must state, after reasonable inquiry, your total current monthly income, the amount of all expenses as specified and allowed pursuant to section 707(b)(2) of the bankruptcy code, and if the plan is to file in a Chapter 13 case, you must state, again after reasonable inquiry, your disposable income, as that term is defined.
  5. Information that you provide during your case may be audited pursuant to the provisions of the Bankruptcy Code. Your failure to provide complete, accurate and truthful information may result in the dismissal of your case or other sanctions, including criminal sanctions.

NOTICE NO. 3

Notice Mandated By Section 527(b) Of The Bankruptcy Code

IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES

If you decide to seek bankruptcy relief, you can represent yourself, you can hire an attorney to represent you, or you can get help in some localities from a bankruptcy petition preparer who is not an attorney. THE LAW REQUIRES AN ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN CONTRACT SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY PETITION PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST. Ask to see the contract before you hire anyone.

The following information helps you understand what must be done in a routine bankruptcy case to help you evaluate how much service you need. Although bankruptcy can be complex, many cases are routine.

Before filing a bankruptcy case, either you or your attorney should analyze your eligibility for different forms of debt relief available under the Bankruptcy Code and which form of relief is most likely to be beneficial for you. Be sure you understand the relief you can obtain and its limitations. To file a bankruptcy case, documents called a Petition, Schedules and Statement of Financial Affairs, as well as in some cases a Statement of Intention need to be prepared correctly and filed with the bankruptcy court. You will have to pay a filing fee to the bankruptcy court. Once your case starts, you will have to attend the required first meeting of creditors where you may be questioned by a court official called a >trustee= and by creditors.

If you choose to file a chapter 7 case, you may be asked by a creditor to reaffirm a debt. You may want help deciding whether to do so. A creditor is not permitted to coerce you into reaffirming your debts. It may not be in your best interest to reaffirm a debt.

If you choose to file a chapter 13 case in which you repay your creditors what you can afford over 3 to 5 years, you may also want help with preparing your chapter 13 plan and with the confirmation hearing on your plan which, if held, will be before a bankruptcy judge.

If you select another type of relief under the Bankruptcy Code other than chapter 7 or chapter 13, you will want to find out what should be done from someone familiar with that type of relief. However, please be advised that in most cases, you will only be concerned with chapter 7 and chapter 13.

Your bankruptcy case may also involve litigation. You are generally permitted to represent yourself in litigation in bankruptcy court, but only attorneys, not bankruptcy petition preparers, can give you legal advice.

NOTICE NO. 4

Notice Mandated By Section 342(b)(2) Of The Bankruptcy Code

FRAUD & CONCEALMENT PROHIBITED

If you decide to file bankruptcy, it is important that you understand the following:

  1. Some or all of the information you provide in connection with your bankruptcy will be filed with the bankruptcy court on forms or documents that you will be required to sign and declare as true under penalty of perjury.
  2. A person who knowingly and fraudulently conceals assets or makes a false oath or statement under penalty of perjury in connection with a bankruptcy case shall be subject to fine, imprisonment, or both.
  3. All information you provide in connection with your bankruptcy case is subject to examination by the Attorney General.

ACKNOWLEDGMENT OF RECEIPT

By using the Web site and/or otherwise accepting this Agreement, you acknowledge that you have received a copy of or been provided with access to all of the following notices:

  1. Notice Mandated By Section 342(b)(1) and 527(a)(1) Of The Bankruptcy Code
  2. Notice Mandated By Section 527(a)(2) Of The Bankruptcy Code
  3. Notice Mandated By Section 527(b) Of The Bankruptcy Code