Bankruptcy Questions

Bankruptcy is a process under federal law that allows people who owe more money than they can repay to either eliminate their debts or work out a payment plan to either pay a portion (or all) of their debts over time.

How do I know if I should file bankruptcy?

If your debt seems to consume or dictate a majority of your thoughts and actions you may need to consider your bankruptcy. If you realistically don’t believe 7-10 years you will be debt free then you should consider bankruptcy

What does it cost to file for bankruptcy?

Bankruptcy attorney fees are separate.It now costs $299 to file for bankruptcy under chapter 7 and $274 to file for bankruptcy under chapter 13, whether for one person or a married couple. The court may allow you to pay this filing fee in installments if you can not pay all at once. If you are unable to pay the filing fee in installments, you may request that the court waive the filing fee. If you hire an attorney you will also have to pay the attorney’s fees you agree to.

Who knows about my bankruptcy case?

When you file bankruptcy your name is entered into a database that anyone with a PACER account can access to see your documents. Typically, only creditors or attorneys access this database because it costs $.08 per page to view but the bottom line is anyone can open an account with PACER and see who filed. It is also possible people could read your name if you know of a place where they list people filing bankruptcy and they read it on the day that it is printed.

What must I do before filing bankruptcy?

You must receive budget and credit counseling from an approved credit counseling agency within 180 days before your bankruptcy case is filed. The agency will review possible options available to you in credit counseling and assist you in reviewing your budget. Different agencies provide the counseling in-person, by telephone, or over the Internet. If you decide to file bankruptcy, you will need to file with the bankruptcy forms in your case a certificate from the agency stating that you received the counseling.

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is a release of the debtor (you) from personal liability for certain specified types of debts. In other words, the debtor is no longer required by law to pay any debts that are discharged through a chapter 7 bankruptcy filing. The discharge is a permanent order directed to the creditors of the debtor that they refrain from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, mail, and any personal contacts. Even though a debtor is relieved of personal liability for all debts that are discharged through a chapter 7 bankruptcy filing, a valid lien (a charge upon specific property to secure payment of a debt) that has not been avoided (made unenforceable) in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien.

What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy you file a plan showing how you will pay off some of your past-due and current debts over a period of three to five years. The most important thing about a chapter 13 bankruptcy case is that it will allow you to keep valuable property, like your home or car, even if you are behind on payments or you have equity not covered by your exemptions. Your payments on these secured debts will generally be your regular monthly payments plus some extra amount if you need to get caught up because you are behind when you file. The plans can range for 3-5 years.

Will I lose anything if I file for bankruptcy?

Many people lose hardly anything because of the bankruptcy exemptions. It is possible liquidations could occur if you have a large amount of assets that you are not able to list under your bankruptcy exemptions.

Explain to your potential landlord you filed bankruptcy landlords typically would rather rent to someone who has filed then someone who hasn’t. This is common, and can be overcome by finding  Rent to own Homes Listings to restart after bankruptcy. Once. you file almost all your other debt goes away and it will be easier for you to pay your rent when you’re not paying on the credit cards

No, if it was not your intent to game the system. Debt has been a problem for centuries. Some people have had bad luck that has forced them to into debt. Some people have never been educated on how to deal with finances. In fact, if you read the Christian bible it provides guidelines for debt forgiveness every 7 years.

You should approaching choosing an attorney like you would buy anything else. The difficult part here is you most likely don’t want to run around and ask everyone. The next best thing is to read, read read and research. Bankruptcy forums are a great place to learn about the process from people who are in bankruptcy or have went through the process. After you have read about the process and procedures you need to have free consults with no less than 3-4 attorneys. Your prior reading and research will assist you in being comfortable when screening potential attorneys.

No, typically student loans and tax/government loans are exempt from being discharged during bankruptcy.

Yes, there are several ways to obtain credit after bankruptcy. The best possible method is to pay your current bills on time. You can also start to build your credit by using secured credit cards.

Will bankruptcy stop all the harassing phone calls and mail?

Yes, only after you have taken the required pre bankruptcy course and actually paid the federal governments filing fee of 299.00. After filing, an automatic stay is in place that prevents creditors from contacting you.

What does “secured” or “unsecured” mean?

Unsecured or Secured typically relates to money loaned. Unsecured is money that is loaned without collateral. Unsecured loans tend to be personal loans, personal lines of credit, student loans and some home improvement loans.

Secured means the money being loaned to you has collateral that helps ensure you will make your payment. Boat loans, Auto loans, RV loans, HELOC are all secured loans. This means the bank could potentially take the property and sell it to recover any money they have lost.

What happens if I file and discover another debt after filing?

For a fee your attorney can amend your case to include any additional debts you find after your case is filed.

What happens when one spouse files without the other spouse?

Each case can vary and this is where an experience attorney helps. The spouse that does not file could end up being responsible for some of the debts.

If I get divorced will I still be responsible for my ex-spouse’s debts?

Joint accounts are the responsibility of both you and your ex-spouse. If one of you

doesn’t take his or her turn paying the bill, the negative mark will affect both of your

credit ratings. As you are both making a fresh start, neither one of you needs negative

information on your credit report.

Can I pick which debts to put in the

No… You must include all of your debts into the bankruptcy when you are filing

Will I have to go before a judge or go to court?

In most bankruptcy cases, you only have to go to a proceeding called the “meeting of creditors” to meet with the bankruptcy trustee and any creditor who chooses to come. Most of the time, this meeting will be a short and simple procedure where you are asked a few questions about your bankruptcy forms and your financial situation.

Occasionally, if complications arise, or if you choose to dispute a debt, you may have to appear before a judge at a hearing. If you need to go to court, you will receive notice of the court date and time from the court and/or from your attorney.

When will I get my discharge?

What can Bankruptcy do for me?

Bankruptcy may allow you to:

Erase the legal obligation to pay most or all of your debts.

This is called a “discharge” of debts. It is designed to give you a fresh financial start.

Stop foreclosure on your house or mobile home and give you a chance to catch up on payments you missed. (Bankruptcy does not automatically erase mortgages and other liens on your property without payment.)

Prevent repossession of a car or other property, or force the creditor to return property even after it has been repossessed.

Bankruptcy could stop wage garnishment, debt collection harassment, and similar creditor actions to collect a debt. Restore or prevent termination of utility service.

Allow you to challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more than you really owe.

Can I file bankruptcy without an attorney?

Yes, it is possible to file Pro Se. However, since bankruptcy laws were changed in 2005 the courts have made filing more difficult for individuals. The benefit of an attorney is he/she will know where people get stuck when filling out paper and gathering required documents.