What is bankruptcy?
Bankruptcy is a proceeding under federal law that allows debtors who owe more money than they can pay to either eliminate their debts or work out a payment plan to pay a portion (or all) of their debts over time. Read more…
Am I eligible for bankruptcy?
The answer to this question as well as the related issue of which kind of bankruptcy you are eligible for involve several factors. Only individuals can file a debt adjustment under Chapter 13, but both individuals and corporations may file liquidations under Chapter 7. An individual may not be eligible under either Chapter if he or she filed a previous bankruptcy that was dismissed on certain grounds. With limited exceptions, you cannot file under either Chapter 7 or Chapter 13 until you complete the required credit counseling. Which chapter you are eligible for also depends on whether you have a regular income, whether your debts are primarily consumer debts, and if so, how your income fares under the “means test.” Find out free of charge whether you are eligible to file by talking to an experienced bankruptcy attorney in your area. Read more…
What if I’ve filed for bankruptcy before?
If you have discharged your debts in bankruptcy before, you may be able to discharge them again, subject to certain time limits. Read more…
Do I need an attorney to file bankruptcy?
You are, of course, entitled to represent yourself in a bankruptcy case. But even the simplest bankruptcy can become quickly and surprisingly complicated. To maximize the benefits of a bankruptcy and to avoid making devastating mistakes, you should hire an attorney. This is especially true in a Chapter 13 bankruptcy. Read more…
Will I have to go to court?
In all bankruptcy cases you must attend an initial meeting of creditors conducted by the bankruptcy trustee. In some cases you may also have to attend subsequent hearings before a judge. Read more…
How much does filing for bankruptcy cost?
Depending on the complexity of your case, whether you need to file a Chapter 7 or a Chapter 13 bankruptcy, and the customary charges of attorneys in your area, a bankruptcy could cost from several hundred to a few thousand dollars. Attorney fees, and when necessary court filing fees, can generally be paid in installments.
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What is Chapter 7?
Chapter 7 bankruptcy (liquidation bankruptcy) allows you to discharge or get rid of certain unsecured debts and keep most, if not all, of your possessions. Dischargeable unsecured debts include credit card balances, payday loans, personal loans, debts remaining from repossessed property, utility bills, and medical bills. In some cases, you also may be able to discharge old income and property tax debts. If you are qualified to file under Chapter 7 (see below), doing so can give you a fresh financial start. Read more…
What is Chapter 13?
Chapter 13 bankruptcy (debt adjustment bankruptcy) involves entering into a three- to five-year payment plan to pay debts, or fractions thereof, in an affordable manner. Chapter 13 may be a viable option if you need to save a home from foreclosure or a car from repossession; if you don’t qualify for Chapter 7 because your income is too high; if you owe debts (such as taxes, child support arrearages, and divorce debts) that are not dischargeable under Chapter 7; or if you wish to keep valuable assets that you would lose under Chapter 7. In many cases, if you have a regular income Chapter 13 can help you regain control of your financial life. Read more…
Can I choose which debts I want to get rid of?
You are required to disclose all of your debts in your bankruptcy documents. Failing to list a debt may jeopardize your right to obtain a discharge of other obligations. Read more…
What if I’m being sued when I file for bankruptcy?
Filing for bankruptcy protects you from actions by creditors to collect debts. When you file for bankruptcy, a temporary court order called an automatic stay goes into effect immediately, ordering creditors to cease taking any further steps to collect debts. The automatic stay stops creditor harassment and wage garnishments. It also prevents (at least temporarily) the continuation or filing of certain types of legal actions including repossessions and foreclosures. Read more…
What is the automatic stay in bankruptcy?
The automatic stay is one of the most fundamental debtor protections afforded by the bankruptcy law. It is an injunction that goes into effect immediately upon the filing of a bankruptcy case and prohibits collection actions against the debtor and the property of the bankruptcy estate. It puts an end to creditor harassment and relieves some of the financial pressures that drive a debtor to bankruptcy. In a Chapter 13 bankruptcy, it gives the debtor some immediate breathing room and an opportunity to propose a payment plan. Read more…
Will I lose my car?
In most cases, you are entitled to keep a car when you file for bankruptcy. The circumstances under which you will be able to keep the car differ depending on whether you file under Chapter 7 or Chapter 13. Read more…
Will I lose my home?
In many cases, you are able to keep your primary residence. If you file under Chapter 7 and have no equity in the property, or if your equity does not exceed an exempt amount, you may be able to keep your home provided that you are current on your payments. If you are behind on your mortgage payments, a Chapter 13 filing can prevent or stop a foreclosure and give you the opportunity to bring the arrearages current over time. Read more…
Can my landlord evict me?
Whether filing for bankruptcy will help you avoid an eviction depends on many factors, including what stage the eviction proceeding is in and what the landlord tenant laws of your state provide. But except for the situation where a landlord has already obtained a judgment for possession in a state where the tenant is permitted to cure by paying all amounts due under the judgment — and the tenant is able to pay those amounts fairly quickly — filing bankruptcy does no more than delay the eviction for a short time. Read more…
What will happen to my other property?
The bankruptcy code allows you to keep certain exempt assets considered necessary for a “fresh start” after bankruptcy. Which assets are exempt is determined by state law, so the answer varies from state to state. But generally you are allowed certain specified values in such things as household goods, life and disability insurance, personal injury compensation payments, jewelry, health aids, and tools of trade. The amount of property you can keep or that is considered exempt depends on a number of factors, but many debtors who file under Chapter 7 or Chapter 13 are able to keep all of their property. Read more…
Will I lose my job?
It is unlawful for any employer to terminate your employment solely because you file for bankruptcy. It is also unlawful for a government employer, but not a private employer, to deny employment to you based solely on the filing of a bankruptcy. But in practice these legal assurances may be rather meaningless because discrimination in employment is difficult to prove short of an outright admission by the employer. Read more…
Can my utilities be cut off?
Public utilities cannot refuse or discontinue service solely because you file for bankruptcy, but they can require deposits to secure future services. Read more…
What if I receive an inheritance?
If you become entitled to an inheritance within 180 days after you file, the inheritance becomes property of the bankruptcy estate and can be used to pay creditors. Under Chapter 13, it can become property of the estate any time before your payment plan is complete and your case is closed. Read more…
Can I file without my spouse?
Yes, but the bankruptcy may have some consequences for your spouse and it is sometimes advisable for married persons to file the bankruptcy jointly. When one spouse files bankruptcy, the spouse who doesn’t file may lose some property and may end up being responsible for some of the debts. Read more…
What happens if I have a cosigner on a loan?
If you file under Chapter 7, your creditor will have the right to demand payment from your cosigner. In some situations under Chapter 13, your cosigner is protected from collection action by the creditor. In either case, if your cosigner ends up paying your debt you may be obligated to reimburse the co-signer unless you properly listed him or her as a creditor. Read more…
Can I discharge my student loans?
Except in cases of undue hardship, student loans are not dischargeable in bankruptcy. Barring the most extreme circumstances, you must continue to pay your student loans even after you have discharged other debts in bankruptcy. There are, however, many helpful and effective student-loan repayment options available through your lender. Read more…
Can I get a student loan after bankruptcy?
If you meet statutory and administrative criteria, you may be able to get a student loan from a government entity or a private business that makes government-insured student loans. These lenders are prohibited by law from discriminating against persons who have filed for bankruptcy. However, your damaged credit, including the bankruptcy information included in your credit report, may prevent you from obtaining educational loans from other sources. Read more…
Will my credit be ruined forever?
If you are a candidate for bankruptcy, chances are that your credit rating is already very low. A bankruptcy filing will remain on your credit report for up to 10 years, but it can be the starting point for rebuilding your credit. Read more…
How can I rebuild my credit after bankruptcy?
Open a checking or savings account and handle your money responsibly. Apply for a secured installment loan or secured credit card, using your savings account as collateral. Pay your charges off every month. Pay your utility bills, rent or mortgage, and reaffirmed pre-bankruptcy debts on time. Find a friend or relative to cosign a small loan and pay it on time. Most importantly, live within your means. Don’t increase your debt-to-income ratio by purchasing unnecessary luxury items on credit. Read more…
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