Most clients begin with these TEN (10) Frequently Asked Questions:
1. What property do I keep and lose if I file a bankruptcy case?
Most people keep their home, theirs cars (one per driver), and their personal possessions, like their furnishings inside their home and garage their clothing, their jewelry, collections, books, retirement accounts, and pets. All of these items do have limitations, but most of my clients find that these limits still enable them to keep their personal property.
You may, although not always, depending on the situation, lose the extra car, a lake lot, a savings account, stock certificates, or other non-exempt property. We will need to look at ALL of the property and your individual circumstances to determine what you may possibly lose.
2. What is the difference between a Chapter 7 and Chapter 13?
In the simplest answer, a Chapter 7 allows you to file a case and be relieved of debts in a short period of time, whereas, Chapter 13, requires that you make a monthly payment to the Trustee in order to pay some of your debts. The different Chapters provide different protections for people who need to catch up on back mortgage payments, or car payments, and may be determined by the amount of your gross income.
3. What will this do to my credit score?
In my practice, we have found that your credit score improves after the first year of the anniversary of your filing a bankruptcy case.
4. Will filing a bankruptcy case stop lawsuits?
When you file a case, bankruptcy law immediately puts in place an Automatic Stay provision that protects you from being sued by any creditor for debt.
5. If I'm married, can I file a case by myself without my spouse?
You are allowed under the Bankruptcy rules to file a case by yourself. The debts may have been created by only you, and your spouse was not a party to the credit agreement.
6. Can I file AGAIN, if I have already filed in the past?
Most people are not prohibited from filing a second, or third, or however many cases, even if they have a filed a bankruptcy case in the past. We will have to look at the rules for repeat filings, and apply those rules to your particular case.
7. What is the Means Test?
First, its not something that you pass or fail, its a guideline, for gross income earned, and for allowable deductions from income, to determine whether you are qualified to file a Chapter 7 case, and a determination to set the Chapter 13 Plan at either 3 or 5 yrs.
8. Can I get relief from Student Education Loans or Taxes?
At the current time, Student Loans and most taxes are NOT dischargeable in bankruptcy. Some taxes are forgiven, so we will have to look at your type of taxes owed.
9. How long does it take for the process?
Commonly, most Chapter 7 cases are a few months in duration, and Chapter 13 cases range from 3-5yrs.
10. Are Judgments taken care of with a bankruptcy?
A judgment for an unsecured debt, like a credit card, or a repossessed vehicle debt, foreclosed home sale, are taken care of by the discharge in bankruptcy. Other judgments for criminal or administrative debt are not dischargeable.