BANKRUPTCY FAQs

What is Bankruptcy?

Bankruptcy is a federal process designed to help people eliminate their debt or repay them under the protection of the bankruptcy court.  Consumer Bankruptcies are generally described as Chapter 7 (liquidation) or Chapter 13 (reorganization).

Under Chapter 7, you ask the bankruptcy court to wipe out the debt you owe.  Under Chapter 13, you file a payment plan with the bankruptcy court proposing how you will repay your creditors. You must repay some debts in full; others may be repaid only partially or not at all.  It all depends on what you can afford.

 

Who can file for Bankruptcy?

 With few exceptions, any person or business owing money to a creditor can file a bankruptcy petition.

 

I have a lot of credit card debt and my creditors keep calling me.  How can a bankruptcy help me?

Under most circumstances credit card debt would be dischargeable in a bankruptcy.  Once you file bankruptcy, your creditors must stop all collection activity against you, including telephone calls and letters.

 

Will Bankruptcy wipe out all my debt?

Yes, with some exceptions. When your bankruptcy is completed, many of your debts are “discharged.” This means they are wiped out and you are no longer legally obligated to pay them.  However, certain types of debts are NOT DISCHARGEABLE in bankruptcy. They include child support, student loans, recent back taxes and debts incurred as the result of fraud.


Will I lose everything after Bankruptcy?

No!  Many people believe that they cannot own anything for a period of time after filing for bankruptcy.  This is not true. You can keep your exempt property (home, car, furniture, retirement accounts, etc..) and anything you obtain after the bankruptcy is filed.

 

If I am married, do I have to file Bankruptcy with my spouse?

No.  A married person can file with a spouse, or alone.  However, only the liability of the person filing is discharged. So if your spouse is obligated on the debt, and your spouse decides not to file, your spouse will still be liable on that debt.

 

I am behind on my mortgage payments and the mortgage company has started foreclosure proceedings.  Can anything be done to save my home?

Yes.  If you are unable to work out a payment plan directly with your mortgage company, a Chapter 13 bankruptcy may allow you to save your home.  Once a bankruptcy is filed, your creditors must stop all collection activity against you, including foreclosure proceedings.

The past due amounts you owe the mortgage company will be paid through the Bankruptcy Trustee (the person assigned by the court to administer your bankruptcy). While you are in a Chapter 13 bankruptcy, you must still make your regular monthly mortgage payments and keep current with your payments to the Trustee to prevent the mortgage company from being allowed to go forward with the foreclosure.

 

Will I ever get Credit again / or be able to buy a house?

Yes! After bankruptcy, you will start receiving credit card offers shortly after receiving your discharge. Normally – 2 years is all it takes before a debtor is eligible for a mortgage loan with favorable terms. The stability of your income and the size of your down payment is much more important than the fact you filed bankruptcy in the past.

 

 

 

 

Can my Boss fire me for filing Bankruptcy?

No. Federal law prohibits any employer from discriminating against you for filing bankruptcy.

 

How do I know if Bankruptcy is right for me?

Your first step in determining if Bankruptcy is right for you is to speak with a competent bankruptcy Attorney. Hands Law Office offers a FREE CONSULTATION. During the consultation, the Attorney will discuss your situation and help you determine if bankruptcy is a sound option for you.

 

 

HANDS LAW OFFICE, PLLC is providing this guide for general informational purposes only.  Nothing contained in this guide should be construed as legal advice, or as a recommendation to file bankruptcy as this is strictly a personal decision.  Should you have any additional questions after reading this document, or should you desire to file for Chapter 7 or 13 bankruptcy protection, please call us at (704) 248-7976 for a Free Consultation.  We are a debt relief agency and we help people file for bankruptcy relief under the bankruptcy code.