Frequently Asked Questions

Q. Will I be able to keep all of my property?

A. Most people don't lose any of their property in bankruptcy. Within limits, you can keep your home, your household goods, your vehicle and your retirement funds. You are allowed to keep property in Chapter 7 if it is exempt. Exemption laws can be complicated, but a good bankruptcy lawyer can exempt all of most people's property. If an item is collateral on a loan, then you usually must either agree to pay for the item or surrender it to the creditor. Generally, you don't lose your property in Chapter 13, regardless of whether it is exempt.

Q. What does bankruptcy cost?

A. The court filing fee for Chapter 7 is $299.00 and for Chapter 13 it is $274.00. There is also an Attorney fee, which will depend on the complexity of the case and ability to pay. The fee can normally be quoted over the phone if you call our office. For Chapter 7 bankruptcy the court filing fee and attorney fee must be paid in full before the case is filed. For Chapter 13, most of the attorney fee can usually be consolidated with your other debts.

Q. What does bankruptcy do to my credit?

A. Bankruptcy stays on your credit record for ten years. However, most people are able to obtain creditor shortly after they complete their bankruptcy and sometimes even while they are in bankruptcy. Generally, it is possible to get a good rate on a home mortgage two years after you file Chapter 7 bankruptcy, assuming you qualify in all other respects. If your credit is already bad, bankruptcy may improve it.

Q. Do I have to file bankruptcy on all my debts?

A. You must list all of your debts in your bankruptcy papers. However, you can pay any debt you want after you file bankruptcy. You can do this informally or formally with a "reaffirmation agreement".

Q. Will bankruptcy protect me from creditors?

A. The filing of a bankruptcy petition creates an automatic court order against your creditors from collecting from you. The moment your bankruptcy is filed, creditors must stop judgments, wage garnishments, evictions, foreclosures, telephone calls, and even billing statements.

Q. Does my spouse have to file bankruptcy with me?

A. Your spouse does not have to file bankruptcy jointly with you. If the debts are in your name only, there is no reason for your spouse to file with you.

Q. Will I be able to rent after I file bankruptcy?

A. It is very rare that bankruptcy causes a problem with renting a home or apartment. With millions of bankruptcy cases filed in recent years, it is obvious that people who file bankruptcy are able to find a place to rent. Landlords will take into account prior rental history.

Q. Do I have enough debt to file bankruptcy?

A. There is no set amount of debt for filing bankruptcy. One thing to consider is whether you are able to pay more than the minimum monthly payments on your credit cards. If you pay only the minimum payments, you will be in debt for many years. The high interest rates and penalties can make it impossible to work your way of the debt. Taking a second job is not always an option. Repossessions, foreclosures, judgments, wage garnishments and bank levies are all possible indications that you have a serious debt problem and need to file for bankruptcy protection.

Q. Do I have to go to court?

A. After your bankruptcy is filed, you will receive notice of you hearing date. The hearing is normally scheduled about a month after the bankruptcy papers are filed. At the hearing, we will meet with the bankruptcy trustee. The trustee will ask you questions for about five minutes. The answers to nearly all of the questions are already in your bankruptcy papers. The trustee mainly wants to verify the information and clarify anything that they don’t understand. When you go to the hearing, you must bring a picture I.D. and proof of your social security number.

Q. What is the bankruptcy process?

A. The bankruptcy process begins with a consultation at our office. We gather information to draft the paperwork and we explain the bankruptcy process. We give you a list of approved credit counseling agencies. You must consult with one of the agencies for a credit counseling briefing. This can be done for a small fee in person, by telephone, or internet. You will receive a certificate which you will give to us to file with your bankruptcy papers. After we file the bankruptcy, you will take a short financial management course by an approved credit counseling agency. This can also be done over the internet or by telephone for a small fee. About a month after the bankruptcy papers are filed, we will have a short meeting with the bankruptcy trustee. In a Chapter 7 case, creditors have 60 days after the hearing to contest the elimination of a debt on certain limited grounds, such as fraud. Once the 60 day period expires, the court enters an order discharging your debts. At that point, all of your dischargeable debts are eliminated and no longer owed. In a Chapter 13 case, discharge occurs when you complete your debt consolidation payments. Until that time, you are protected from collection efforts.

Q. What must I disclose in my bankruptcy papers?

A. We can send you worksheets that cover the information that we need to complete your bankruptcy papers. When you sign the completed bankruptcy papers, you are signing under penalty of perjury that the information is both true and complete. Be sure to tell your attorney everything. Do not try to hide anything because bankruptcy fraud is a federal crime.

Q. What is a reaffirmation agreement?

A. A reaffirmation agreement can be made in a chapter 7 case. A reaffirmation agreement is an agreement to repay a debt and take it out of bankruptcy so that it will still be owed at the end of the case. This is normally done with debts that are collateralized. For instance, you might want to reaffirm a mortgage or a car loan. You would agree to continue to be responsible for the payments on the loan and the creditor would agree to allow you to keep the collateral. In a chapter 13 case, reaffirmation is not necessary because a repayment plan is filed with the court.