Frequently Asked Questions

Yes. Most secured creditors such as a mortgage company or car creditor will charge a fee to your account to cover their attorney fees or costs associated with the bankruptcy or preparation of a reaffirmation.

If you file chapter 7 and you want to keep a house or a car or furniture that you are still paying for, you will likely enter into a reaffirmation agreement with the creditor involved. A reaffirmation agreement means you are still personally responsible for the debt. Most creditors insist on these agreements.

If you have a job it will be taken from your paycheck like a garnishment. If you do not have a job, you can mail in money orders or set up an electronic payment from your bank account.

In a chapter 7 the trustee is the person who verifies that you have accurately completed your paperwork and searches for assets which can be liquidated. In a chapter 13, the trustee also verifies your paperwork and is the person who collects your plan payments and disburses money to your creditors.

Yes. All creditors are given notice of your bankruptcy and allowed to contest the discharge of your debt. It is unusual for this to happen and we can usually avoid these problems when you give complete and accurate information. The most typical problems we have with creditors are resolved with negotiation.

Every person who files bankruptcy is allowed to exempt or protect certain assets. Exemption laws allow you to protect some personal property such as cars, furniture, clothes and jewelry. Also most retirement plans can be protected and some of your home equity. Every case is different and we have to figure out what exemptions will be applicable in your case.

You should expect bankruptcy to remain on your credit for 10 years. But remember, you can rebuild your credit in a lot less time than ten years.

Yes. Many people are able to buy a house or car after they complete their bankruptcy case. You will have to take steps to restore your credit of course.

Yes. In a chapter 13 case, we can include your attorney fees and court cost inside your plan payments.

This is always a terrible idea. The bankruptcy laws allow the trustee to undo any transaction where you give away property before you file or even sell below market value.

Yes. All debts, no matter how much or who to, is required to be disclosed on your bankruptcy petition. This includes debts to family members and doctors and check cashing places.

Chapter 7 is known as liquidation bankruptcy because your trustee can sell (or liquidate) your assets to raise money to pay your debts. You are able to exempt (or protect) assets but sometimes an asset cannot be protected and it is taken to pay creditors. This is why it is important to fully disclose all assets to your attorney to make sure we can protect them.

Everyone who files bankruptcy has to attend a meeting of creditors about a month after their case if filed. At this meeting you meet with a trustee who will ask questions and verify that your bankruptcy petition is accurate. Creditors are also allowed to attend and ask you questions.

After filing bankruptcy, you are required to complete a debtor education class intended to teach you budgeting, credit repair, and other ways to be smarter about your finances. Many people find these classes very useful.

You are required to complete a credit counseling session and obtain a certificate prior to filing bankruptcy.

Ordinarily you do not have to close your bank account when you file bankruptcy. We do advise that you close your account when you owe a debt to the same bank or if you have a lot of check advances pending.

The automatic stay is a statute within the bankruptcy code which is triggered as soon as you file your case. It prevents creditors from continuing to harass or collect from you. It also stops garnishments, foreclosures, and lawsuits. Once you file your bankruptcy. The automatic stay protects you from your creditors.

Absolutely not. Sometimes you are unable to discharge debt when it was incurred in close proximity to when you file.

Yes many debts such as taxes, student loans, criminal fines, child support and alimony cannot be discharged. Also debts incurred under false pretense or fraud or through an intentional injury and drinking and driving may not be discharged.

The discharge order is the order you receive when you successfully complete your bankruptcy. It forever removes your personal liability on the debts included in the bankruptcy.

You can in most cases. Most things such as household goods can be protected while still discharging the debt.

Unsecured debt is debt that does not have any collateral pledged to the lender such as credit cards, medical bills, personal loans, utility bills, and repossessed vehicles. Some loan company debts and payday lenders are also unsecured.

Not usually. In a chapter 7 you can keep your tax refund as long as you exempt the refund on your petition. In a chapter 13 plan, you can generally keep your tax refunds as long as you agree to pay back enough of your unsecured debt.

Sometimes you can. There are certain conditions which must be met, but sometimes, when the taxes are old enough, you can discharge taxes without paying them back.

Yes. It is very common to pay IRS debts and other tax obligations such as back past due property taxes inside a chapter 13 plan.

Ordinarily you will pay a percentage of your unsecured debt through a chapter 13. How much depends on your income and on tour assets such as equity in real estate.

Yes. It is very common to modify a car payment in chapter 13 by reducing principal and interest and by stretching out the payments.

Unfortunately you cannot usually lower your house payment in chapter 13 just catch up and maintain the future payments.

Chapter 13 allows you to stop a foreclosure but it also allows you to catch up mortgage arrears over time while maintaining ongoing mortgage payments.

Of course you can. Stopping a foreclosure or preventing repossession is a major reason to choose chapter 13 over chapter 7.

In most chapter 7 cases you can keep your house and car. Of course, you will still have to make those payments. Sometimes folks do lose a car or real estate when they file chapter 7 when they have substantial equity or they are behind on payments and can’t catch up