Frequently Asked Questions about Bankruptcy
- What should I do when I can no longer pay my debts?
- What is bankruptcy?
Bankruptcy is relief provided by the federal government that allows people and businesses to get a fresh start financially. Bankruptcy provided for the discharge of unsecured debts and the restructuring of secured debts. Bankruptcy stops collection procedures such as garnishments, foreclosures, repossessions, tax forfeitures, lawsuits, judgments, and any other collection activities.
- Do I have to stop using ALL credit cards?
There are some cases that you may be able to keep some credit cards, only if the creditor agrees.
- Does my husband/wife have to file?
NO. If the debts remain in only one name then there will be no need for the other to file. If a debt is joint, a creditor can however, collect on the non-filing spouse after the case is over.
- Who will find out about my bankruptcy? Can I keep this confidential from my landlord and employer?
While bankruptcy petitions are public records, usually employers or landlords will not find out you filed.
- How do I get started?
- What information should I bring to my first appointment?
We have a Client Questionnaire which we like for you to fill out at the initial meeting. We will need your recent pay stubs along with income tax returns from the past two years as well as a copy of your driver’s license/social security card. While it is not essential for you to bring all of these things to the first appointment, the more information you bring, the better advice I can give you.
Before the case can be filed, there may be some other documents I will need to see, such things include: All of the bills you owe, even the ones you wish to pay (including student loans). We will often need the following items:
- Mailing address, account number and amount you owe for each of your creditors
- Copies of recent paystubs or other income information
- Copies of the last 2 years of income tax returns, including w2s
- 6 months of recent bank statements
- Copy of all vehicle/mobile home titles
- Copy of all judgments/lawsuits pending or closed in the past year
- Copy of recorded mortgage
- Declaration page of insurance on house and vehicle
- What are the advantages of bankruptcy?
First and foremost, all of your debts will be discharged. This means that your creditors will not be able to continue to collect on the debts you are claiming. They will not be able to call you about past due payments, garnish your wages or continue a lawsuit. Quite simply, they will never be able to get any money from you regarding the debts which you owed them.
Also, if you have a secured debt such as a car loan or furniture loan with a high interest rate, we may be able to restructure that debt and lower your interest rate and monthly payments. In some instances, we may be able to lower the amount that you owe them. If you have a mortgage that you are behind on and facing foreclosure or property tax forfeiture, filing for Bankruptcy under Chapter 13 can restructure those debts and prevent you from losing your home.
- What are the disadvantages of filing for bankruptcy? I have heard that it will prevent me from getting credit for 7 to 10 years. Is this true?
Filing Bankruptcy will stay on your credit report for 7-10 years. However, anything that is reported on your credit stays on there for that long. The important thing is that the bankruptcy discharge will eliminate all of the debts from your credit report. This makes creditors more likely to approve you for loans in the future. Most people are able to get financing for loans, car loans, and even mortgages within 1-2 years of filing for bankruptcy. This will make your credit better immediately. This also makes creditors more likely to approve you for loans in the future.
- Will I have to appear in court?
In both Chapter 7 and Chapter 13, you will have to attend a hearing approximately four to six weeks after filing. While this hearing is called the First Meeting of Creditors, it is conducted by a Bankruptcy Trustee and it is most common for most of the creditors to not show up. This hearing is for the trustee and your creditors to discuss and ask questions any questions they may have regarding your income, expenses, assets and other matters.
- Can I still file if I’ve received a Notice of Foreclosure?
As long as the bankruptcy case is filed before the foreclosure sale, the foreclosure can be stopped and you can save your home. In a Chapter 13 we can prepare a plan which allows you time to bring the payments current.
- Are all debts discharged?
Almost all debts are dischargeable, typically the main categories of debts that are usually not discharged: Child Support, Student Loans Some tax debts (most Personal Income Taxes can be discharged and all can be restructured through Chapter 13), and Debts occurred from fraud Debts for personal injury or death that were caused by driving under the influence.
- What if you haven’t answered all my questions?
The information enclosed on this page is not to be assembled as legal advice, and does not create an attorney-client relationship. Bankruptcy law is very complex, and you must always consult an attorney before taking any action.