Bankruptcy FAQs
About how long does the Bankruptcy process last?
How often can I file Bankruptcy?
Does my spouse also have to file?
How do I know what Chapter I qualify for?
Will I lose any of my assets?
Will I have to go to Court?
Creditors have been calling me, will this stop?
Some of my accounts have co-signers, are they protected under Bankruptcy?
Am I allowed to use credit while I am in a Chapter 7 or a 13?
My car was repossessed or is about to be, can I get it back or keep it?
Can I sell my house after I file Bankruptcy?
My house is being foreclosed on, will Bankruptcy stop this?
Can my student loans be discharged?
I currently have a wage garnishment, how will Bankruptcy effect this?
Can child support be discharged in a Bankruptcy?
If I want to keep one of my credit cards, can I just not include it in the Bankruptcy?
Will Bankruptcy eliminate all my debts?
I am currently being sued, does Bankruptcy stop this?
How long does a Bankruptcy stay on my credit report?
Do I have to pay back taxes if I file Bankruptcy?
Can I keep my bank account open?
Does my employer need to know I am filing?
I heard a second mortgage can be discharged in a Bankruptcy. Is this true?
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About how long does the Bankruptcy process last?
In a Chapter 7, the process is generally complete after about five months from your filing date. In a Chapter 13, a plan is created which lasts anywhere from 3-5 years, pending on your amount of assets and liabilities.
How often can I file Bankruptcy?
A Chapter 7 can be filed once every 8 years. A Chapter 13 can be filed whenever needed, so long as it is done in good faith.
Does my spouse also have to file?
No, however, in a Chapter 13, you need to include your spouse’s income.
How do I know what Chapter I qualify for?
Your income, assets and liabilities will determine if you qualify for a Chapter 7 or a Chapter 13. This is something that is discussed at your initial consultation, as every case is different and should be looked at on an individual basis.
Will I lose any of my assets?
90% of our clients keep all their belongings. Sometimes, clients voluntarily surrender items. This all depends on your exemptions, and whether or not you are behind on any payments. Every Debtor (the person who files bankruptcy) is given a certain amount of exemptions. Some have a limit, and some are unlimited. For example, your pension will remain protected. Should you have items, such as a vehicle or multiple vehicles that exceed your exemption permitted, you may want to file a Chapter 13, and make certain payments into a plan to keep those items. This is an issue that will be discussed at your initial consultation, because it differs based on everyone’s personal situation. It is not something to be too concerned about, as there are ways to protect certain assets that you wish to keep.
Will I have to go to Court?
Generally no. You will need to attend a 341 meeting. This is in front of a trustee who will ask you some very basic questions regarding your Bankruptcy. Your attorney will attend with you, and even prepare you on what to expect ahead of time.
Creditors have been calling me, will this stop?
The second you file Bankruptcy all Creditors are required by federal law, to stop contacting you. If for any reason you continue to receive creditor phone calls, please document this, as it could create a potential lawsuit for you against the creditor.
Some of my accounts have co-signers, are they protected under Bankruptcy?
Co-signers for business debt and under Chapter 7 are not protected, meaning they may still be liable for the debt. Under Chapter 13 protection, co-signers are protected.
Am I allowed to use credit while I am in a Chapter 7 or a 13?
In a Chapter 7, as soon as the Bankruptcy process is complete (about five months) you may begin using credit cards. In a Chapter 13, you need to get court permission to use a credit card.
My car was repossessed or is about to be, can I get it back or keep it?
In a Chapter 7, as soon as you file Bankruptcy your vehicle cannot be taken, but you must get up to date on your payments to keep it, or the vehicle lender can get court permission to take your vehicle. In a Chapter 13, you can keep your vehicle, even if you are behind on your payments, by making payments into your plan to cure the default. If the vehicle has been repossessed in the past 10 days, you may still be able to get it back.
Can I sell my house after I file Bankruptcy?
Yes, you can, however, there are certain procedures to be followed under both Chapter 7 and 13.
My house is being foreclosed on, will Bankruptcy stop this?
The second you file Bankruptcy the foreclosure process has to stop, so long as a sale date has not been set. With court permission it can resume later. In a Chapter 13, you can cure this default by paying into the plan, and denying the Bank the right to foreclose.
Can my student loans be discharged?
The answer to this is generally no. Student loans can only be discharged, if the debtor (the person who has filed Bankruptcy) can show an extreme hardship in being able to pay off those loans.
I currently have a wage garnishment, how will Bankruptcy effect this?
Bankruptcy will halt all wage garnishments except in specific situations, such as child support.
Can child support be discharged in a Bankruptcy?
No it cannot. You must continue to pay any child support obligations.
If I want to keep one of my credit cards, can I just not include it in the Bankruptcy?
No, unless the credit card has a zero balance, you must list all your debts.
Will Bankruptcy eliminate all my debts?
In a Chapter 7, most of your unsecured debts are eliminated. Secured debts, such as your home and vehicle, do not go away. Also, income taxes within the last 3 years, child support, alimony and student loans will generally not go away. In a Chapter 13, many of the debts that could have been discharged in a Chapter 7, will be discharged. Also you are able to get up to date on your secured debts by paying into a plan, and modifying the rights of the secured creditors, to get you a better rate. This can vary pending different factors, such as the market value of the secured item.
I am currently being sued, does Bankruptcy stop this?
As soon as you file Bankruptcy, any pending lawsuit is temporarily stopped, except for child support obligations.
How long does a Bankruptcy stay on my credit report?
It stays on there for 10 years, however, this does not mean you will not be able to get credit during this time. In fact, after you received your discharge you can sit down with someone at Brown, Van Horn, to discuss ways to increase your credit score.
Do I have to pay back taxes if I file Bankruptcy?
This is a complex question, that will need to be discussed personally with an attorney, however, in a Chapter 13, you can pay your back taxes into a plan without paying interest.
Can I keep my bank account open?
Yes, you can. However, if you also owe the Bank any money on a credit card, or any type of loan, including a mortgage, the bank can take your money. So if this situation pertains to you, you may want to close that bank account, and open a new one at another bank.
Does my employer need to know I am filing?
In a Chapter 7, they only need to know if you owe your employer money. In a Chapter 13, they will know, because we have to file a wage deduction order which takes your payments directly from your employer to your trustee.
Yes and No. This is called lien stripping, and it depends on many factors, and only applies to a Chapter 13. If you have a second mortgage that is completely unsecured (meaning the value of your home is less than what you owe on your first mortgage), then the second mortgage can be treated as an unsecured debt, and will be treated similar to a credit card. Therefore, it is possible that a portion, or all of your second mortgage could be dishcarged. Again, this depends on many factors, and should be specifically discussed with an attorney.I heard a second mortgage can be discharged in a Bankruptcy. Is this true?
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