1. Q: How long does the bankruptcy process last?
A: Typically, a Chapter 13 will be a three or five
2. Q: Will I have to go to court?
A: In a routine Chapter 7 the answer is no. There is an out of court meeting you are required to attend known as a creditors' meeting. The bankruptcy trustee will put you under oath and ask you some questions. In most cases the questions are routine and simple, and you are only under examination for several minutes. Creditors are allowed to attend this meeting and ask questions, but they rarely do.
3. Q: How long will a bankruptcy last on my credit report?
A: Up to ten years.
4. Q: Will all my debts be dischargeable?
A: Most, but not all debts can be discharged in bankruptcy. Some debts that are frequently not discharged are most student loans, most tax debts, child or spousal support, and fines and penalties imposed by the state. It’s important to consult a skilled attorney to make sure as much of your debt as possible is discharged.
5. Q: Will I be able to keep my car or house?
A: Usually certain types of property you are making payments on such as a car or house is a secured debt. That is, the creditor holds a security interest in the property and if you don’t pay it they can repossess the property. If you are making payments on secured property you will probably need to continue doing so even after filing for bankruptcy if you wish to keep it.
6. Q: Are there alternatives to bankruptcy?
A: Yes. One option is to negotiate with your creditors. Often times creditors are willing to take significantly less money on a debt that is owed. If you try this approach it is strongly recommended you have an attorney to negotiate with your creditors. Our office does provide this service. Many organizations promise credit repair and remedies with your debt but don’t deliver. We will negotiate your debt professionally and expeditiously.
7. Q: Will I be able to get credit after filing bankruptcy?
A: In most cases the answer is yes, but at least in the short term you may be charged higher interest rates.
8. Q: Do I have to take any classes to qualify for a bankruptcy?
A: Yes. There is a brief credit counseling class that must be taken before you file for bankruptcy as well as a debtor education class that is required after you file. These classes are not complicated, and fees are usually just $50.
9. Q: I’ve heard of a new law recently passed, will I still be able to get a bankruptcy under this new legislation?
A: In October of 2005 Congress passed new bankruptcy legislation: The Bankruptcy Abuse Prevention and Consumer Protection Act. On the whole, it has made bankruptcy more complicated and time consuming for the average individual. For example, under a new criteria called “means testing” if your income is too high it may mean you no longer can file a
Chapter 7 but must instead file a Chapter 13. Fortunately, even under the new law most people are still able to file a
Chapter 7 and get all their debt wiped out. This new law has made it more important than ever to seek competent counsel to organize and prepare your bankruptcy.
10. Q: What if I can’t make plan payments in my
Chapter 13 bankruptcy?
A: In some cases the bankruptcy trustee may modify
your plan, such as if you temporarily are out of
work. The modification will often take the form of a
reduction in monthly payments or extension of the
pay period. In other cases the Chapter 13 can be
dismissed or converted over to a Chapter 7.