Friday, February 27, 2015
Bankruptcy – Frequently Asked Questions
Are you considering filing for Chapter 7 bankruptcy protection? Below are answers to some frequently asked questions. If you can’t find the answer to your questions here, feel free to visit our bankruptcy page or contact our office.
Q: What is Chapter 7 bankruptcy?
A Chapter 7 bankruptcy can be filed by individuals or businesses and is known as a “liquidation bankruptcy” where you discharge your debts. You can reaffirm debts on your house, car, or other property you need.
You are generally allowed to retain certain types of property classified as “exempt” under the bankruptcy laws such as clothes, vehicles, tools/equipment used for work, and household furnishings. If you do not own much property, all of your possessions could be found to be exempt which would qualify you for a “no asset” bankruptcy case.
Q: How much does a Chapter 7 bankruptcy cost?
Fess charged by lawyers for bankruptcy filing vary, so shop around for the best price with a reputable bankruptcy attorney. Make sure the law firm you hire meets with you, handles your case, and goes to court with you. Fees can range from $700 – $1,200 and court costs are $300 – $375. Call bankruptcy attorney Flora Templeton Stuart at 888-782-9090 for more information.
Q: Am I eligible for a Chapter 7 bankruptcy?
Several factors determine your eligibility for a Chapter 7 bankruptcy including your income and amount of debt you have. If you have filed for bankruptcy before, you must wait 8 years before filing again. An experienced Chapter 7 bankruptcy attorney can help you determine if you are eligible to file.
Q: Will filing for Chapter 7 bankruptcy erase all my debt?
There are different categories of debt and only some types of debt are dischargeable under Chapter 7 bankruptcy.
Chapter 7 bankruptcy can remove debt such as:
credit card debt
Chapter 7 bankruptcy will not remove debt such as:
most unpaid taxes
DUI judgments, punitive damages, and other criminal fines
Q: What is the difference between secured and unsecured debt?
Generally, “secured debt” is a claim that is secured by a type of property (such as with a mortgage), an agreement between you and the creditor, or an involuntarily arrangement as with a court judgment or taxes. With secured debts, creditors can take property to pay off the debt when you file for bankruptcy. On the other hand, unsecured debt is not tied to property and creditors cannot claim your property if you file for bankruptcy.
Q: Will Filing for bankruptcy stop harassing creditor phone calls?
Yes, creditors are required to stop contacting you as soon as your bankruptcy petition is filed. At that point, collectors must communicate with your bankruptcy attorney. If your petition has been filed but you are still receiving creditor calls, contact your bankruptcy attorney immediately.
Q: What is the process for filing for Chapter 7 bankruptcy?
When filing Chapter 7 bankruptcy through our office, you will meet with our staff and attorneys before you go before the court. The first meeting is a basic informational meeting where we will discuss all the information we need from you in order to complete your bankruptcy. You will receive paperwork to fill out and a list of other documents we need from you for the second meeting. You will also be directed to complete mandatory credit counseling courses. These courses can be completed online or over the phone.
During the second meeting, you will need to bring in all the requested documents and paperwork. One of our bankruptcy staff members will review all the information and prepare you for the third meeting where your bankruptcy petition will be completed and filed with the court – stopping garnishment and collection calls.
Your court date to finalize the bankruptcy is typically within about 6 weeks of the date the petition is filed. At that time you will attend a hearing and go before the trustees to have your debts discharged. Contact us if you have questions about filing for Chapter 7 bankruptcy with our office. We have offices in Bowling Green and Glasgow, Kentucky to better serve our clients.
Q: If I file for Chapter 7 bankruptcy, will I lose my house?
When filing for Chapter 7 bankruptcy, many things are considered when property is involved including the value of the property, the equity involved, the amount owed on current loans, and if you have fallen behind on your payments. The main consideration regarding your home is can you actually afford the property? The court will generally not sign off for a person or family to keep a home that is too expensive for them. After all, the purpose of filing for bankruptcy is to free you from the stress of having more bills than your income will cover. Maintaining possession of a property you can not afford will not help the financial situation of your family. Each person’s situation is different, and an experienced Chapter 7 bankruptcy lawyer can evaluate your case and help you determine if your home may be liquidated as part of a bankruptcy filing.
Q: If I file for Chapter 7 bankruptcy, will I lose my retirement accounts?
In most cases, retirement and pension accounts such as 401k, IRA (ROTH, SIMPLE, SEP), and defined benefit plans are protected in Chapter 7 bankruptcy filings. Contact a bankruptcy attorney experienced with Chapter 7 filings to learn more.
Q: If a credit card company is suing me, can Chapter 7 bankruptcy help me?
In most cases, yes, you will be able to discharge your unsecured credit card debt in a Chapter 7 bankruptcy. If you have received a complaint from your credit card company, it is very important to contact an experienced bankruptcy lawyer immediately to avoid garnishment or liens.
Q: How long does a Chapter 7 bankruptcy stay on my credit report?
Generally, a bankruptcy will stay on your credit report between seven and ten years. While there is nothing you can do to remove the bankruptcy before that time is up, you can file an explanation describing the circumstances leading up to your bankruptcy with the reporting agencies.