|
|
 |
|
|
|
Frequently Asked Questions |
|
|
|
| | | |
|
-
-
FREQUENTLY ASKED QUESTIONS:
1. How do I know which type of bankruptcy is right for me? You should talk to an experienced attorney who can advise you concerning the differences between each type of bankruptcy and who can look at your specific situation and compare your options.
2. What is an asset? An asset is anything you own or have a right to own now or in the future (for instance, you are included in somebody’s will). Your home, automobiles, household furnishings, retirement plans, etc., are all assets. In most cases, your assets can be protected from liquidation from the Trustee.
3. Which debts are discharged? Credit card bills, service providers, repossession deficiencies, business debts, leases, medical bills, unsecured personal loans, and non-priority taxes that are more than three years old and you have filed returns for those years, are, in most cases, dischargeable debts.
4. Which debts are not discharged? In Chapter 7, debts incurred by fraud, intentionally harmful actions, dishonesty, as well as priority taxes (less then three years old). Family support, student loans and criminal fines and restitution cannot be discharged. In Chapter 13, only family support, student loans, drunk driving judgments, and criminal restitution are non dischargeable.
5. How soon after filing a bankruptcy can I file another one? You cannot file another Chapter 7 bankruptcy until six years have passed from the date you filed the previous bankruptcy. You can file a Chapter 13 bankruptcy with no time limits after a Chapter 7 bankruptcy is discharged, but there are certain repayment requirements.
6. Do I have to list all of my debt? You must by law list all of your assets and all of your debts under any of the chapters of bankruptcy. However, you can voluntarily repay any of your debts or you can reaffirm a debt.
7. What is a reaffirmation? A reaffirmation is an agreement to waive the discharge as to the reaffirmed debt and to pay the debt according to the terms of the original agreement. If you default on a reaffirmed debt, the creditor can take any legal means necessary to collect the debt as before your bankruptcy.
8. What if I owe money for my car and furniture? If you have any debt that is secured by collateral such as your car and furnishings (and your home), you have to stay current on these loans or surrender the collateral. In a Chapter 13 your plan of repayment can include these debts, but in a Chapter 7 you need to continue to pay voluntarily or reaffirm with the creditor if you wish to keep the collateral.
9. Do I continue to pay my 2nd mortgage? Your mortgages are secured by a lien against your home and you must continue to pay these loans if you want to keep your property. In a Chapter 13 bankruptcy, however, it may be possible to “strip” a junior lienholder if there is no equity above what you owe the senior lienholder.
10. Will I continue to receive bills and statements for the items I want to keep? Usually not. By law, creditors cannot demand payment on any of your debts after you file bankruptcy. However, you can pay voluntarily to your creditors and they cannot take possession of any item if you are current on your payments.
11. Are student loans dischargeable? Most student loans are difficult to discharge. You must prove extreme hardship in repaying the loan now or in the future, and it is rarely granted.
12. Is my retirement pension protected? In most cases, your retirement is exempt from liquidation from the Trustee. However, in some cases, only what is reasonable and necessary for your family’s support can be protected. It depends on the type of retirement plan you have and the exemption that is used.
13. What if I cannot continue to make my Chapter 13 payments to the Trustee? The Chapter 13 Trustee will dismiss your case if you fall behind with your payments. If you are not self-employed, it’s possible to request the Trustee have the payments automatically deducted from your payroll check. The Trustee does not send you a bill, but you will get periodic status reports of the payments the Trustee is making to your creditors.
14. What if I fall behind with my monthly mortgage payments or car payments after I file a Chapter 13 bankruptcy? Your mortgage company or auto creditor can file for relief from the automatic stay if you are not current with your payments after you file your bankruptcy and they can continue foreclosure or repossess your vehicle. You must continue to make your payments on time after you file your bankruptcy.
15. How is my credit affected after I file a bankruptcy? A bankruptcy stays on your credit report for 10 years. However, because you cannot file another Chapter 7 bankruptcy for six years, creditors know they don’t have that risk and receiving credit shouldn’t be very difficult. However, you will not get as high a credit limit or be able to borrow a large sum of money right away, but you will be able to rebuild your credit over time.
16. Can I sell my home or buy a new car while I am in a Chapter 13 bankruptcy? During an active Chapter 13 bankruptcy, you cannot sell any asset or take on any new debt without prior permission from the Court.
17. Why should I pay more for an attorney when a paralegal can prepare my paperwork for less money? A paralegal may be an inexpensive way to file your bankruptcy, but they cannot practice law and are prohibited from giving legal advice. They are not as knowledgeable in bankruptcy law and don’t always know the necessary questions to make sure your paperwork is filled out correctly. Your assets are your most precious commodity and you should not leave them in the hands of an inexperienced and unknowledgeable person and possibly lose them. Also, a paralegal cannot represent you in Court if the need should arise.
|
| | | |
-
-
A bankruptcy is a chance to make a “fresh start” and is a first step towards your entire financial future. This site only touches on some of the basic questions and answers you may have concerning bankruptcy. Your first step should be to call an experienced bankruptcy attorney to advise you on the best options in your particular case and who can answer your questions in detail.
|
| | | |
| | | |
|
|
|
