FAQs

Chapter 7 is the most well known bankruptcy. Chapter 7 allows you to discharge your legal financial obligations to creditors. This means creditors are prohibited from imposing garnishments, levies, law suits, phone calls, or any other collection actions against you, because you no longer have a legal obligation to pay the debt. However, certain debts are non-dischargeable, such as student loans, certain taxes from a specific time period (taxes due within 3 years), alimony and support payments, criminal restitution, and debts for death or personal injury caused by driving intoxicated from alcohol or drugs.

Chapter 13 is designed for persons with regular income who were temporarily unable to pay their debts, but would like to pay them in installments over a period of time. Chapter 13 is typically used by consumers who have substantial disposable income, or persons who have fell behind in their mortgage and/or vehicle payments and is faced with foreclosure or repossession, and these individuals would like to retain these properties. Under a Chapter 13, you must file a plan with the court to repay your creditors, using future earnings. The repayment period is usually three years, but no longer than five years. After completion of payments to your plan, your debts will be discharge, except for long term secure obligation, such as mortgage and vehicle loans, student loans, alimony and support payments, criminal restitution, and debts for death or personal injury caused by driving intoxicated from alcohol or drugs.

Chapter 11 is primarily designed for business reorganizations. Although, this Law Firm do not provide this service, we will recommend you to a law firm that do.

QUESTIONS COMMONLY ASKED BY PROSPECTIVE BANKRUPTCY CLIENTS:

1. Where Should a Bankruptcy Case be Filed?

In the jurisdiction where the person resided or maintained a principle place of business for the greater portion of the last 180 days.

2. Who is Eligible to File  a Chapter 7 Case and Maintain a Chapter 7 Case?

This office will file a Chapter 7 case for any person who resides in, does business in, or has property in the United States may file a Chapter 7 case, except a person who has filed a Chapter 7 case within 8 years and has received a discharge, a person who has committed certain fraudulent acts, or has intentionally dismissed a prior bankruptcy case within the last 180 days. In order for a person to maintain a Chapter 7 case, that person must demonstrate that there is no disposable income that is sufficient in amount to pay off a substantial portion of his or her debts within a reasonable period. Disposable income is net income after the payment of the necessary living expenses of the debtor and his or her dependents.

3. May a Husband and Wife File a Joint Chapter 7 Case and Under What Circumstances?

Yes. Although, a husband and wife do not have to file together, a husband and Wife should file together, if both of them are liable for one or more substantial dischargeable debts. If both are liable for a substantial debt and only one files a Chapter 7 case, the creditor may later attempt to collect from the non-filing spouse.

4. What if You Want to Repay a dischargeable Debt?

You are not prohibited from repaying as many dischargeable debts as desired. By repaying these debts, you are not obligated to pay the other debts.

5. How Does a  Discharge Affect Co-Signers?

A discharge only releases the person(s) who filed the case. The liability of the debt to the co-signer, remains.

6. Do I Lose My House and/or My Vehicle if a File a Chapter 7 Case?

Typically, so long as you are current on your mortgage and/or vehicle payments and maintain insurance, you may be able to keep your house and/or vehicle.

7. How Does a Chapter 7 Filing Affects a Person’s Credit Rating?

If you have a good rating, it will worsen it. However, if you have a very derogatory rating, it may help it, because some financial institutions solicit persons who have filed a Chapter 7 case, because they know that person is unable to file another Chapter 7 case for another eight years. In addition, if there are some compelling reasons that led to your filing, such as illness or divorce, some credit rating agencies make take that into account in rating your score.

8. Will it be Difficult to Obtain Future Employment or Will I Lose My Current Job?

No, the law is clear that employers are barred from discriminating against persons who have filed a bankruptcy case.

9. What are the Typical Steps to Filing a Chapter 7 Case and Obtaining a Discharge?

a. You first schedule an appointment with our office.

b. At your first appointment, you should bring a copy of your last tax return filed, proof of income for the past 6 months for example, pay stubs or documents relating to retirement or disability income, and also bring a copy of deeds to property owned in the last 3 years. In addition, you should bring to your first appointment, documents evidencing your debt obligations.  You may also provide us with a copy of your credit report to supplement the above mentioned documents.

c. In addition, at your first appointment, you will fill out a bankruptcy questionnaire in which we will review with you and determine if you are eligible tofile a bankruptcy case.

d. You will come back to the office within 1 to 2 weeks to sign your bankruptcy papers that are prepared by this office. These papers will be filed in court within a few days after all necessary signatures are obtained.

e. Approximately, a month after the filing of your case, a meeting of creditors will be held, which typically last 2 to 3 minutes, because creditors normally do not appear at the meeting.

f. Approximately, 3 months after the meeting of creditors is held, your Chapter 7 discharge papers will be mailed to you by the court.

10. What are the Typical Steps to Filing a Chapter 13 Case and Completing a Chapter 13 Case?

a. You first schedule an appointment with our office.

b. At your first appointment, you should bring a copy of your last tax return filed, proof of income for the last 6 months for example, pay stubs or documents relating to retirement or disability income, and also bring copy of deeds to properties owned in the last 3 years. In addition, you should bring to your first appointment, documents evidencing your debt obligations.  You may also provide us with a copy of your credit report to supplement the above mentioned documents.

c. In addition, at your first appointment, you will fill out a bankruptcy questionnaire in which we will review with you and determine if you are eligible to file a Chapter 13 case.

d. You will come back to the office within 1 to 2 weeks to sign your bankruptcy papers that are prepared by this office. However, in emergency situations, you will come back the next day to sign bankruptcy short forms to stop a pending foreclosure of a house, or to halt a repossession or sale of a vehicle.

e. After your case is filed, you are required to pay all secured creditors on time, on the scheduled due date. Secured creditors are creditors who have a lien against property you own, such as houses, vehicles, and personal property (e.g., furniture, jewelry, etc.). In addition, you are required to commence plan payments to the bankruptcy trustee one month after the chapter 13 plan is filed in court.

f. Approximately, a month after the filing of your case, a meeting of creditors will be held, which typically last 3 to 5 minutes. At this meeting, the bankruptcy trustee reviews your bankruptcy papers and inquire as to whether you can afford to pay your regular necessary monthly living expenses, plus plan payments.

g. Approximately 3 months after your meeting of creditors, a confirmation hearing will be held. At this confirmation hearing, the Bankruptcy Judge reviews your Bankruptcy filings. If everything is in order and you are current on plan payments, your Chapter 13 plan payments will be confirmed by the Bankruptcy Judge without you appearing to court.

h. After you have funded your plan payments within the subscribed plan payment period, you will receive a Chapter 13 discharge and your case will be closed.