FAQ’s

Family Considering Bankruptcy

Bankruptcy is provided for in the United States Constitution. It is a way for honest folks who find themselves in impossible debt situations to cancel (“discharge”) most debts in order to get a fresh start with a clean slate. Bankruptcy requires only that you act honestly and make full disclosure of your assets and debts. It involves no guilt or shame to you; your personal dignity will be in no way compromised by the bankruptcy process.

Category: Bankruptcy FAQ's
Did you find this FAQ helpful?
0
0

Bankruptcies for individuals and small businesses fall within two categories: Chapter 7 and Chapter 13. There are other types of bankruptcies for family farmers or fishermen (Chapter 12), for large business (Chapter 11), and (rarely used) for railroads and municipalities.

Category: Bankruptcy FAQ's
Did you find this FAQ helpful?
0
0

Chapter 7 is the most common, most popular kind of bankruptcy—often called “straight bankruptcy.” It’s what most people think of when they think of bankruptcy. Chapter 7 is often the easiest and least expensive way for people to achieve a fresh start. Basically, Chapter 7 quickly allows folks to wipe out their unsecured debts such as credit cards, medical bills, vehicle deficiency claims, and personal loans. You may ordinarily retain your residence and vehicles provided you are current on your vehicle and mortgage payments. Chapter 7 does not discharge student loans, court fines, domestic support, and most taxes.

Category: Bankruptcy FAQ's
Did you find this FAQ helpful?
0
0

A Chapter 13 bankruptcy, often called a “wage-earner plan” or “debt consolidation,” involves your participation in a minimum 36-month payment plan where you repay a certain percentage to your unsecured creditors (you may think of Chapter 13 as a “partial bankruptcy.”) As more is involved in Chapter 13 than a straight bankruptcy, folks normally only file under this Chapter if they have a problem that is not solved by a Chapter 7.

In Chapter 13 cases, which last from 3 to 5 years, we propose a monthly payment plan to the Court. The amount of your payment and the length of the Plan depend on the type of debts you have and your income. Fortunately we have great experience in the Chapter 13 process which permits us to come up with a Plan that will be both affordable to you and acceptable to the judge. We rely on our long relationships with the Court and the Chapter 13 Trustee to create smooth sailing through this process.

The aim of Chapter 13 is to give you a payment that you can afford that repays only a portion of your debts. At the conclusion of your case, the remainder of your unsecured debts are discharged (canceled). Chapter 13 can prevent a foreclosure and permit you to catch up on back house payments. It can lower most vehicle payments. It can discharge certain types of debts not dischargeable in Chapter 7, particularly certain taxes. As to debts that cannot be discharged, Chapter 13 can still protect you from creditor harassment or lawsuits while permitting you to pay the nondischargeable debts over the course of your Plan. While Chapter 13 is more involved than Chapter 7, it can solve many problems beyond the scope of a straight bankruptcy.

Category: Bankruptcy FAQ's
Did you find this FAQ helpful?
0
0

Although bankruptcy is not good for your credit, generally individuals who file Chapter 7 can obtain credit within a few months after completing their case. Many credit card and loan companies will see you as less of a risk since (a) you cannot file another Chapter 7 for eight years and (b) you have eliminated all of your other creditors leaving you debt-free. Rebuilding your credit is really just a matter of (a) keeping your job, (b) having a stable address, (c) paying all current debts on time, (d) saving money regularly which shows you are in control of your finances, and (e) making responsible use of the credit that you do incur.

Category: Bankruptcy FAQ's
Did you find this FAQ helpful?
0
0

In bankruptcy you must list all creditors to whom you owe money (aside from your living expenses that you pay off every month). You cannot pick and choose which credit cards to list. Generally most credit card companies will close your account.

Category: Bankruptcy FAQ's
Did you find this FAQ helpful?
0
0

Bankruptcy will not discharge child support or alimony, court fines, or recent taxes. Other nondischargable debts include intentional injury, injury caused while driving drunk or debts involving theft, fraud, or embezzlement. Student loans are nondischargable except in very narrow circumstances. Some debts (such as orders to pay money in domestic cases other than for support) are nondischargable in Chapter 7 but can be discharged in Chapter 13.

Category: Bankruptcy FAQ's
Did you find this FAQ helpful?
0
0

Student loans, whether government or private, are generally nondischargable unless you can show that repaying the loan would result in undue hardship (very rare). Unfortunately, lenders will aggressively oppose any attempt to discharge a student loan, which would make the attempt very expensive.

Category: Bankruptcy FAQ's
Did you find this FAQ helpful?
0
0

Load More