Question 1

What is bankruptcy?

Accepted Answer

Bankruptcy is the process where individuals can repay some or all of their debt or eliminate their debt under the protection of the Federal Bankruptcy Court. Bankruptcies are basically divided into two types – reorganization and liquidation.

Question 2

What is the cost of bankruptcy?

Accepted Answer

Bankruptcy costs typically include filing fees that are paid to the court and attorney’s fees. The total cost will largely depend on your financial situation, the complexity of your case, and whether you file Chapter 7 bankruptcy or Chapter 13 bankruptcy. What we always encourage our potential clients to do is set up a free appointment to come in and meet with one of our bankruptcy attorneys so they can go over your specific situation in detail with you and layout all of your options.

Question 3

Can my wages be garnished?

Accepted Answer

If a judgment has been obtained against you, and you have not filed bankruptcy, your wages can be garnished. A judgment can be issued after you have been served with a lawsuit and you failed to defend your case or a judge ruled against you after trial. However, judgments can never be obtained against you or your wages can never be garnished once you file bankruptcy as long as those debts are listed in your bankruptcy petition.

Question 4

How do I stop creditors from harassing me?

Accepted Answer

By law, all collection actions against a debtor must cease once bankruptcy is filed. Creditors cannot garnish your wages, make collection phone calls, or continue or initiate any lawsuits.

Question 5

Are there benefits to filing bankruptcy?

Accepted Answer

Yes. Bankruptcy stops all creditor harassment, lawsuits, and garnishments. After filing for bankruptcy, most people no longer have the worry, stress, or anxiety that is caused by creditors harassing you and the debt you can no longer afford.

Question 6

Can I finance a car after filing for bankruptcy?

Accepted Answer

Yes. Essentially, it can be easier to qualify for a car loan after you file for bankruptcy because your debt to income ratio has decreased and you have more income to pay for the new car loan.

Question 7

Do you have to be unemployed to file for bankruptcy?

Accepted Answer

No. You can be gainfully employed and file for bankruptcy.

Question 8

If I am married, do both my spouse and I have to file for bankruptcy?

Accepted Answer

No. There is no requirement that married couples file jointly. If one spouse has manageable debt and a decent credit record, and the other is responsible for most of the debt it may be in your best interest for only one to file. Filing bankruptcy by one spouse should have no effect on the other spouse’s assets or credit rating as long as there are no joint assets or debts.

Question 9

Will I lose my vehicle if I file bankruptcy?

Accepted Answer

No. You may be able to use bankruptcy laws to keep your vehicle in your possession if you are behind on payments. Chapter 13 bankruptcy may allow you to pay your vehicle loan through the bankruptcy plan. An automatic stay in bankruptcy will stop repossession, and this goes into effect as soon as your case is filed. Exemptions can also protect your vehicle.

Question 10

Is there a minimum amount of debt required to file for bankruptcy?

Accepted Answer

No. There is no minimum debt amount to be eligible to file for bankruptcy.

Question 11

Does a Chapter 13 bankruptcy require full repayment of debt?

Accepted Answer

No. In most cases, you will only be repaying cents on the dollar. The remaining balances owed to creditors will be wiped out as long as the plan is paid in full.

Question 12

Will I lose my retirement savings?

Accepted Answer

No. Usually you can claim them exempt due to the 2005 amendments to the Bankruptcy Code if they have not yet become part of your estate.

Question 13

Will everyone know that I filed for bankruptcy?

Accepted Answer

Under normal circumstances, no one will know that you filed for bankruptcy. However, bankruptcy filings are public record.

Question 14

How long will bankruptcy remain on my credit report?

Accepted Answer

Bankruptcy will remain visible on your credit report for up to ten years.

Question 15

Will I lose all of my assets if I file for bankruptcy?

Accepted Answer

No. A debtor filing for bankruptcy is allowed to keep certain assets by exempting property from the bankruptcy estate, as stated in the Bankruptcy Code.

Question 16

Can I get credit after filing for bankruptcy?

Accepted Answer

Yes. You can regain credit after you file for bankruptcy. Many people have improved credit after filing because they were able to start fresh.

Question 17

Can you include tax debt in your bankruptcy plan?

Accepted Answer

Yes. Certain tax obligations may be dischargeable or managed in your bankruptcy plan.

Question 18

Will I be able to rent an apartment or house after bankruptcy?

Accepted Answer

Yes. Landlords are mostly interested in your past rental history and your present income than whether or not you have filed for bankruptcy.

Bankruptcy FAQs

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