Should I file bankruptcy?
Whether or not you should file bankruptcy depends on your particular circumstances. It may be that after consultation with an accountant and attorney,
you resolve your financial difficulties through other means. In some cases, declaring bankruptcy may be necessary. The decision to file for bankruptcy
is a serious one.
How long will my bankruptcy show on my credit record?
The Fair Credit Reporting Act, 6 U.S.C. Section 605, is the law that controls credit reporting. The law states that credit reporting agencies may not
report a bankruptcy case on a person's credit report after ten years from the date the bankruptcy case is filed. Other bad credit information is removed
after seven years. The larger credit reporting agencies belong to an organization called the Associated Credit Bureaus. The policy of the Associated
Credit Bureau is to remove Chapter 11 and Chapter 13 cases from the credit report after seven years to encourage debtors to file under these
chapters. The bankruptcy court has no influence over these reporting policies.
What is the difference between Chapter 7, 11 & 13 cases?
Chapter 7 - Liquidation: This chapter of the U.S. Bankruptcy Code provides for an orderly court-supervised means of selling certain assets to pay your
creditors. In a Chapter 7 case, a trustee is appointed to take charge of your "estate" consisting of all your assets. The law may allow you to keep some
of your property. The trustee will sell the rest to pay your creditors. Unless someone objects, some or all of your debts will be discharged within a few
months after the bankruptcy petition is filed.
Chapter 11 - Reorganization: This Chapter of the U.S. Bankruptcy Code is available to individuals, businesses and other entities, but is primarily
intended to allow an ongoing business to restructure its debts. Successful reorganization is dependent on the debtor filing what is called a
"reorganization plan" and obtaining the acceptance of creditors and approval by the court for such a plan.
Chapter 13 - Adjustment of Debts for an Individual with Regular Income: This Chapter of the U.S. Bankruptcy Code provides a court-supervised
method for a debtor to pay back creditors over a period of time of up to five years. The debtor files a plan for repayment with the bankruptcy petition or
soon thereafter. Payments must begin within thirty days after the case has begun. The payments are made to a trustee who will begin paying the
creditors after the plan has been approved by the court.
What information do I need to file a bankruptcy?
· Home address
· Social Security Number
· Employer's name and address
· Salary and wage information
· A list of all those to whom you legally owe money
· A list of all your major property (for example: real estate, automobiles, boats, furniture, etc.)
· A list of all your personal sources of income
· A list of all your financial accounts (for example: checking and savings accounts, savings bonds, etc.)
· A list of all your monthly expenses (for example: rent, food, child support, transportation, etc.)
· A copy of your federal and state tax returns for the past two years.
When am I under bankruptcy protection?
You are under bankruptcy protection when and after your petition is filed and a case number is assigned. The moment a petition is filed there exists
an automatic stay, or suspension, of virtually all litigation and other action by creditors against the debtor or the debtor's property. In other words, once
a petition has been filed, creditors cannot commence or continue most legal actions, such as foreclosure of liens, execution on judgments, trials,
(garnishments), or any action to repossess property in the hands of the debtor. Creditors can, however, seek to have the court allow them to pursue
or continue legal collection actions.
Will filing bankruptcy stop my wages from being garnished?
Yes, once you file bankruptcy, you are under protection of the court from most creditors. You should immediately notify the garnishing creditor and
sheriff that you have filed a bankruptcy petition.
Is my bankruptcy case public information?
Yes, bankruptcies are considered public record. Anyone may call the court and verify if you have filed bankruptcy or may come into our offices and
review the file.
Are all of my debts canceled by the Bankruptcy Court?
No, certain debts are not canceled by the US Bankruptcy Court. Examples include taxes, school loans, debts resulting from fraud, alimony and child
support payments. Other debts are canceled only if your petition is approved by the US Bankruptcy Court.
When will I get my discharge?
Individual debtors are eligible to receive their Chapter 7 discharge 60 days from the date set for the 341 meeting, unless a creditor objects in a timely
manner or the court orders otherwise. In the normal case where no complaint objecting to the discharge is filed, the debtor will receive a discharge
within five working days after the 60 days has passed.
Will all of my creditors be notified of my discharge?
All creditors who were listed on your mailing matrix or who entered an appearance in your case will be notified.
When will my case be closed?
Since all cases bear unique circumstances, it is difficult to pinpoint an exact time that your case will be closed. Many chapter 7 no asset cases are
closed within 90 days from filing if no disputes have arisen. Chapter 7 asset cases require that the trustee liquidate the assets which often takes
several years. Chapter 13 cases remain open as long as the plan payments are being made, generally for three to five years after the plan has been
confirmed. Chapter 11 reorganization cases are more complicated and may remain open longer than three years even if a plan has been confirmed.