Filing bankruptcy comes with a lot of questions. These are some of the most commonly asked questions about the bankruptcy process.
To get specific answers to your questions, speak with a local bankruptcy lawyer. For a free case evaluation with a bankruptcy attorney near you, complete the free form below now and get the answers to your questions about bankruptcy.
Chapter 7 bankruptcy, also known as "liquidation," is a legal process by which most unsecured debts can be discharged, or wiped out. Chapter 7 bankruptcy is known as liquidation because any non-exempt assets the debtor has may be liquidated (sold) by the trustee for the benefit of creditors.
Many Chapter 7 bankruptcy debtors have no non-exempt assets, and so there is no liquidation, and unsecured debts are simply discharged. There are, however, certain unsecured debts that are not dischargeable in Chapter 7 bankruptcy.
To file for Chapter 7 bankruptcy, you must qualify under the Chapter 7 means test. The means test first compares your income to the median income in your state. If your income is lower than the median income in your state, you can file for Chapter 7 bankruptcy.
However, if your income is greater than the median income in your state, other calculations regarding your income and allowable expenses are required to determine whether or not you can file for Chapter 7 bankruptcy.
Chapter 7 bankruptcy may eliminate debt under the U.S. Bankruptcy Code.
Chapter 7 bankruptcy may be a good option for people who are facing lots of unsecured debt, such as medical bills or credit card debt and have few assets.
Among other benefits, filing Chapter 7 bankruptcy may:
For more information on Chapter 7 bankruptcy, talk to an attorney today.
Chapter 13 bankruptcy is a full or partial repayment plan administered by the bankruptcy court. The debtor submits a plan for approval and, when a plan is approved, makes monthly payments to the bankruptcy trustee. The trustee makes payments to creditors in accordance with the terms of the plan.
The repayment period may be from 3-5 years. At the end of the repayment period, if all payments have been made according to the plan, remaining unsecured, dischargeable debt may be discharged.
In one sense, it's easier to qualify for Chapter 13 bankruptcy than for Chapter 7 bankruptcy. There's no means test for Chapter 13 bankruptcy, and some debtors who cannot qualify for Chapter 7 bankruptcy opt to file under Chapter 13 bankruptcy instead.
However, Chapter 13 bankruptcy requires a regular income that will allow you to create a budget and make predictable and reliable payments to the trustee.
A Chapter 13 bankruptcy can stop mortgage foreclosure and other repossessions.
Chapter 13 bankruptcy is often a good option for people who are facing short-term financial setbacks, such as a job loss or illness. It also may be a good choice for someone who is suddenly faced with unexpected expenses.
In short, a Chapter 13 repayment plan can silence creditors through an automatic stay and give a person the chance to repay their debts in three to five years after the bankruptcy filing.
For more information, please visit Total Bankruptcy's Chapter 13 bankruptcy section.
The answer to this question depends on your specific circumstances. Generally speaking, Chapter 7 bankruptcy is better for people who have a lot of unsecured debts, like credit card debt and medical bills.
If you don't have much property, your income is low, and most of your debts are unsecured, you might want to consider Chapter 7 bankruptcy. Chapter 13 bankruptcy, on the other hand, tends to be a better option for those who have regular income and non-exempt property they'd like to keep.
A local bankruptcy attorney can review your specific financial circumstances and advise you as to which type of bankruptcy protection might be best for you.
Deciding to file bankruptcy is a major decision. You'll want advice from a bankruptcy lawyer who knows the bankruptcy laws-especially if you have assets that you want to protect from seizure.
When looking for a bankruptcy attorney, it's a good idea to select a lawyer who concentrates in that area of law. Bankruptcy laws also vary from state to state, so a local bankruptcy lawyer could be of great assistance to you. You'll also probably want someone who is upfront, honest and can help guide you through the whole bankruptcy process.
Total Bankruptcy has a network of sponsoring bankruptcy lawyers who are ready to talk to you-for free and with no obligation. Connect to a bankruptcy attorney by filling out our free bankruptcy evaluation form on this page.
For more information on finding a bankruptcy lawyer and the bankruptcy process, please visit Total Bankruptcy's section on Filing Bankruptcy.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) was passed by Congress and signed into law by President George W. Bush on April 20, 2005. Since then, there have been various amendments and exemptions to the law.
Although this new bankruptcy law has prevented some people from being able to file bankruptcy, most people are not turned down from filing bankruptcy protection.
The biggest change the BAPCPA brought was that now there are additional bankruptcy requirements for people seeking bankruptcy (like the debtor education course and credit counseling briefing). A debtor must complete the requirements in order to have a successful bankruptcy.
A bankruptcy lawyer can help you decide if the new bankruptcy law would affect your case.
Bankruptcy can be an effective way to regain control and tackle mounting debt. Many people find that their credit scores improve not too long after they file bankruptcy.
Filing bankruptcy can leave an impact on a person's credit, but the effect may not actually be that severe. Many people who file bankruptcy already have lousy credit, and filing bankruptcy allows them to wipe the slate clean rather than continuing to have dozens of accounts in collection.
But you should also know that most types of bankruptcy will stay on your credit report for a period of at least ten years. (In some cases, the time period can be reduced.) During that time, it may negatively affect your credit.
But bankruptcy can also provide you with a chance to "start fresh" and rebuild your credit.
Keep in mind that how your credit will be affected will depend on a number of factors, such as where your credit level is at today and which type of bankruptcy you file.
Co-signers can be protected in certain bankruptcies. If you are concerned about protecting your co-signers, a bankruptcy lawyer may be able to help you determine which bankruptcy filing is best for you.
In general, if you decide to file Chapter 7 bankruptcy, creditors are still able to proceed with collection efforts against your co-signers-even if you were let off the hook for the debt.
However, if you file Chapter 13, a co-signer is protected if the following provisions are met:
You should note that if you fail to complete the requirements of your Chapter 13 repayment plan, the creditors have the legal right to pursue your co-signers.
It's important that you choose a qualified bankruptcy lawyer to handle your case-especially when third parties such as co-signers are involved.
Total Bankruptcy has an nationwide network of sponsoring bankruptcy lawyers who are willing to answer your questions. Connect to a bankruptcy attorney - for free and with no obligation - by calling 877-349-1309 or by filling out our a free online bankruptcy evaluation form.
Under Chapter 7 bankruptcy, a debt discharge eliminates debt.
That's right-the Chapter 7 debt discharge releases a debtor from personal liability for his or her debts. That means that the debtor never has to pay those debts off.
There are requirements to who may be eligible to file Chapter 7 bankruptcy. A bankruptcy lawyer may be able to help you decide if you qualify for Chapter 7 bankruptcy and if it's the right debt solution for you.
For more information, visit Total Bankruptcy's Chapter 7 bankruptcy section.
As you may already know, creditors can be persistent and annoying.
You should know that you may have the power to silence them!
Should you decide to file bankruptcy, you can silence your creditors and reclaim your phone, voicemail and mailbox. This is because a bankruptcy filing results in a court order called the automatic stay, which makes it illegal for creditors to attempt to collect on your debt.
For more information, ask an attorney about your case.
The above summary is not legal advice. Laws may have changed since our last update. For the latest information on bankruptcy laws, speak to a local bankruptcy lawyer in your state.