Common Bankruptcy Questions

Common Bankruptcy Questions

  1. Is there more than one type of bankruptcy?

Yes, there are several types of bankruptcy. Most individuals however need only concern themselves with a chapter 7 or a Chapter 13. The latter bankruptcy is basically a repayment plan that allows you as an individual to keep property and pay all or part of your debts over a 3-to-5 year period. The repayment plan gives you relief from the pressure of creditors. While a chapter 7 is a liquidation plan whereby the goal is to walk away from your debts without paying any money to your creditors.

  1. Who can file for bankruptcy?

Both Chapter 7 and Chapter 13 bankruptcies have very specific requirements in terms of income and amount of debts. You should talk to a knowledgeable bankruptcy lawyer to find out if you qualify.

  1. Is there a filing fee involved?

Yes. Chapter 7 filing fee is currently $335.00. Chapter 13 bankruptcy filing fee is $310.00.

  1. Can I keep my home or Car?

Whether you can keep your car or home depends on the specifics of your financial situation. Most people are able to keep their vehicle by reaffirming the debt. Some people have been able to keep their homes by getting a loan modification along with the bankruptcy filing.

  1. Will bankruptcy get rid of Child Support and/or Alimony?

These payments are not affected by bankruptcy and must continue as ordered.

  1. What about my student loans?

Student loans are generally not dischargeable unless to you can prove undue hardship.

  1. What about taxes and government penalties?

Taxes are generally not dischargeable unless they are from generally speaking 2 years prior to your bankruptcy filing and you properly filed your taxes for each of the year involved.

  1. How long do I have to wait between chapter 7 bankruptcy filings?

You need to wait 8 years between Chapter 7 filings.

  1. Can I change from one bankruptcy to another?

Yes. You can convert your case one time to another chapter that you are eligible for. For example, you can move from a chapter 13 to a 7.

  1. What do I need to need to begin the bankruptcy process?

Collect all your debts and a list of all your assets.

  1. Can my co-signor be held responsible even if I file bankruptcy?

Yes. If someone else co-signed one of your loans the lender may go after that person even if you file for bankruptcy. Please be very mindful of this fact.

  1. What is a reaffirmation agreement?

It’s an agreement that once you sign on requires you to pay your debts even if those debts would have been dischargeable in bankruptcy. The reaffirmation agreement is often used when someone wants to keep a vehicle.

  1. How long does bankruptcy stay on my credit report?

Bankruptcies generally stay on your credit report for 7 or 10 years.

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