Bankruptcy Common Questions And Video's
Frequently Asked Questions About Bankruptcy
What is Bankruptcy?
Bankruptcy is a Consumer Protection law designed to help you get back on your feet. Can I Stop Wage Garnishments? Yes. Wage garnishments will stop immediately upon filing for bankruptcy. Can I Rent a House or Apartment? Yes. There are many rental agencies that rent to people who have recently filed for bankruptcy. Is my pension, IRA, or 401(k) safe? Generally 100% of your pension, IRA, or 401(k) is safe. Is Bankruptcy Confidential? All communications with your Bankruptcy Attorney are 100% confidential. Can I Keep My Car / House / Personal Property? Bankruptcy is designed to help you get a fresh start while protecting your car / house / personal property. That means that in many cases you can become debt free while keeping your car, house, and personal property. Remember, bankruptcy is designed to help you get back on your feet. Will I have Credit After Bankruptcy? Yes. According to most attorneys many of their clients have their credit back on track in about 6 months after filing for bankruptcy. In fact, some people report that they are able to buy a car about 6 months after bankruptcy and buy a house about 1-2 years after bankruptcy. Remember that you will be getting a fresh start debt-free, so many times your credit is better a few months after bankruptcy than it was before. What About Debt Consolidation Programs? Many people who participate in Debt Consolidation programs report that they pay way too much money, their credit is ruined while the consolidation payments are being made, and that they could have made the payments directly to creditors without paying costly fees. In general Debt Consolidation programs are not a good idea and end up costing you much more than you expect. Bankruptcy, on the other hand, is Federal Law that gives you a fresh start and is much more powerful (and often more affordable) than any Debt Consolidation program. Does Bankruptcy Affect My Spouse / Significant Other / Co-signer? No. Your bankruptcy discharges you of your personal debt. Another way to think of this is that your name is erased from your debts. So, if you have a spouse / significant other / co-signer, that person is not affected and their name simply stays on the debt. A good example of this is when you have a car with a co-signer. If you file bankruptcy, your co-signer stays on the car loan as normal. The co-signer can then continue to pay for the car and keep the car. How Long Can I Stay In My House Without Paying a Mortgage? This depends on the bank but usually ranges anywhere from 3 months to 2 years or more. Some attorneys state that they have had clients who have reported living in their homes for over 2 years without ever paying a mortgage payment. How Quickly will my Debts be Erased? A Chapter 7 Bankruptcy case generally takes 8-10 weeks for a discharge, which is when your debts would be erased. Am I Allowed to Have a Bank Account While Filing for Bankruptcy? Yes. You are encouraged to live a healthy, normal life while filing for bankruptcy. Bank accounts are protected under exemption law. In some instances you can have several thousands of dollars in your bank account and have the funds be fully protected. Can I Travel While Filing for Bankruptcy? Yes. Simply let your lawyer know your expected dates of travel and accommodations can be made. You will need to be present for your 341 Meeting of Creditors, but much of the rest of the process can be completed while you travel. What Information do I need to File for Bankruptcy? You will need information about your debts and assets. As a start, you should gather: 3 years of tax returns, 6 months of paychecks, 6 months of bank accounts, and your recent bills. What is the timeline for a typical bankruptcy filing? 1. Meet with an experience bankruptcy attorney to discuss your income, expenses and assets to determine if bankruptcy is the best course of action to stop the stress and burden of unmanageable debt. A bankruptcy consultation with an experienced licensed attorney, should be free of charge. After the consultation, if you decide that bankruptcy is the best course of action, then most attorneys will request a small retainer fee to get started on your court case and to represent you in bankruptcy court. 2. Once you have retained an attorney you may be asked to pay the remainder of the attorney fees. Then you will be asked to provide your attorney with all of the documents they need to draft your petition for bankruptcy. They should provide you with a list of the documents that they will need in order to file your case. 3. You may also be asked to complete a Credit Counseling Course (On-line with follow up phone call) with an approved provider. If so, the Credit Counseling Course must be completed before the bankruptcy case can be filed. 4. After that once an attorney has all of the documents, it generally takes 10 – 14 days to draft a completed and accurate petition. After the petition is complete they will schedule an appointment for you to review and sign the completed petition, Chapter 13 filings, and your Chapter 13 payment plan. Note, an emergency filing (which some request to immediately stop a garnishment or foreclosure), can be filed the next day. You have 10 days from the date of filing to get all other documents in. 5. The petition will then be filed with the court and the automatic stay will take effect stopping any and all collection action including foreclosures, lawsuits, repossessions, garnishments and levies. Note, for Chapter 13 clients, you MUST ensure the trustee receives your Chapter 13 monthly payment within 30 days of your filing date. You must pay the trustee by certified check or money order. The trustee will send a letter with instructions and the mailing address. You will continue to make these payments directly to the Trustee until your wage-order has been processed and the payments are automatically deducted from your check. In addition, your mortgage payment and any other payments scheduled to be paid outside of your Chapter 13 Plan, also must be paid within 30 days of your filing date, and must continue to be paid on time. If you fall behind on either your Trustee, Car or Mortgage payments, the creditor or Trustee may file a Motion to Lift Stay, your protection will be jeopardized and your case dismissed. Chapter 13's are VERY strict financial budgets. There are great rewards (home saved from foreclosure, drastic reduction in unsecured debt, including stripping your second mortgages) BUT it requires great discipline over a 3-5 year period. You must take your plan payments and all other requirements very seriously and ensure they are fulfilled to achieve your financial goals. 6. The next step is to provide any additional documents that the trustee assigned to your case may require. These documents are due at least seven days prior to the date of the meeting of the creditors. The meeting of the creditors is the only appearance you have to make and is usually scheduled approximately 30 – 45 days after the bankruptcy case is filed. Your attorney will appear with you and the trustee assigned to your case will ask you a series of questions under penalty of perjury. You will receive notice of the 341 hearing in the mail directly from the bankruptcy court. 7. Section 341 meeting of the creditors is attended and concluded. 8. You now must complete the second course, Financial Management (On-line with follow phone call) from an approved provider. 9. YOU HAVE NOW SUCCESSFULLY completed all the steps necessary to discharge your unmanageable debt under a Chapter 7 filing and receive a fresh start. The bankruptcy court will enter the order discharging your debts in approximately 60 – 90 days after the conclusion of the Section 341 meeting of the creditors. 10. For Chapter 13 filings, you next have to get your Chapter 13 Plan confirmed. Most often, there will be changes required by the trustee from your 341 Meeting of the Creditors. These changes are made prior to your confirmation hearing, which you must attend. All changes, trustee payments and, if applicable, mortgage payments and any other payments schedule to be paid outside of the Plan must be current in order for your Plan to be current. ________________________________________________________________________________________________ Acknowledgement: It is always advised that anyone filing for bankruptcy should contact a professional licensed attorney who specializes in the field of bankruptcy law. Housing 4 Now is not a licensed bankruptcy counseling agency, and the information provided here is a public service and for educational purposes only. It is not intended for legal advice. |
Filing For Bankruptcy - Video #1
Bankruptcy Basic's - Video #2
Types Of Bankruptcy - Video #3
Bankruptcy Crime - Video #4
Bankruptcy Limits - Video #5
Bankruptcy Legal Assistance - Video #6
Bankruptcy The Court Hearing - Video #7
Bankruptcy Creditors Meeting - Video #8
Bankruptcy The Discharge - Video #9
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