Bankruptcy FAQs

Will filing for bankruptcy stop harassing phone calls from bill collectors?

Yes. Upon filing bankruptcy under any chapter of the United States Bankruptcy Code, an "automatic stay" goes into effect that will immediately get all creditors off your back. Creditors, including collection agencies and attorneys, are then required to immediately cease all further communication with you and may not take any further action to collect a debt from you.

What property might I lose if I file for bankruptcy? Will I lose my home?

One of the biggest worries you may face in considering filing for bankruptcy is the possible loss of your home. Although there are a few situations where you may lose your home, keep in mind that bankruptcy is not designed to put you out on the street.

In Chapter 13, you lose no property, but rather file a repayment plan with the bankruptcy court to pay back your debts over time. While your Chapter 13 plan is in effect, your creditors cannot contact you, sue you or repossess or foreclose on any of your property. Chapter 13 allows you to catch-up on delinquent mortgage and motor vehicle payments.

In Chapter 7, you are allowed to keep all of your "exempt" assets. In most cases, this includes everything you own. However, if you owe money on your home or motor vehicle and want to keep these assets, you must reaffirm these debts and keep making your regular payments or, alternatively, you must pay the creditor the "fair market value" of the property.