Common Questions About Bankruptcy

Our attorneys recognize that filing for bankruptcy can be a difficult decision, but we work hard to help you regain financial stability.

Below are a few questions we frequently hear from our clients:

• What Is bankruptcy?

  • Bankruptcy is when an individual or business legally declares an inability to pay outstanding debts. It provides a solution to debt by allowing debtors to repay their creditors through liquidation (Chapter 7) or reorganization (Chapter 13). It allows debtors to have a fresh start and regain financial stability over time.

• Will Filing For Bankruptcy Erase All My Debts?

  • A bankruptcy filing will not eliminate all debts. There are certain debts that cannot be forgiven under bankruptcy, such as child support, alimony, and most student loans. It also cannot stop secured creditors from foreclosing or repossessing property.

• How Do I Know Which Chapter Of Bankruptcy To File For?
  • Each financial situation is unique. Therefore, you need to be familiar with your options. Our experienced bankruptcy attorneys can assist you in filing for the bankruptcy most suitable to your circumstance.
• What Assets Will I Lose If I File For Bankruptcy?
  • 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 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.In Chapter 13, you do not lose 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.
• Can I File For Bankruptcy More Than Once?
  • Yes, you may file for bankruptcy more than once. However, if your debts were discharged in a previous bankruptcy, you must wait a certain amount of time before you may file again. Whether or not you can file another bankruptcy and receive a discharge depends on:
    • the type of bankruptcy you filed previously and wish to file now;
    • whether your previous bankruptcy was discharged, dismissed, or dismissed with prejudice, and;
    • when you filed the previous case
• What Is The Main Difference Between Chapter 7 And Chapter 13?
  • Chapter 7 bankruptcy, also called “liquidation bankruptcy”, is ideal for individuals who do not have a stable income and whose debt is mainly unsecured. Most unsecured debts, such as credit cards and medical bills, can be discharged through Chapter 7, with the exception of some taxes, fines, and student loans.Chapter 7 will allow an individual to retain “exempt” property such as a home, cars, personal property, and retirement funds while liquidating assets deemed “non-exempt” by the court and using those funds to repay creditors.In contrast, Chapter 13 bankruptcy is ideal for those with a stable income because it allows them to pay their disposable income to their creditors over the course of a three- to five-year repayment plan. Instead of liquidating assets, it allows for a reorganization of debts.

If you have further questions regarding bankruptcy, please do not hesitate to contact our attorneys. We will assist you in any way that we can.