Southside Law Office bankruptcy lawyers can provide you with answers to all of your bankruptcy questions. To assist you in some quick answers to common questions, please review the following:
What sorts of problems can’t bankruptcy solve?
There are certain types of debts that are called “secured debts”, such as loans that you took out to purchase your home and car. A bankruptcy cannot get rid of these debts. If you want to keep your home and car, you must continue making the payments. But if you don’t want to keep the property, bankruptcy can still eliminate your liability on the debt.
Child support, alimony, student loans, restitution orders, criminal fines, and recent taxes will not be discharged in a bankruptcy. You must pay these things.
A bankruptcy also will not protect any co-signers on the debts you plan to discharge in bankruptcy. If a guarantor or a co-debtor is named on any of the debts you plan to discharge in bankruptcy, he or she will still be liable on the debt even after your bankruptcy.
Can I own anything after bankruptcy?
A bankruptcy allows you to keep what is called “exempt property.” For virtually all of our clients, this includes everything they own. Clients are able to keep their homes and their cars as long as they stay up to date on their payments. After the bankruptcy is over, you can purchase or acquire anything.
There are two main exceptions to these rules of thumb:
- If you receive an inheritance within 180 days after you file your case, your inheritance will become part of the bankruptcy estate and the money will be used to pay off your creditors. The dates that are important are 1) the date the individual who left you the inheritance died and 2) the date of your bankruptcy filing.
- Life insurance generally is not included in the bankruptcy estate. But this depends on the type of life insurance you have and what its value is. One of our attorneys would have to look at the specifics of your policy to determine if it is entirely excluded from the bankruptcy or not.
Will filing bankruptcy affect my credit?
In many cases, people who need to file bankruptcy already have an imperfect credit score. Your credit report most likely already contains reports of late payments and shows money owed to creditors. A bankruptcy will change that to reflect zero balances on most of those accounts that currently list late payments. The bankruptcy itself will be reported and remain on your credit report for up to 10 years, but most of our clients have a much better credit score within two years of filing for bankruptcy.
How long will a bankruptcy take?
A typical Chapter 7 case takes about three months. About 20-40 days after your bankruptcy petition is filed, there will be a meeting that you are required to attend. The meeting is called a 341 meeting of the creditors. At this meeting, you will respond to the questions of a bankruptcy trustee. The meeting is usually not very long.
If you are filing a Chapter 7 bankruptcy, there will be a 60 day period after this 341 meeting during which creditors can object to your debts being discharged in bankruptcy. If there are no objections during this 60 day period, then usually 7 days later you will receive your bankruptcy discharge. This means your case is done.
A Chapter 13 bankruptcy may take up to five years, or until you complete your plan.
If you are filing a Chapter 13 bankruptcy reorganization plan, you will be put on a three to five year payment plan. Your case stays open during this period, and after you successfully make all of your payments, then your bankruptcy case will be closed, or completed.
Do I have to go to court?
You will have to go to court, or at least the courthouse. Generally, people who file for bankruptcy only have to appear once in front of a bankruptcy trustee. You will be under oath during this appearance, so you need to tell the truth. You can wear your normal clothes.
How often can I file bankruptcy?
If your debts were not discharged in a previous bankruptcy filing, there is no time period you have to wait to file again. For example, if your chapter 13 case was dismissed, you can refile without a waiting period, but we recommend legal advice before doing this.
If your debts were discharged in a previous bankruptcy, the time you have to wait depends on the facts of your last bankruptcy. Call 414-482-8000 to speak with an attorney regarding your options.
Will I lose my house or my car in bankruptcy?
Bankruptcy law does place limits on how valuable a house or car can be and still be protected from creditors. But in most cases, our clients are able to keep their house and cars.
If you are filing a Chapter 7 bankruptcy where you discharge most of your debts, your house and car are generally protected or “exempted,” which means you can keep them.
However, if you owe money on your home or car, and want to keep them, you must stay current on your mortgage and car payments, and also the insurance. If you are behind in your mortgage or car payments, a Chapter 13 bankruptcy can force the bank to give you time to catch up on the payments and get current.
What are the most common mistakes in bankruptcy?
- Not listing all of your debts.
- Not listing all of your assets.
- Not appearing at your 341 meeting of creditors
- Hiding assets or trying to get around the rules.
Do I have to file bankruptcy on all of my debt?
Yes, you have to list all of your debts. However, you can always reaffirm a debt if you have a good reason. Reaffirming a debt means that you agree that you will pay the debt, or that the debt will remain, even though you are filing bankruptcy. Additionally, nothing stops you from repaying any debt you want except you must do it in the following order:
- List ALL of your debts on your bankruptcy petition;
- File your bankruptcy petition;
- THEN pay back whatever debts you choose.
If you follow these steps, the individuals you pay back will not have to get involved in your bankruptcy proceeding, and they will get to keep the money you repaid them. We suggest you speak with us for a complete plan of action.