Bankruptcy FAQ

Do you tell everyone to file bankruptcy?

No. We give you an honest evaluation of your case and do not tell anyone to file. We simply present the pros and cons of filing and then proceed based on your decision. We are forthcoming about letting you know about certain circumstances where you should either wait to file or not file at all.

Creditors keep calling. Do I have to file to make it stop?

Filing bankruptcy will force creditors to stop calling because of the automatic stay. However, you might be able to stop creditor phone calls before you file after you have retained our services. Third party collectors will have to honor your request to re-direct phone calls to our office under the Fair Debt Collections Practices Act (FDCPA). Original creditors might also honor your request.

Who is the panel trustee?

The panel trustee is appointed by the court to oversee your case and is usually an attorney. The trustee holds your creditors meeting, aka 341 hearing. It is the trustee’s duty to confirm your assets and liabilities, and makes any distribution of your assets to creditors, if applicable. In a Chapter 13, the debtor makes monthly payments to the trustee, and the trustee then distributes it among creditors.

I am currently being garnished. Can a bankruptcy stop that?

Absolutely. Filing stops all creditor actions, including collecting on judgments won against you before your filing. Additionally, in most cases we can also get rid of any liens based on that judgment as well.

Do I need a lawyer to file bankruptcy?

An individual or married couple can file without an attorney, which is known as filing “pro se.” However, it is our opinion that no one should file without an attorney, as bankruptcy law can be complex. While you may know enough to get a discharge, without a good experienced attorney you might stumble into some pitfalls along the way.

What will bankruptcy do to my credit?

A Chapter 7 will remain on your record for 10 years. A chapter 13 will remain on your record for 7 years. Most likely if you are considering bankruptcy you already do not fall into the category of a great credit risk, so you are already borrowing with higher rates as is. While filing will not help your credit, it can significantly change your debt to income ratio so that soon you might be a much better credit risk than you are currently.

I own a business. Does my business have to file also?

No. However, filing only for your business will not relieve any of your personal debts, including those debts shared with the business.

Is the trustee going to come to my house and take my stuff?

The trustee will not show up at your place unannounced. In fact, usually you will not see the trustee except for a single encounter in court at the 341 meeting. However, the trustee has the right to investigate your assets to confirm their value. As long as you are honest about your assets and have nothing to hide, the trustee is not someone to be scared of.

My house is being foreclosed soon. Can a bankruptcy stop that?

Yes. Filing a bankruptcy will immediately halt a foreclosure sale. Depending on the situation with your arrears and which chapter you file under, the creditor might file a “motion to lift stay” to still proceed with the foreclosure. But at a minimum your filing will stop a foreclosure sale for at least several months.

Can I keep my retirement plan?

Almost without exception, the answer is yes.

When I file, do I have to list all of my assets and all of my liabilities?

Yes, you have to list everything you own and everyone you owe. Do not assume you will lose all your property, in fact you might not lose anything. Also remember you can always voluntarily repay any creditor after the bankruptcy anyway, so you should not feel hesitant about listing your debts.

What are your attorney fees for filing a bankruptcy?

Fees range based on the complexity of the case, and we cannot give you a quote until we sit down with you and review the particulars of your case. All chapter 7 fees must be paid prior to filing the case, whereas a Chapter 13 fee can be partially paid prior to filing, with the remainder paid through the plan.

How can I determine if I am eligible for a Chapter 13?

Any individual with regular income is eligible to file a chapter 13; however, if the debtor filed a chapter 7 within the previous 4 years and received a discharge the debtor will not receive a chapter 13 discharge.

If I qualify for a chapter 7, is there any reason I would still want to file a chapter 13?

Sure, some reasons that debtors who qualify for a chapter 7, but still file a chapter 13, include: (1) the debtor wants to retain more property than the allowable exemption limits and would have to forfeit that property in a 7, so the debtor chooses to keep the property and pay off the excess over time in a 13 (2) The debtor is sufficiently behind on the mortgage and car payments and cannot pay off the arrears immediately, as would be required in a chapter 7, so chooses to pay off the arrears over time in a 13 (3) the debtor wants the protection of the bankruptcy court while it pays off its debts over time