Q: What is Bankruptcy?
A: Bankruptcy is a legal process that makes it possible to eliminate unsecured debt (credit cards, medical bills) while keeping necessary assets (House, car, personal belongings). Bankruptcy can be filed by a person or a company. Bankruptcy also makes it possible to repay past-due debt owed for secured loans (mortgages, car loans) through a payment plan.
Q: What is Chapter 7 Bankruptcy?
A: A Chapter 7 bankruptcy is filed to eliminate unsecured debt. Chapter 7 can be filed by a person or a business to wipe out credit cards, medical bills, or loans that are not secured by assets.
Q: Can I file bankruptcy electronically?
A: A lawyer can file a bankruptcy electronically using a dedicated account and specialized software.
Q: Do I have to attend the court if I file bankruptcy?
A: Yes, after filing bankruptcy there is a mandatory meeting that requires personal attendance.
Q: How does a bankruptcy repayment plan work?
A: The simple calculation is total arrears spread out for 60 months of payments. For example, $30,000.00 in arrears translates to a $500 monthly payment (for a 5-year repayment plan). These figures are very rough estimates and the calculation is based on any/all debts that will be repaid.
Q: What are the benefits of filing bankruptcy?
A: In general, benefits of bankruptcy include: stopping foreclosure, eliminating debt, eliminating medical bills, eliminating personal loans, eliminating IRS debt more than 3 years old, stopping wage garnishment, stopping collection calls, eliminating judgments, stripping a 2nd or 3rd lien (HELOC), stopping collection calls, saving a home or car from repossession by the bank, re-paying missed mortgage or car payments to catch up in a repayment plan, re-establishing and improving credit.
Q: What happens after I file Bankruptcy?
A: In general terms, there is a period of time for all parties to clear up any disputes about debt that will be eliminated, and after that period of time passes, the debt will be wiped out (discharged). Upon discharge, no further claims can be made to collect any debts that were eliminated.
Q: Can bankruptcy improve my credit score?
A: Yes, bankruptcy often has a positive impact on a credit score, resulting in an immediate boost at the time of filing.
Q: When will my bankruptcy be discharged?
A: Discharge from Chapter 7 bankruptcy usually occurs within 6-12 months from the date of filing (depending on the location of filing). Discharge from Chapter 13 bankruptcy usually occurs within 3-5 years from the date of filing, depending on the length of the repayment plan.
Q: What debts can be eliminated with bankruptcy?
A: In general, filing bankruptcy eliminates credit card debt, medical bills, personal loans, and IRS debt more than 3 years old, as well as stopping wage garnishment, stopping collection calls, and eliminating judgments. Chapter 13 can be filed to strip a 2nd or 3rd lien (HELOC).
Q: Will I lose all my assets and properties if I file bankruptcy?
A: Filing bankruptcy does not result in losing all assets. Filing bankruptcy protects assets such as home equity, retirement savings, the primary home, the primary vehicle, and household goods.
Q: What are the negatives of filing for bankruptcy?
A: Filing bankruptcy will result in the cutting off credit cards, and it will make it difficult to qualify for a major purchase (such as a home or car) for a period of one year or more. Government employees may also be affected in their employment, and many employers ask whether applicants have filed for bankruptcy in the past.
Q: How to file for chapter 7 bankruptcy?
A: o file for Chapter 7 bankruptcy you can contact a bankruptcy attorney within your state. For those that live in California, you can contact us and we will evaluate your case for free.
Q: What is chapter 13 bankruptcy?
A: Chapter 13 is bankruptcy is filed to eliminate unsecured debt and to repay secured debt and other debt obligations in a payment plan. Chapter 13 can be filed by a person or a business to wipe out credit cards, medical bills, or loans that are not secured by assets. In some cases, Chapter 13 is may also be used to eliminate unsecured home loans or second mortgages. This is what is commonly referred to as a lien strip. As a rule, in order to file Chapter 13 bankruptcy, the court requires proof of income sufficient to pay the monthly mortgage, any car loans, all monthly expenses plus a plan payment [to catch up on past due to secured debt obligations.
Q: How does chapter 13 work?
A: Chapter 13 is similar to Chapter 7 as far as eliminating unsecured debt. It is different with respect to repaying debts such as a mortgage or car loans. Most people choose to file Chapter 13 when they have fallen behind on mortgage or car payments and they want to start repaying while catching up on the past due payments [in a 3-5 year payment plan]. As a rule, in order to file Chapter 13 bankruptcy, the court requires proof of income sufficient to pay the monthly mortgage, any car loans, all monthly expenses plus a plan payment (to catch up on past due secured debt obligations). Chapter 13 also makes it possible to strip a second lien (as long as it is not secured) such as a HELOC or a 2nd mortgage.
Q: When to file bankruptcy? When to declare bankruptcy? How to claim bankruptcy?
A: Most individuals and companies choose to file bankruptcy in order to stop harassment from creditors and relieve extreme pressure. Common examples: foreclosure sales, collection lawsuits, wage garnishment, IRS claims (3+ years old), car repossessions, and evictions. Upon filing bankruptcy a creditor must immediately stop any/all efforts to collect their claim and answer to the court to continue with their efforts while abiding with the bankruptcy code. In general, it is best to declare bankruptcy when the pressure from creditors is too much to handle or there is legal action pending that will cause the loss of a home, car, or wages.
Q: How to apply for bankruptcy?
A: Filing bankruptcy involves a series of steps: from completing the required forms to going to court and appearing before a judge. The most important step is to make sure that you accurately disclose all debts and liabilities to the court and to make sure that your assets will be protected from creditors.
Q: How to file bankruptcy?
A: In order to file bankruptcy, there are forms that the court requires and specific information that must be provided. The forms must be completed with accuracy and detail and all debts and assets must be disclosed. When filing the forms at the court, a filing fee must be paid and all forms must be completed in a timely manner or the court will dismiss the case.
To file bankruptcy it is best to contact a bankruptcy attorney within your state. For those that live in California, you can contact us to evaluate your case.
Q: How much does bankruptcy cost?
A: Bankruptcy legal fees generally range from $800 for a simple individual Chapter 7 up to $4500 for a complex Chapter 13, plus additional filing fees that are paid directly to the court. There are services that prepare forms for those inclined to save legal fees, but the process can be intimidating for those who do not want to spend money on a lawyer, and many people who file without a lawyer lose the many benefits of chapter 7 or chapter 13 filing. As a rule, Chapter 11 requires a lawyer and a much more expensive legal fee.
