Frequently Asked Questions About Bankruptcy

Q. I heard the Bankruptcy laws changed. Can I still file for bankruptcy?
A. Yes! Bankruptcy is still here and still available.

Q. What is Bankruptcy?

A. Bankruptcy is a legal proceeding where a person who is having problems paying bills can eliminate or reorganize those bills. They are given a “Fresh Start” on their financial life. The federal government created this right and all bankruptcy matters are conducted in federal court.

Q. What can Bankruptcy do for me?
A. Bankruptcy can stop creditor harassment, eliminate your bills and give you a fresh start. Bankruptcy can also help you save your home or car if you are behind and help you keep or get your driver’s license back.

Q What are the different Chapters?
A. Put simply. Chapter 7 is an elimination of your bills, Chapter 13 is a repayment plan, Chapter 12 is for family farmers and Chapter 11 is a repayment plan for businesses and for a few people that have extremely large debt. Most people file either Chapter 7 or Chapter 13.

Q. What is Chapter 7?
A. Chapter 7 is a liquidation or elimination of your bills and is the most common form of bankruptcy filed.

Q. What kinds of bills can I get rid of in a Chapter 7?
A. Chapter 7 eliminates unsecured debts like credit cards, medical bills, payday loans, repossessions, judgments and broken leases.

Q. What kinds of bills can’t I get rid of in a Chapter 7?
A. Debts owed to the government like parking tickets, most student loans, most taxes, overpayment of benefits and debts like back due child support. Also, there are certain debts that are not discharged in a bankruptcy which your lawyer can explain to you if necessary.

Q Can I keep my house and/or my car in a Chapter 7?
A. Yes, as long as they are up to date on your loan and you don’t have a lot of equity in them.

Q. What is Chapter 13?
A. Chapter 13 is a repayment plan that helps you to reorganize your bills based on your income.

Q Why would I file a Chapter 13 and not a Chapter 7?

A. You typically file a Chapter 13 if (1) you are behind on a house or a car and you want to keep it, (2) you recently filed a Chapter 7 and can’t file another one, (3) you are making too much money to file a Chapter 7 or (4), you have some kind of property that would not be protected in a Chapter 7.

Q. How much will my Chapter 13 payments be?
A. Each Chapter 13 is a unique plan based on your income, your expenses, your bills, the type of bills they are and several other factors, so each person’s payment is different.