• What is a Chapter 7 Bankruptcy?
• What is a Chapter 13 Bankruptcy?
• What is a Chapter 11 Bankruptcy?
• Who can file a Chapter 7 Bankruptcy?
• Is it true that I can wipe out all my bills?
• What are the most common reasons for a Chapter 7 Bankruptcy?
• Can I stop the bill collectors from calling?
• How long after I file will the creditors stop calling?
• I am married; does my spouse also have to file bankruptcy?
• Will I lose my job?
• Can I go to jail if I file bankruptcy?
• Will my employer find out about my bankruptcy?
• What happens to my personal property, real property and other assets?
• Can I keep my home and personal property?
• Can I keep my automobile?
• Can I keep my credit cards?
• What is a reaffirmation agreement?
• Will bankruptcy stop a wage attachment?
• Will bankruptcy stop a foreclosure?
• Will bankruptcy stop an eviction, Òunlawful detainerÓ action?
• Will bankruptcy stop a judgment?
• Will bankruptcy remove a lien?
• I am divorced; will bankruptcy wipe out my obligation to pay community debts?
• I am a cosigner for a debt; how does bankruptcy affect my obligation?
• Who notifies the creditors and bill collectors?
• Are there any debts that I cannot wipe out in bankruptcy?
• Do I have to fill out forms?
• Do I have to go to Court?
• What happens after I file bankruptcy?
• Who deals with the creditors and bill collectors during the bankruptcy?
• What if I forget to list a creditor on my bankruptcy papers?
• What is a discharge?
• What happens to my credit rating after bankruptcy?
• After bankruptcy, can I get credit?
• How do I re-establish my credit after bankruptcy?

What is a Chapter 7 Bankruptcy?
In a Chapter 7 Bankruptcy, a Trustee is appointed to take over your property. Any property of value will be sold or turned into money to pay your creditors. You may be able to keep some personal items and possibly real estate, depending on the law of the state you live in.

What is a Chapter 13 Bankruptcy?
You can usually keep your property in a Chapter 13, but you must earn wages or have some other source of regular income and you must agree to pay part of your income to your creditors. The Court must approve your repayment plan and your budget. A Trustee is appointed and will collect the payments from you, pay your creditors, and make sure that you live up to the terms of your repayment plan.

What is a Chapter 11 Bankruptcy?
Chapter 11 Bankruptcy is filed primarily by businesses or other organizations. Also, individuals who have large debts in excess of a million dollars may consider filing Chapter 11. Chapter 11 provides for more flexibility in arranging payment plans, but is also much more expensive with regard to legal fees and operating expenses. If you have questions with regard to whether you should file a Chapter 11, be sure you contact our attorneys to discuss how a Chapter 11 can be of benefit to you.

Who can file a Chapter 7 Bankruptcy?
You must reside or have a domicile, a place of business, or property in the United States or a municipality. You must not have been granted a Chapter 7 discharge within the last eight (8) years or have completed a Chapter 13 plan. You must not have had a bankruptcy filing dismissed for cause within the last 180 days. It must not be a Òsubstantial abuseÓ of Chapter 7 to grant the debtor relief. Generally speaking, if after you pay the monthly expenses for necessities there is not enough money to pay the remaining monthly debts, then granting a discharge would not be an abuse of Chapter 7.

Is it true that I can wipe out all my bills?
The underlying policy of bankruptcy law is that the honest debtor who is in debt beyond his/her ability to repay the debt should be given a fresh start through the discharge of debts in a bankruptcy proceeding. Not all debts are dischargeable. Generally speaking, the following debts will not be discharged: taxes, spousal and child support, debts arising out of willful misconduct and/or malicious misconduct by a debtor, liability for injury or death from driving while intoxicated, nondischargeable debts from a prior bankruptcy, student loans, criminal fines and penalties and forfeitures. Those debts which are secured will be discharged; however, expect the creditor to take the necessary legal steps to take back the property. In most cases, if the debtorÕs equity interest in the property is exempt, the debtor may retain the property by redemption or reaffirmation.

What are the most common reasons for a Chapter 7 Bankruptcy?
The most common reasons for consumer bankruptcy are: unemployment, large medical expenses, seriously over-extended credit, marital problems and other large unexpected expenses.

Can I stop the bill collectors from calling?
One of the major benefits of filing for protection under Chapter 7 is that many creditor actions are stayed. This means that debt collection efforts and foreclosures are halted.

How long after I file will the creditors stop calling?
Once a creditors or bill collectors become aware that you have filed for bankruptcy protection, they must stop all efforts to collect the debt. After your bankruptcy is filed, the Court mails a notice to all the creditors listed on your schedules. This usually take a couple of weeks. If this is not soon enough, you should have your representative inform the creditor immediately. If creditors continue to use collection tactics once informed of the bankruptcy, they may be liable for court sanctions and attorney fees for this conduct.

I am married; does my spouse also have to file bankruptcy?
No. In some cases where only one spouse has debts, or one spouse has debts that are not dischargeable, then it might be advisable to have only one spouse file. In cases where real property is involved, the question regarding a joint bankruptcy is beyond the scope of this FAQ; please consult an attorney.

Will I lose my job?
No. Bankruptcy laws prohibit discrimination based upon a debtor filing for protection under bankruptcy law.

Can I go to jail if I file bankruptcy?
No. There are no debtor prisons in the United States.

Will my employer find out about my bankruptcy?
Under normal circumstances, unless your employer is a creditor, your employer will not know.

What happens to my personal property, real property and other assets?
Once the bankruptcy is filed, all the property of the debtor at the time of the filing, and certain other property to be received in the future, becomes the property of the bankruptcy estate. This means that the bankruptcy Trustee will take control of this property for the purposes of satisfying the creditors. HOWEVER, there is certain property which is either excluded or exempt and the debtor will be able to keep it.

Can I keep my home and personal property?
In most cases it is possible to keep your home and your personal property. Depending on what state you live in, there are exemption statutes that provide the ability to protect all or most of your assets from your creditors. If you have significant assets, pre-bankruptcy planning can usually be arranged to protect those assets. You should discuss all of your assets with your attorney who can provide a strategy for you to keep your assets before you file your bankruptcy.

Can I keep my automobile?
In most cases you are able to keep your automobile. Unless you own a very valuable automobile such as a Mercedes Benz or Lexus, most automobiles are protected in a bankruptcy filing. Be sure to discuss this with your attorney before you file the case.

Can I keep my credit cards?
Under some circumstances you may keep your credit cards. There are many factors which must be considered. Some of those include the credit card balance at the time of the bankruptcy, what the credit card company is willing to do and your ability to pay the present and future credit card debt.

What is a reaffirmation agreement?
Even if a debt can be discharged, you may have special reasons why you want to promise to pay it. For example, you may want to work out a plan with the bank to keep your car. To promise to pay that debt, you must sign and file a reaffirmation agreement with the Court. Reaffirmation agreements are under special rules and are voluntary. They are not required by bankruptcy law or by any other law. Reaffirmation agreements must be: (1) voluntary, (2) must not place too heavy a burden on the debtor or his/her family, (3) must be in the debtorÕs best interest, and (4) can be canceled any time before the Court issues a discharge or within 60 days after the agreement is filed with the Court, whichever gives the debtor the most time. If you are an individual and you are not represented by an attorney, the Court must hold a hearing to decide whether to approve the reaffirmation agreement. The agreement will not be legally binding until the Court approves it. If you reaffirm a debt and then fail to pay it, you owe the debt the same as though there was no bankruptcy. The debt will not be discharged and they creditor can take action to recover any property on which they have a lien or mortgage. The creditor can also take legal action to obtain a judgment against you.

Will bankruptcy stop a wage attachment?
Yes.

Will bankruptcy stop a foreclosure?
Yes. However, a home is an asset usually secured by a Deed of Trust. The lender is entitled to apply to the Court for relief from the automatic stay (the Order preventing creditor action by virtue of bankruptcy). Depending upon several factors, you may be able to prolong a foreclosure until you have received your discharge from bankruptcy. Usually, to keep a home that is in foreclosure, you will have to make a deal with the lender.

Will bankruptcy stop an eviction, "unlawful detainer" action?
Perhaps. However, this will only delay the inevitable. The owner is entitled to possession of the property and at best you will be able to remain in the property until you have received your discharge from bankruptcy or the landlord/owner obtains an order from the bankruptcy court. If the only reason you file a bankruptcy is to stop an eviction, then this might be considered an abuse of Chapter 7. If the bankruptcy court finds that this is true, then the court can immediately dismiss the bankruptcy and impose other legal and monetary sanctions on you.

Will bankruptcy stop a judgment?
Yes. Most civil judgments are stopped by bankruptcy.

Will bankruptcy remove a lien?
Under some circumstances, once the bankruptcy proceedings have started, a special motion can be filed to remove certain liens. It will take a bankruptcy court order to remove them. This is a complicated area of the bankruptcy law and you should consult an attorney.

I am divorced; will bankruptcy wipe out my obligation to pay community debts?
In general, you will not be discharged from all dischargeable community debts.

I am a cosigner for a debt; how does bankruptcy affect my obligation?
If the debt is dischargeable debt, then you will not have to pay it. However, the cosigner will become primarily responsible for the debt. Be sure to list the cosigner as a creditor in your schedules, as he/she has a contingent claim against you.

Who notifies the creditors and bill collectors?
After you file bankruptcy, the Court mails a notice to all creditors listed in your schedules. This usually take a couple of days. If this is not soon enough, you should have your representative inform the creditors immediately.

Are there any debts that I cannot wipe out in bankruptcy?
Yes. There are certain debts that are NOT dischargeable in bankruptcy. Generally speaking, the following debts will not be discharged: taxes, spousal and child support, debts arising out of willful misconduct and/or malicious misconduct by the debtor, liability for injury or death from driving while intoxicated, nondischargeable debts from a prior bankruptcy, student loans, criminal fines and penalties and forfeitures. Those debts which are secured will be discharged; however, expect the creditors to take the necessary legal steps to take back the property. In most cases, if the debtorÕs equity interest in the property is exempt, the debtor may retain the property by redemption or reaffirmation.

Do I have to fill out forms?
If you file the bankruptcy yourself, you must fill out the forms. There are several forms. There could be between 30 and 60 pages in your bankruptcy petition, schedules and other papers filed at the time of your bankruptcy. You must follow the local and federal bankruptcy court laws in completing the forms. Preparing these forms requires an understanding of both bankruptcy law and local state law in order to enter the information correctly. The forms must be typed and a certain number of copies must be included with original when it is filed. Most attorneys use a computer system to prepare these forms due to their complexity and voluminous nature.

Do I have to go to Court?
Yes. Approximately 30 days after your file the bankruptcy, you will have to attend a hearing presided over by the bankruptcy Trustee. This hearing is called the First Meeting of Creditors. At this hearing, the Trustee will ask questions, to be answered under oath, regarding the content of your bankruptcy papers, assets, debts and other matters. After the Trustee is finished, your creditors will be permitted to question you. Your attorney will be there to represent you and your attorney will help you prepare for the hearing. Sometimes, after the hearing is over, various creditors will approach you to discuss the status of secured property or your desire to retain a credit card. Your attorney will negotiate on your behalf, with your knowledge and approval. After this hearing, you normally will not need to return to Court. However, if a creditor files a motion or an adversary action, you will probably have to return to Court. This is the exception and only your attorney can determine if this is likely to occur.

What happens after I file bankruptcy?
Under normal circumstances, the bankruptcy court will automatically issue the discharge 60 to 75 days after the First Meeting of Creditors.

Who deals with the creditors and bill collectors during the bankruptcy?
Your attorney will deal with your creditors.

What if I forget to list a creditor on my bankruptcy papers?
You are permitted to file an amendment to your schedules up to a certain time before discharge. If the amendment is timely filed, then the omitted creditor is added to the bankruptcy. It is perjury to intentionally omit a creditor. However, if you do not know that a creditor exists and there are no assets for your creditors, the debt will be discharged.

What is a discharge?
A discharge is a Court Order which states that you do not have to pay most of your debts. Some debts cannot be discharged. The discharge only applies to debts that arose before the date you filed your bankruptcy. Additionally, if the Court finds that you received money or property by fraud, the debt may not be discharged. It is important to list all your property and debts in your bankruptcy schedules. If you do not list a debt, it is possible that the omitted debt will not be discharged. The Court can also deny your discharge if you do something dishonest in connection with your bankruptcy case, such as destroying or hiding property, falsifying records, lying or disobeying a Court Order. You can only receive a Chapter 7 discharge once every six (6) years. No one can make you pay a debt that has been discharged, but you can voluntarily pay any debt you wish to. You do not have to sign a reaffirmation agreement or any other kind of document to do so. Some creditors hold a secured claim (for example, the bank that holds the mortgage on your house or the loan company that has a lien on your automobile). You do not have to pay a secured claim, if the debt is discharged; however, the creditors can still take the property back.

What happens to my credit rating after bankruptcy?
The bankruptcy is a judgment and will be listed by crediting reporting agencies for a period of up to ten (10) years.

After bankruptcy, can I get credit?
Yes. This is up to each particular credit grantor. It is possible to get credit if the credit grantor believes and understands your reasons for filing the bankruptcy.

How do I re-establish my credit after bankruptcy?
There are at least two ways to get credit after a bankruptcy. First, one of your existing creditors may continue to grant you credit based upon a reaffirmation agreement made during the bankruptcy. Second, there are several banks today which offer a secured credit card. This means that the credit limit is based upon the amount of security given. There are professionals who specialize in the business of credit repair. Discuss this with your attorney.