Read some Frequently Asked Questions about Bankruptcy    
 
Q. What is bankruptcy?
A. Bankruptcy is a federal law established to assist individual consumers and businesses facing financial difficulties.  The goal is to help consumers and businesses obtain a financial fresh start.

Q. What are the different types of bankruptcy?
1.
Chapter 7
2.
Chapter 11
3.
Chapter 13

Q.  Does bankruptcy prohibit creditors from calling and harassing me?
A.  Yes.  Once a debtor files a bankruptcy petition, the court grants the debtor with an automatic stay.  The stay is an injunction that prohibits creditors from contacting or taking action against a debtor.


Q.  Can bankruptcy stop creditors from garnishing my  wages and freezing my bank account?
A.  Yes.  As indicated above the automatic stay prohibits creditors taking or continuing to take any action against a debtor.


Q.  Do I get to keep any assets?
A.  Yes.  A Chapter 7 debtor can keep assets that are classified as exempt under the bankruptcy code.  A Chapter 13 debtor may potentially keep of his or her assets upon the completion of a court approved payment plan.


Q. Can I keep my house?
A. A Chapter 7 debtor can keep up to $50,000 ($100,000 for spouses filing jointly) worth of equity (equity=fair market value of a home minus any and all outstanding mortgage balances) in a home.  A debtor who maintains equity in a home in excess of the exemption limit will most likely be a better candidate for Chapter 13 Bankruptcy.  A debtor in Chapter 13 bankruptcy may keep a house upon approval and completion of a court approved payment plan.


Q. Can I keep my car?
A. A debtor can keep a motor vehicle with equity up to $2,400 ($4,800 for spouses filing jointly)


Q. Does bankruptcy stop foreclosure proceedings?
Yes.  Upon the filing of a bankruptcy petition, mortgage foreclosure proceeding by a lender are stayed (unless there is a prior order by the bankruptcy court allowing the creditor to continue foreclosure proceedings against the debtor)


Q. Can I keep a bank account?
A. Yes.  A debtor can maintain a bank account and claim up to $2,500 as exempt assets.


Q. Do I have to include all my debts?
A. Yes.  A debtor must identify all of his or her creditors ina bankruptcy petition.


Q. If you are married, do both spouses have to file?
A. No.  There is no rule that requires both spouses to file bankruptcy.  The decision concerning whether or not a spouse should take a joint bankruptcy petition should be evaluated based upon the circumstances of the particular case.

 
Q. After the bankruptcy process, can I get credit again?
A. Yes.  An individuals bankruptcy can be reflected on a credit report for up to ten years.  However, that does not mean that an individual will not obtain credit again.  There a re many mortgage lenders, motor vehicle financing companies and credit card companies that do not automatically disqualify an applicant because they previously filled bankruptcy.  In fact it is possible that a consumers credit score may remain level if he or she did nothing at all as opposed to filing bankruptcy and then paying his or her bills on time after filing.  Additionally, it is important to note that if someone is delinquent on their bills their credit score may already be negatively impacted by late payments.

 

   
 
 
 

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We are a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code.
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