WHAT IS BANKRUPTCY?

Bankruptcy allows individuals who owe creditors more money than they’re able to pay, to either work out a plan to repay the money over time, or completely eliminate most of the bills.

WHAT IS CHAPTER 7 BANKRUPTCY?

Chapter 7 bankruptcy, sometimes call a straight bankruptcy is a liquidation proceeding. The debtor turns over all non-exempt property to the bankruptcy trustee who then converts it to cash for distribution to the creditors. The debtor receives a discharge of all dischargeable debts usually within four months. 
One of the main purposes of Bankruptcy Law is to give a person hopelessly burdened with debt, a fresh start by wiping out his or her previous debts.

WHAT IS CHAPTER 13 BANKRUPTCY?

Chapter 13 Bankruptcy, or reorganization bankruptcy is filed by individuals who want to pay off their debts over a span of three to five years. This type of bankruptcy appeals to individuals with non-exempt property that they want to keep. It is also only an option for individuals who have predictable income sufficient enough to pay their reasonable expenses with some amount left over to pay off their debts.

WILL CREDITORS STOP HARASSMENT?

Yes, by law, all actions against debtors must cease once the documents are filed. Creditors cannot initiate or continue any lawsuits, wage garnishees, or even telephone calls demanding payments once filed. Secured creditors will get the stay lifted if payments cannot be made.

WHO WILL KNOW?

Bankruptcy filings are public records but under normal circumstances, no one will know who went bankrupt unless he or she specifically sought out the information. The Credit Bureaus will record bankruptcy and it will remain on one’s credit record for 10 years.

WHY FILE CHAPTER 7 BANKRUPTCY?

The most common reasons for filing bankruptcy are:

  • Other large unexpected expenses.

WHAT ISN’T KEPT?

In a bankruptcy, assets in excess of your allowed personal exemption, or non exempt assets such as, real estate, automobiles and boats will be liquidated by the trustee.

IF BANKRUPT BEFORE, WHEN CAN ONE FILE AGAIN?

A person can file Chapter 7 again if it has been more than 8 years since he or she filed the previous Chapter 7 bankruptcy.

WHAT DEBTS ARE EXPUNGED BY A BANKRUPTCY?

  • Most unsecured debt is cleared in a bankruptcy EXCEPT for:
  • Child support and alimony
  • Debts for personal injury or death caused by one’s own drunk driving
  • Student Loans
  • Income tax debt

WHAT DOES IT COST TO FILE FOR BANKRUPTCY?

It costs about $300 to file a Chapter 7 bankruptcy.  A bankruptcy lawyer’s fees vary, but will likely be in the range of $1,000 to $2,000.