Frequently Asked Questions
Chapter 7 FAQs
- Why should I hire a Bankruptcy Lawyer? Filing for bankruptcy can be a complicated process having to account for court rules, trustee document requirements and most importantly your exemptions. Failure to comply with the precise rules and law may result in loss of assets, denial of discharge and/or US Trustee investigation. To protect your assets and keep piece of mind you should hire a competent bankruptcy attorney as it is a specialized area of the law.
- Who can file a Chapter 7 Bankruptcy? Anyone who has not filed a prior Chapter 7 and received a discharge in that case in the last 8 years.
- What happens after you file a Chapter 7 bankruptcy? The moment you file (assuming you have not had prior dismissed cases) the court issues an automatic stay which stops all creditors from attempting to collect on your debt. The court assigns a trustee and schedules a meeting with that trustee. You must provide certain supporting documents to your trustee in advance of the meeting. Your attorney will be with you at the meeting where you will be questioned by the trustee and any other interested party about your case (creditors and/or the US Trustee).
- If I file for Chapter 7 bankruptcy will I be able to keep my car? Your creditors are not required to appear at the meeting, but have 60 days from the meeting date to file a written objection to your discharge if grounds exist for such. Assuming no one objects to the discharge and you have completed the personal financial management class the court will enter a discharge eliminating your debts.
- Can you file for Chapter 7 bankruptcy and keep your house? You can keep all assets, including your home, provided you maintain the secured lien payments and exempt the asset in your bankruptcy schedules.
Chapter 13 FAQs
- Who can file for a Chapter 13 Bankruptcy? Any individual who has regular monthly income and has less than $5million in total debt.
- How does a Chapter 13 bankruptcy case work? Your creditors are stopped from trying to collect from you directly while you make a monthly payment to the Chapter 13 Trustee who pays your creditors from those monthly payments.
- How long does it take to complete a Chapter 13 plan? 3-5 years.
- How does Chapter 13 differ from Chapter 7 from the point of view of the debtor? You are subject to the bankruptcy courts authority as long as your case is open. A Chapter 13 can be open for 5 years. Most Chapter 7 cases are open for about 100 days.
- Why would a debtor choose Chapter 13 over Chapter 7? If you had assets that might be taken by the Trustee in a Chapter 7 or were delinquent on your house or auto payments and wanted to keep your house and auto a Chapter 13 may be a better option.
- What debts are paid by a Chapter 13 plan? You must file a Plan For Reorganization in Chapter 13. Once your plan is confirmed by the court, the plan will dictate who gets paid.
- How much must the debtor pay to the trustee? Your monthly plan payments are controlled by a number of factors, including, but not limited to: your income, your debt make up, your assets and the Means Test.
- Who is the trustee? A Trustee is appointed by the court and makes recommendations to the court and collects all plan payments and makes monthly distributions to your creditors from those monthly plan payments.
- May a self-employed person file under Chapter 13? yes
- Should a married couple file a joint Chapter 13 petition? Usually, but not always. There may be very good reasons to file jointly or without your spouse.
- May a debtor convert a Chapter 7 case to a Chapter 13 case? Generally yes provided you have acted in good faith and have not previously converted your case.
- How do I survive a Chapter 13 Bankruptcy (more of tips and recommendations)? Chapter 13 is voluntary and can dismiss the case at any time so how you survive is up to you.