Bankruptcy Questions

1.    Do I need a lawyer?

This depends on the complexity of the particular case and the type of bankruptcy involved.  Chapter 7 cases can be straightforward. However, as most bankruptcy lawyers offer the first consultation free, it is worthwhile pursuing this option. An experienced lawyer could ensure that less property is lost when filing chapter 7.

As chapters 11 and 13 bankruptcy are more complicated, requiring the development of a debt repayment plan and involvement with diverse people, a lawyer is advisable.

If a corporation or similar is the debtor, a lawyer is required.

2.    Can I afford to file bankruptcy?

The filing fee for a chapter 7 bankruptcy to deal with such debts as personal consumer or medical debt is $299.00; however, this can be paid in installments, if an attorney has not been paid a retainer for the case. Chapter 13 could be about the same to file, but chapter 11 is more complex to file and more expensive. A debtor can anticipate paying a $1039.00 filing fee for a Chapter 11, and then quarterly fees based upon disbursements must be paid to the United States Trustee who supervises the case. Installment payments for filing fees are not usually an option if a lawyer has been paid a retainer for the case. If a lawyer is involved, attorney’s fees will increase the expense of handling the case, which will be higher depending on its complexity.

3.    Will all my debts be discharged?

Chapter 7 is an approach to bankruptcy that allows for the elimination of all non-dischargeable debt declared. Chapters 11 & 13 focus on reorganization and restructuring. In the process some debts can be discharged.

4.    Will I lose my house and car?

You can probably retain your house and car as they are likely to be exempt assets being secured or covered by liens. However, it is important to file bankruptcy before you have missed payments leading to foreclosure proceedings or repossession attempts. Should such actions have started, it may be possible to stop them.

5.    Will I lose my retirement fund?

The bankruptcy code offers measures to assist debtors to find relief from burdensome debts, so do not automatically assume that filing bankruptcy, even chapter 7, which is known as a liquidation approach, will lead to total loss of assets. Most people retain many, if not all of their assets, and retirement funds are usually protected.

6.    Will I be a figure of ridicule?

Unless you are a public figure, it is unlikely that anyone other than your creditors needs to know. You may not be discriminated against at work due to filing.

7.    How long will the bankruptcy be part of my financial record?

Typically, bankruptcy remains on the record for 10 years; however, a credit record can be rebuilt.

8.     Can bankruptcy help with child support or alimony debt?

Unfortunately, the simple answer here is no. These debts are specifically excluded from discharge. Assistance with managing these obligations could be available through the creation of a debt repayment plan.

9.    What happens if I forget to list a debt?

If you do not declare a debt, it cannot be part of the discharge. Depending on the time frame, it may be possible to file an amendment. Any suspicion of a deliberate attempt to hide a debt could be considered perjury.

10.    How long will the bankruptcy procedure take?

Chapter 7 bankruptcy takes approximately four months. Chapter 13 takes several months, but there is a period of three to five years during which the debtor must adhere to the repayment plan. Chapter 11 can be a lengthy procedure usually involving long term payouts.

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