When should I file bankruptcy?

This completely rests on your financial situation. If you are neck deep in debt and trying to overcome the state of affairs, you get various options to choose from e.g. debt management, debt consolidation and settlement. When none of these programs work for you and you are not in a position to pay a dime the only option that remains open is Bankruptcy.

Do I need to record all my debts?

Yes you do need to file all your debts inclusive of non-dischargeable and secured ones. Exclusion of debts is criminal offense and you can be denied discharge.

Is an attorney required?

This is solely your decision in case of a personal bankruptcy. You can be a Pro Se. For business debtors having an attorney is a must. Bankruptcy is not a simple procedure and requires a lot of knowledge and education to fight on the own. Therefore decision should be prudent.

What is the difference between BK Chapter 7, 11 and 13?

1. Chapter 7 is liquidation: A trustee is appointed as in charge of your “estate” and he has the sole liberty to sell all your assets to pay the creditors. Law may allow you to keep a part of your property and the rest will be sold.
2. Chapter 11 is reorganization: This is primarily intended to restructure business debts. Success depends on the filing of a “reorganization plan” with the approval of the creditors and permission from the court to proceed with such a plan.
3. Chapter 13 is modification of debts for an individual with regular source of income: A court supervised plan is made for the debtor to repay the creditors within 30days of the commencement of the case. The period allowed for repayment is 5 years and the plan initially made by the debtor has to be approved by the court. The payments go to a trustee who on behalf of the debtor pays the creditors.

What information are required to file bankruptcy?

• Residential address
• SSN
• Employer’s name and address
• Salary details
• The list of debtors
• A list of all the major assets that you own
• List of personal source of income
• List of all financial accounts
• Complete monthly expenses
• Federal and state tax returns for last two years.

Does filing bankruptcy protect me from wage garnishment?

The answer is yes. Immediately after you file the BK you are under protection of the court. Now you can inform your wage garnishing creditor and the Sheriff of filing bankruptcy.

Bankruptcy case is public information?

Yes it is. Anyone can gather information from the court and verify your filing. They can review the file as well.

Will I have to face a judge?

Once you are into a case you have to. Mainly in case of a Pro Se you will be given dates and will be expected to attend.

Are all debts eliminated by the court?

This is not the case. There are certain debts that cannot be discharged e.g. Tax liens, student loans, debt from fraud, alimony, and child support.

Do creditors get notified of discharge?

Yes they do.

When does the case close?

In case of chapter 7, the case get closed from 90 days of filing if no objections are raised or disputes are caused. In case of chapter 13 the case continues for the full term of the payment plan. For chapter 11 the case becomes complicated and do not close even in 3 years despite confirmation of a plan.

Do I lose my house in case I file bankruptcy?

If you do not have any equity in that case the court allows you to keep the house as long as you are paying your mortgage on time. If you do have some equity and it keeps lower than the exempt available to you then you can keep the house otherwise not.

Is it necessary for my spouse to file along with me?

The answer is no unless it is really required. The effect on your spouse will depend on the marital property laws of your state.

Which bankruptcy to file?

This is completely depends on your financial status and the kind of debt that you owe. Whether you are defaulting on secured loans, whether you have a fixed income, are considered important while opting for a chapter of bankruptcy.

Am I eligible for credit after bankruptcy?