Bankruptcy
- What is a chapter 7 bankruptcy?
- What happens when I file a chapter 7 bankruptcy?
- What are the Benefits and Consequences of a chapter 7 bankruptcy?
- What is Bankruptcy and what is the difference between chapter 7 and chapter 13 bankruptcy? Which one lets me keep my property?
- Exempt Property
- How often can I file bankruptcy?
- What does it cost to file for bankruptcy?
- What property can I keep after I file bankruptcy?
- Can I keep my home and/or car after I file bankruptcy?
- What debt will bankruptcy not erase?
- Will I have to go to court?
- Will filing bankruptcy affect my credit?
- What is the effect of bankruptcy on co-signers?
- Can a married debt file without the other spouse?
- Can I erase my student loans by filing bankruptcy?
- What is a discharge in a bankruptcy?
- When does the discharge occur?
- Does the debtor have a right to a discharge or can creditors object to the discharge?
- Can the debtor receive a second discharge in a later chapter 7 case?
What is a chapter 7 bankruptcy?
Under the federal bankruptcy statute, a discharge is a release of the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer required by law to pay any debts that are discharged. The discharge operates as a permanent order directed to the creditors of the debtor that they refrain from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts. Although a debtor is relieved of personal liability for all debts that are discharged, a valid lien (i.e., a charge upon specific property to secure payment of a debt) that has not been avoided (i.e., made unenforceable) in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien. For more information on Chapter 7, pleases contact our bankruptcy attorney to discuss your legal options.
Go BackWhat happens when I file a chapter 7 bankruptcy?
Under the federal bankruptcy statute, a discharge is a release of the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer required by law to pay any debts that are discharged. The discharge operates as a permanent order directed to the creditors of the debtor that they refrain from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts. Although a debtor is relieved of personal liability for all debts that are discharged, a valid lien (i.e., a charge upon specific property to secure payment of a debt) that has not been avoided (i.e., made unenforceable) in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien. For more information on Chapter 7, pleases contact our bankruptcy attorney to discuss your legal options.
Go BackWhat are the benefits and consequences of a chapter 7 bankruptcy?
Under a Chapter 7 bankruptcy, some of your property may be sold to pay down your debt. In return, most or all of your unsecured debts (debts for which collateral has not been pledged) will be erased. You get to keep any property that is classified as exempt under the state or federal laws available to you (such as your clothes, car, and household furnishings). Many debtors who file for Chapter 7 bankruptcy are pleased to learn that all of their property is exempt.
Under a Chapter 7 if you owe money on a secured debt (for example, a car loan), you will have a choice of allowing the creditor to repossess the property or if the lender agrees you may continue your payments on the property under the contract.
During a Chapter 7 bankruptcy, you ask the bankruptcy court to discharge most of the debts you owe. In exchange for this discharge, the bankruptcy trustee can take any property you own that is not exempt from collection, sell it, and distribute the proceeds to your creditors. For more information on Chapter 7, pleases contact our bankruptcy attorney to discuss your legal options.
Go BackWhat is bankruptcy and what is the difference between chapter 7 and chapter 13? Which one lets me keep my property?
Items that the debtor must forfeit include:
- Expensive musical instruments, unless the debtor is a professional musician
- Collections of stamps, coins and other valuable items
- Family heirlooms
- Cash, bank accounts, stocks, bonds and other investments
- A second car or truck
- A second home or vacation home
Exempt Property
Certain types of property are exempt, meaning that the debtor can keep that property. Exempt property includes:
- Motor vehicles, up to a certain value
- Reasonably necessary clothing
- Reasonably necessary household goods and furnishings
- Household appliances
- Jewelry, up to a certain value
- Pensions
- A portion of the equity in the debtor's home
- Tools of the debtor's trade or profession, up to a certain value
- A portion of unpaid but earned wages
- Public benefits, including public assistance (welfare), social security and unemployment compensation, accumulated in a bank account
- Damages awarded for personal injury
How often can I file bankruptcy?
You can file for Chapter 7 bankruptcy again after six years has passed from the date of your last filing. A Chapter 13 bankruptcy can be filed at any time.
Go BackWhat does it cost to file for bankruptcy?
The fee for a Chapter 7 - $299 filing fee.
The fee for a Chapter 13 - $299 filing fee.
Note: The fee is the same when filing a joint petition with a spouse.
What property can I keep after I file bankruptcy?
In a chapter 7 case, you can keep all the property which is exempt from the claims of creditors. In determining whether property is exempt, you must keep a few things in mind. The value of property is not the amount you paid for it, but what it is worth now. Generally the trustee is interested in the resale value of your property so for most personal effects this is the garage sale value of your property.
You also only need to look at your equity in property. This means that you count your exemptions against the full value minus any money that you owe on mortgages or liens. For example, if you own a $50,000 house with a $40,000 mortgage, you count your exemptions against the $10,000 equity you have in the home. While your exemptions allow you to keep property even in a chapter 7 case, your exemptions do not make any difference to the right of a mortgage holder or car loan creditor to take the property to cover the debt if you are behind. If you are behind in payments and can afford to make the loan payment and to make the amount you are behind over a period of three to five years you should consider a chapter 13 bankruptcy.
In a chapter 13 case, you can keep all of your property if your plan meets the requirements of the bankruptcy law. In most cases you will have to pay the mortgages or liens as you would if you didn't file bankruptcy. For more information on Chapter 7 or 13, pleases contact our bankruptcy attorney to discuss your legal options at (850) 434-8904.
Go BackCan I keep my home and/or car after I file bankruptcy?
You will not lose your home or car during your bankruptcy case as long as your equity in the property is fully exempt. Even if your property is not fully exempt you may still be able to keep your property by filing a chapter 13 bankruptcy instead of a chapter 7 bankruptcy. In a chapter 13 plan you will be required to pay at least the equivalent of the non-exempt equity you have in your home or car and any amount you are behind on your home or car loan over the course of the three to five plan. You also will be required to continue making the regular monthly payments. For more information on your options pleases contact our Pensacola bankruptcy attorney to discuss your legal options at (850) 434-8904.
Go BackWhat debt will bankruptcy not erase?
- money owed for child support or alimony, fines, and some taxes;
- debts not listed on your bankruptcy petition;
- loans you got by knowingly giving false information to a creditor, who reasonably relied on it in making you the loan;
- debts resulting from "willful and malicious" harm;
- student loans owed to a school or government body, except if:-- the court decides that payment would be an undue hardship;
- mortgages and other liens which are not paid in the bankruptcy case (but bankruptcy will wipe out your obligation to pay any additional money if the property is sold by the creditor).
For more information on your options please contact us to discuss your legal options at (850) 434-8904
Go BackWill I have to go to court?
In most bankruptcy cases, you only have to go to a proceeding called the "meeting of creditors" or a "341 meeting" to meet with the bankruptcy trustee and any creditor who chooses to come. This meeting will take place about 30 or 40 days after the bankruptcy filing. The trustee is not a judge but an individual appointed by the United States Trustee to oversee your case. Most of the time, this meeting will be a short and simple procedure where you are asked a few questions about your bankruptcy forms and your financial situation. Occasionally, if a creditor or the trustee files a motion or an adversary action or if you choose to dispute a debt, you may have to appear before a judge at a hearing. If you need to go to court, you will receive notice of the court date and time from the court and/or from your attorney. For more information on your options pleases contact our Pensacola bankruptcy attorney to discuss your legal options at (850) 434-8904.
Go BackWill filing bankruptcy affect my credit?
There is no clear answer to this question. Unfortunately, if you are behind on your bills, your credit may already be bad. Bankruptcy will probably not make things any worse. The fact that you filed bankruptcy, if properly explained, may be less damaging than a history of unpaid accounts.
The fact that you have filed a bankruptcy will appear on your credit record for ten years. But since bankruptcy wipes out your old debts, you are likely to be in a better position to pay your current bills, and you may be able to get new credit. The best way to restore your credit is to obtain new credit and make the payments on the new debt on time. For more information on your options pleases contact our Pensacola bankruptcy attorney to discuss your legal options at (850) 434-8904.
Go BackWhat is the effect of bankruptcy on co-signers?
If someone has co-signed a loan with you and you file for bankruptcy, the co-signer will still have to pay the debt. You should list the co-signer as a creditor in your bankruptcy petition since they may have a contingent claim against you. For more information on your options pleases contact our Pensacola bankruptcy attorney to discuss your legal options at (850) 434-8904.
Go BackCan a married debt be filed without the other spouse?
Yes, but your spouse will still be liable for any joint debts. If you file together you will be able to double your exemptions. In some cases where only one spouse has debts, or one spouse has debts that are not dischargeable then it might be advisable to have only one spouse file. If the spouses have joint debts, the fact that one spouse discharged the debt may show on the other spouses credit report. For more information on your options pleases contact our Pensacola bankruptcy attorney to discuss your legal options at (850) 434-8904.
Go BackCan I erase my student loans by filing bankruptcy?
Generally, student loans are not discharged in bankruptcy. In 11 U.S.C. sec. 523(a)(8) there are two exceptions to this general rule:
- The student loan may be discharged if it is neither "insured or guaranteed by a governmental unit" nor "made under any program funded in whole or in part by a governmental unit or nonprofit institution."
- The student loan may be discharged if paying the loan will "impose an undue hardship on the debtor and the debtor's dependents."
It is usually difficult to have student loans erased under the undue hardship standard. Whether an exception applies under this law depends on the facts of the particular case and may also depend on local court decisions. Even if a student loan falls into one of the two exceptions, discharge of the loan may not be automatic. You may have to file an adversary proceeding in the bankruptcy court to obtain a court order declaring the debt discharged. For more information on your options pleases contact our Pensacola bankruptcy attorney to discuss your legal options at (850) 434-8904.
Go BackWhat is a discharge in a bankruptcy?
Under the federal bankruptcy statute, a discharge is a release of the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer required by law to pay any debts that are discharged. The discharge operates as a permanent order directed to the creditors of the debtor that they refrain from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts. Although a debtor is relieved of personal liability for all debts that are discharged, a valid lien (i.e., a charge upon specific property to secure payment of a debt) that has not been avoided (i.e., made unenforceable) in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien. For more information on your options pleases contact our Pensacola bankruptcy attorney to discuss your legal options at (850) 434-8904.
Go BackWhen does the discharge occur?
The timing of the discharge varies, depending on the chapter under which the case is filed. In a chapter 7 (liquidation) case, for example, the court usually grants the discharge promptly on expiration of the time fixed for filing a complaint objecting to discharge and the time fixed for filing a motion to dismiss the case for substantial abuse (60 days following the first date set for the 341 meeting). Typically, this occurs about four months after the date the debtor files the petition with the clerk of the bankruptcy court. In chapter 11 (reorganization) cases, the discharge occurs upon confirmation of a chapter 11 plan. In cases under chapter 12 (adjustment of debts of a family farmer) and 13 (adjustment of debts of an individual with regular income), the court grants the discharge as soon as practicable after the debtor completes all payments under the plan. Since a chapter 12 or chapter 13 plan may provide for payments to be made over three to five years, the discharge typically occurs about four years after the date of filing. For more information on your options pleases contact our Pensacola bankruptcy attorney to discuss your legal options at (850) 434-8904.
Go BackDoes the debtor have a right to a discharge or can creditors object to the discharge?
In chapter 7 cases, the debtor does not have an absolute right to a discharge. An objection to the debtor’s discharge may be filed by a creditor, by the trustee in the case, or by the United States trustee. Creditors receive a notice shortly after the case is filed that sets forth much important information, including the deadline for objecting to the discharge. A creditor who desires to object to the debtor’s discharge must do so by filing a complaint in the bankruptcy court before the deadline set out in the notice. Filing of a complaint starts a lawsuit referred to in bankruptcy as an “ adversary proceeding.” A chapter 7 discharge may be denied for any of the reasons described in section 727(a) of the Bankruptcy Code, including the transfer or concealment of property with intent to hinder, delay, or defraud creditors; destruction or concealment of books or records; perjury and other fraudulent acts; failure to account for the loss of assets; violation of a court order; or an earlier discharge in a chapter 7 case commenced within six years before the date the petition was filed. If the issue of the debtor’s right to a discharge goes to trial, the objecting party has the burden of proving all the facts essential to the objection.
In chapter 13 cases, the debtor is entitled to a discharge upon completion of all payments under the plan. The Bankruptcy Code does not provide grounds for objecting to the discharge of a chapter 13 debtor. Creditors can object to confirmation of the repayment plan, but cannot object to the discharge if the debtor has completed making plan payments. For more information on your options pleases contact our Pensacola bankruptcy attorney to discuss your legal options at (850) 434-8904.
Go BackCan the debtor receive a second discharge in a later chapter 7 case?
You will be denied a discharge in subsequent chapter 7 case if the you received a discharge under chapter 7 in a case filed within eight years before the subsequent petition is filed. You will also be denied a chapter 7 discharge if you previously received a discharge in a chapter 13 case filed within six years before the date of the filing of the second case unless (1) you paid all “allowed unsecured” claims in the earlier case in full, or (2) you made payments under the plan in the earlier case totaling at least 70 percent of the allowed unsecured claims and your plan was proposed in good faith and the payments represented your best effort. You are ineligible for discharge under chapter 13 if you received a prior discharge in a chapter 7 case filed four years before the current case or in a chapter 13 case filed two years before the current case. For more information on your options pleases contact our Pensacola bankruptcy attorney to discuss your legal options at (850) 434-8904.
