Will I lose my home if I file bankruptcy?
Not if it has less than $150,000 in equity, and if you can
afford to make the regular payments. If you are current on
your home mortgage payments, and if you can still afford the
regular payments under your current mortgage contract, bankruptcy
will not affect your home.
Will I lose my job if I file bankruptcy?
Your employer will usually not let you go simply because
you file for bankruptcy. If you are frequently late to work,
lazy, or don't meet your employers deadlines or your bosses
expectations, then you have reason to worry. The bankruptcy
code has provisions which make it illegal for certain employers
to fire you merely because you have filed for bankruptcy relief.
Speak with your attorney to see if the provisions of §525
apply to your employment.
Will I lose my car, truck, or van if I file bankruptcy?
If your vehicle is free and clear, is worth less than $5000,
and you have lived in Arizona for more than 2 years, then
your vehicle is protected under the Arizona Personal Property
Exemption law. If you are upside down on you vehicle loan,
current on the payments, and it is fully insured, there is
very little risk of losing your vehicle in a bankruptcy. Even
if these scenarios don't apply to your situation, most clients
can keep their vehicles in a Chapter 13 repayment plan if
they can afford to pay for the vehicle otherwise.
Can I keep any credit cards during my bankruptcy?
When you file a bankruptcy you must list all your creditors.
Once the credit card company is aware that you have filed
bankruptcy, they will cancel your credit privileges. Even
if your card has a zero balance, most major creditors regularly
check the credit report of their card holders. When they become
aware of your bankruptcy proceeding, they will usually revoke
credit privileges.
Will I ever be able to get credit again?
Sooner than you think. Long before you can really afford
it. Credit has not been a blessing in your life in the past.
It would be best to ask, "after all this financial nightmare
is over, will I have educated myself enough to understand
the true cost of credit, and will I have developed the necessary
attitude and discipline to live content on less than I earn,
save for future purchases and needs, and prepare for my future
by taking control of my own financial destiny". Just
a thought. Will my employer be notified that I filed bankruptcy?
When will my creditors stop calling me?
The obvious answer is, once you have paid them the money
that they believe that you owe them. The practical answer
that you are looking for is, once you hire our office by returning
the filled out client questionnaire, you may refer your creditor
to speak with our offices. There is some protection against
aggressive collection agencies under the US Fair Debt Collection
Practices Act. But alas, this is far too complicated to try
to explain in a FAQ. See a competent bankruptcy attorney for
an explanation of your legal rights under the Act. Will I
have to attend any hearings at court? There is an administrative
hearing that is called the "First Meeting of Creditors"
that you will be required to attend. Your attorney will be
present with you at the hearing. If your case has been prepared
properly, this hearing will be very short and quite painless.
Hire the right attorney and rest easy about this hearing.
Will I go to jail for not paying my debt?
No. Not unless the debt is for doing something illegal.
Owing a debt that you simply cannot pay at this point is not
a crime. There are no longer debtors prisons in the United
States. Bankruptcy is a system for honest debtors to get a
fresh start. You should be ok.
Will I lose all my assets if I file bankruptcy?
You may protect exempt property in a Chapter 7 proceeding,
and usually all your property in a Chapter 13. This is a very
case specific matter and is best discussed with a competent
bankruptcy professional.
How often can someone file a bankruptcy?
Under current law you are not eligible for a discharge in
a Chapter 7 case filed within 8 years of the filing of a previous
Chapter 7 which resulted in a discharge of debts.
How long does a bankruptcy take to complete?
Typically a Chapter 7 will require about 6 months for a
discharge to be entered, start to finish. This is of course
dependent upon the type of case, the facts involved, the actions
and pleadings of your creditors before the court, and how
well the case is prepared and handled. A Chapter 13 case will
run anywhere from 36 to 60 months, depending upon the case.
Most Chapter 13 cases are running 60 months under the new
2005 bankruptcy laws.
How long does a bankruptcy remain on my credit report?
The law allows it to remain on your credit report for 10
years. A Chapter 13 will usually be removed from your report
by the credit bureau after 7 years from the date of filing.
Will all my debts be discharged if I file bankruptcy?
Not necessarily. See the explanation of debts not discharged
in bankruptcy.
What does it cost to file bankruptcy?
This depends on the type of proceeding that your case requires,
the complexity of your matter, and the amount of work required
as a result of your creditors actions in the proceeding. Generally,
a Chapter 7 will cost in the neighborhood of $1500 to $1800
plus costs. More if there is a business involved, less if
the debtors are living on Social Security and have a good
explanation of where the debt came from. "I have a Gambling
Addiction" is not a good explanation. "I was unexpectedly
hospitalized for 2 weeks with a heart condition" is more
what I meant.
Can I pay my fees in installments?
Yes. But all fees must be paid before a Chapter 7 proceeding
will be filed. If your facts call for a Chapter 13, the majority
of your attorney fees can be paid over time after the case
is filed, through the over court payment plan set up to repay
what you can to your creditors.
Does my spouse have to file bankruptcy if I do?
Not necessarily. However, if your spouse is legally liable
on a significant amount of the debt, it usually makes sense
to get a discharge for both spouses at the same time. This
is definitely something that you will want to discuss with
your attorney after they have all the relevant facts in your
case.
What happens to my spouse's credit if I file bankruptcy?
Your bankruptcy will not have your bankruptcy listed on
their credit report as having filed a bankruptcy themselves,
however, it can show up on their report as "this account
in bankruptcy" for any joint accounts that they have
with you.
Will filing bankruptcy stop a wage garnishment?
It can. When a bankruptcy is filed the court issues an automatic
stay of all legal proceedings, including an order for garnishment
of wages pursuant to a civil judgement. However, some garnishments
will survive the stay issued by the bankruptcy court. Child
support and Alimony payments may continue to be withheld from
your pay in spite of the bankruptcy order.
How does bankruptcy stop a foreclosure?
When your mortgage lender files a notice of trust deed sale
on your home or business real estate, they are demanding that
you bring the payments and all defaults current. A Chapter
13 has the ability to stop the foreclosure sale from occurring,
if you can afford to catch up your mortgage arrears in a plan
proposed to the court, and if you can afford to keep your
regular payment current during the plan term. See the information
on Chapter 13.
Can filing bankruptcy help me save my marriage?
Maybe. If you and your spouse are typical, the stress relating
to debt, creditor calls and threats, and loss of sleep, will
have a very real effect on your health, marital communication,
and other relationships. Personally, my ability to keep my
job to provide for my family, my health and well being, and
my marital and family relationships are always more important
than my credit rating. Come in and see what we can do to help
you take control of your life!
Will filing bankruptcy help me lose weight?
If you believe that adequate rest, proper diet, and less
overall stress will help you lose weight then the answer is
yes. I do. Maybe this is a question for your family physician.
Will I grow a third eye in the middle of my forehead
if I file bankruptcy?
No. Not only that, but you will not develop any other unnatural
disorder that will make you a social leper. It is important
to pay bills that you owe. There are circumstances which make
this impossible in spite of our best intentions. This is why
bankruptcy laws have been written. This is why most of our
clients are able to discharge the majority of their debts
and get back to living as normal a life as possible.
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