This page is designed to break through that wall of mystery and give you the knowledge you'll need to make an informed decision regarding your financial future. GENERAL QUESTIONS
TYPES OF BANKRUPTCY
WHAT CAN I KEEP?
DEBTS INCLUDED
EFFECTS ON CREDIT
BANKRUPTCY COSTS What is bankruptcy? When you file for bankruptcy protection, you’re simply admitting the truth — that you are unable to keep your promise to pay your bills. But, more importantly, you are asking the court to stop your creditors from forcing you to keep your promise to pay your bills, when you don't currently have the money to do so. This court protection will stop all of the endless calls and harassment and put a stop to any legal actions taken by your creditors. Filing bankruptcy can allow you to keep your car, your home, and your peace of mind. How do I know if I qualify for bankruptcy? There are a number of factors to consider when determining if bankruptcy is right for you. We've developed an easy-to-use test to help you. Just click on our Bankruptcy Test and get started! Keep in mind there are no income requirements to meet before you can file for bankruptcy. You don't have to owe a certain amount of money, and you don't have to be behind on your bills before you can file. Basically, anyone can file at any time. A bankruptcy judge will make the final determination of your status. Is there a good or bad time to declare bankruptcy? There is no good or bad time to declare, but it is better to file before you are in a financial crisis. The bottom line as to whether or not you should declare bankruptcy is a personal decision based solely on your personal financial situation. Take the Bankruptcy Test to see if declaring bankruptcy is right for you. What are the steps in filing for bankruptcy? Take the first step now and click on Get Started and submit your information online. Who will know that I've filed for bankruptcy? Bankruptcy filings are a matter of public record. If I change my mind after filing, can I stop the bankruptcy? Only a judge can decide if a filing can be dismissed or not. Even if you get the case dismissed, your credit report will still show that you filed. Do my spouse and I have to file jointly? No. The decision to file individually or together depends on your situation. If only my spouse files, what am I liable for and what happens to my credit? If there is no joint debt, your credit will not be affected. If there is joint debt and only one member files, then the member who did not file will be responsible for the entire debt. back to top What is Chapter 7? In Chapter 7, you are asking the court to discharge (forever release you) from your promise to pay your debts. It is often possible to keep your assets in Chapter 7 because they may be exempt (under law--unable to be touched by your creditors) or because there may be no equity in the assets (the value of the assets is less than the amount owed on them). As a result, it is often possible to keep your house and car (or other assets) when filing Chapter 7. What is Chapter 13? In Chapter 13, you are reorganizing your finances. What this means is that you are using the power of the court to keep your assets, but reduce your payments. Under Chapter 13, you may cure your delinquent mortgage payments and keep your house, reduce the amount you have to pay to purchase your car, or pay off back taxed and child support without interest or penalties. The amount you pay back will be determined by you and your attorney. It will be based on your disposable income and the net equity of the things you own. It is often possible to stop interest from accruing and dramatically lower your monthly payments. How do I know if I should file Chapter 7 or Chapter 13? It depends on your financial situation and the factors involved. Typically, these factors will include the following: the amount of your disposable income, your net equity in your assets, type of debts you already have, and what you are trying to accomplish or obtain by filing for bankruptcy protection. For example, if you have little or no disposable income or your assets have little or no value, or what you owe on your assets outweighs their value, or most of your debt is unsecured, you might want to consider Chapter 7. On the other hand, if you have disposable income and have enough to pay some of your debts on time, or have substantial equity in your house, or if trying to delinquent house payments, or if you have special debts that are difficult or impossible to get rid of (taxes, child support, loans, etc.), you should choose Chapter 13. back to top If I declare bankruptcy, will I have to give up my home? My car? Actually, you may not have to give up your home, your car, or any of your other possessions. Bankruptcy allows you to keep the things you are in risk of losing due to late payments. When you file bankruptcy, the court puts a protective order in place that prevents your creditors from collecting the debt you owe them. As long as the proper type of bankruptcy is chosen, and the property has little to no equity (equity is how much something is worth after deducting how much is owed on it), or is exempt (some possessions are exempt in bankruptcy, which allows you to keep them), it may be possible for you to keep everything you own while still filing bankruptcy. If I own my own business but I file for personal bankruptcy, can my business assets be seized to pay off my personal debts? What about the other way around? It is possible to file bankruptcy, retain your business assets, and continue to operate your business. Your lawyer can explain how in detail during a personal consultation. Does my personal bankruptcy affect my corporation? NO! Your bankruptcy will not affect a publicly held corporation. Your lawyer can explain how in more detail during a personal consultation. back to top What debts are included in bankruptcy? All of your debts are included in bankruptcy and must be disclosed to the courts. This includes: taxes, student loans, home mortgages, car loans, utility bills, credit card bills, doctor bills, and any other debts that you owe. Can I be released from all my debts? You can be released from almost all your debts. However, there are some that cannot be released in bankruptcy. These include taxes (except for income taxes, and as long as they meet the proper criteria), student loans, and/or spousal or child support debts which were obtained because of fraud or other wrongdoing. Also included are debts owed because of intentional injury to another and debts owed as result of injuring yourself or someone else while driving an automobile under the influence of drugs or alcohol. Can I be forced to use funds from any retirement accounts to satisfy any debts? As a general rule, most retirement plans are exempt in bankruptcy. If I file for bankruptcy, does that include any outstanding monies owed to federal/state taxes? Yes. You are required to disclose your debt, and if it meets the proper criteria, it may be discharged in bankruptcy. back to top Will I be placed on a budget? For how long? Only when filing Chapter 13 will you be placed on a budget. You must propose a budget to the court to show how much you can afford to repay on your debts. Will declaring bankruptcy ruin my credit rating forever? NO! In fact, bankruptcy may even improve your ability to get credit! If you have bad credit now, you need to be released from all your current bills in order to get good credit in the future. This is what bankruptcy does. Once you are released from your debts, you can start rebuilding your credit. No one can predict exactly how long this will take, but we have current clients who have purchased a new home or car while under Chapter 13. Under current FHA standards, most people can qualify for a home loan 2 years after filing for bankruptcy. Credit cards can first be obtained by getting a secured credit card and paying on time. This will allow you to get an unsecured credit card. Car loans are available right after filing for bankruptcy. back to top How much will it cost to file bankruptcy? It varies, depending on how much time is involved in the case, and the type of bankruptcy you choose. As a general rule, Chapter 7 bankruptcy is the least expensive type of bankruptcy to file. Often, prices can start as low as $400 (plus court costs of $200). This fee must be paid directly to the attorney before filing the bankruptcy. The cost of Chapter 13 typically is $1,500 (plus court costs of $185), but is paid as part of your bill re-payment plan. back to top | 
