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Q:        What is bankruptcy?
A:         Bankruptcy is a federal court process designed to help individuals and businesses eliminate their debts or repay them under the protection of the bankruptcy court and obtain a “fresh start” with regard to their finances.

Q:        Why do I need to hire an attorney to file my bankruptcy?
A:         Even if you have a simple Chapter 7 case, bankruptcy can be an intimidating and time consuming process.  You will need to accurately fill out many forms, research the law, and attend hearings. Bankruptcy cases have many deadlines that the average person is unlikely to be aware of and requirements may not be properly met.  Getting expert help from a team of knowledgeable professionals will help guide you through this process.

Q:        If I file for bankruptcy, will I lose all my possessions?
A:         Many people worry that they will lose everything they own after they file bankruptcy. This is a very unlikely scenario. Within the rules of the bankruptcy code, there are certain “exemptions” that can be used to protect the value of your assets. An experienced Bankruptcy Attorney will be able to advise you should your assets exceed the exemptions available to you.

Q:        Will my family/friends/employer know if I file for bankruptcy?
A:         The only people who receive notification of your bankruptcy filing are those listed as a co-debtor with you, or if they are one of your creditors. While bankruptcy filings are public record and can be accessed by anyone willing to put in the effort, only interested parties to the bankruptcy actually receive notification.

Q:        Can I be fired for filing bankruptcy?
A:         No. The law prohibits government and private employers from discriminating against you because you filed a bankruptcy petition or because you failed to pay a dischargeable debt.

Q:        Does my spouse also have to file bankruptcy if I do?
A:         No. As long as your debts are individual and not joint with your spouse, you may file individually. Your spouse may be asked to provide some basic information about their income, but they will remain unaffected by your filing.

Q:        Will bankruptcy ruin my credit rating?
A:         In many cases, by the time you need to file for bankruptcy, your credit score has already been affected, so as a practical matter, the filing may not have a major impact on your credit score. To the contrary – the filing of bankruptcy will not “ruin” your credit score, but rather, has the potential to fix your credit score by providing you with a fresh start. Some people receive credit card offers in the mail soon after their cases are discharged.

Q:       How long does the bankruptcy process last?
A:        A person is in Chapter 7 for approximately three months from the date of filing, and a person is in Chapter 13 for three to five years.

Q:        Can bankruptcy stop the foreclosure of my home?
A:         Depending on your particular circumstances, bankruptcy can either forestall or prevent the execution of the foreclosure process.  A Chapter 7 will temporarily stall the foreclosure for a limited time.  A Chapter 13 will allow you to enter into a repayment plan (over 3 to 5 years) for the past-due amounts.  After completing this plan, you will be current with your mortgage and the foreclosure will be removed.

Q:        Can I qualify for bankruptcy if I am on a fixed income?
A:         Yes, people living on a fixed income can qualify to file for bankruptcy.

Q:        Will bankruptcy stop a wage garnishment?
A:         Yes.

Q:        Will bankruptcy stop a foreclosure of my home?
A:         Yes, depending on the circumstances. A Chapter 7 can temporarily stall a foreclosure for a limited amount of time, but the lender is entitled to seek relief from the automatic stay. A Chapter 13 will allow you to enter into a repayment plan of past-due amounts, and after fulfilling this plan, you will be current with your mortgage and end the foreclosure.

Q:        Can bankruptcy stop a Trustee Sale for my home?
A:         You will only be able to postpone the Trustee’s sale unless you reach a realistic plan to restructure your mortgage payments.

Q:        Will bankruptcy stop an eviction?
A:         It may delay it, but the property owner is entitled to possession of the property and will be able to resume eviction proceedings with court approval or after the discharge.

Q:        Will a bankruptcy remove a lien?
A:         Most liens, including second mortgage liens and HOA liens, can be removed from your property.

Q:        Do I make too much money to qualify for bankruptcy?
A:         There is a maximum income limit to qualify for bankruptcy under Chapter 7. If you exceed this limit, filing under Chapter 13 may be a better choice for you. 

Q:        What are the main differences between Chapter 7 and Chapter 13 bankruptcy?
A:         Chapter 7 is a liquidation bankruptcy in which you might lose some of your property (with some important exceptions) in order to discharge your debt. Chapter 7 is reserved for individuals with little or no ability to repay their debts in the future, so those who file Chapter 7 may lose non-exempt assets in exchange for having most of their debts erased.

Chapter 13 is a reorganization bankruptcy because it allows you to reorganize your debt burdens and payment schedules. If you file for Chapter 13, you must propose a repayment plan showing your income and how you propose to pay off your debts. Working with the court, your plan will determine how much you need to repay based on your income, debt load, and the value of your property.

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