Question 1

What is Chapter 7 Bankruptcy?

Accepted Answer

In some cases with Chapter 7 bankruptcy, people suffering severe debt will sell a number of assets in order to pay certain creditors as much as possible. In other cases, these types of bankruptcies are labeled as “no asset” bankruptcies. This means it is not required for assets to be sold during the process. Chapter 7 bankruptcy is useful to become free of some debt and in order to pay off portion of principal balances of unsecured debts. Unsecured debts might be matters such as credit cards and medical expenses.

Question 2

What are Some Examples of People Who Might Choose Chapter 7?

Accepted Answer

Oftentimes, people who have experienced a long interval of unemployment will file for Chapter 7 bankruptcy. These unemployment cases might be the result of medical issues that prevented persons from working. Furthermore, people with fewer assets might find Chapter 7 bankruptcy more beneficial.

Question 3

What is Chapter 13 Bankruptcy?

Accepted Answer

Chapter 13 bankruptcy reorganizes a person’s debt into a manageable payment plan. Most often, these payment plans are scheduled into three- or five-year plans. On average, Chapter 13 bankruptcy is easier to qualify for. In addition, this type of bankruptcy allows for a person to keep assets such as homes and cars.

Question 4

What is an Example of Someone Who Might Choose Chapter 13?

Accepted Answer

Chapter 13 bankruptcy is also referred to as a “wage earners” bankruptcy since it is designed for persons who have a regular source of income. Therefore, a person who receives a normal income might file for this type of bankruptcy.

Question 5

Can My home Be Saved from Foreclosure by Filing for Bankruptcy?

Accepted Answer

In most cases of Chapter 13 bankruptcy, a person does not run the risk of losing his/her home since this type of bankruptcy allows the debtor to remain in possession of their hard-earned assets.

Question 6

What is a Bankruptcy Discharge?

Accepted Answer

A bankruptcy discharge relieves a debtor of certain types of debt by releasing personal liability. In this case, a debtor is not legally liable to pay any debts that have been discharged. discharges are permanent and they disallow creditors from taking any action on discharged debts.

Question 7

How will Bankruptcy Affect my Job?

Accepted Answer

It is unpermitted for an employer to fire or discriminate against an employee because the employee filed for bankruptcy. In addition, an employee cannot be demoted, receive a reduced salary, or be removed from responsibilities as a result. If a person is discriminated against, or fired, because the employee chose to file for bankruptcy, the employer may suffer consequences of such action(s).

Question 8

How will Bankruptcy Affect my Credit?

Accepted Answer

In general, bankruptcy might slightly affect a person’s credit score. However, most of the time, it will not cause extreme damage to a debtor’s credit score. Of course, this depends on a number of factors, one of the most important deals with how high or low a person’s credit score was prior to filing. Most often, a person filing for bankruptcy already has a low credit score, making bankruptcy less of an impact concerning the credit score. On the other hand, a person who had a good credit score prior to filing bankruptcy might notice a greater impact on their credit score. In addition, a debtor’s credit score may depend on the debtors debt-to-asset ratio.

Question 9

If I file for bankruptcy, Will it Remove My Debt for Good or Will the Debt Show Up on My Credit Report Again?

Accepted Answer

Yes. Filing for bankruptcy and receiving a “discharge” of your debt removes the majority of your debt forever. The discharge is a Federal Court Order and if the creditor reports a discharged debt on your credit report or attempts to collect the debt, you may be able to file a lawsuit against them. Some debt, like taxes, child support, student loans, court restitution, and mortgage can be included in bankruptcy but may not be fully discharged upon completion of the plan.

Question 10

Will Everyone Know I Filed for Bankruptcy?

Accepted Answer

No. This not true. Bankruptcy allows you to get rid of certain debts without ever having to pay for them. This means only creditors and people you tell will ever know you filed for bankruptcy.

Question 11

Will You Lose Everything You Have?

Accepted Answer

No, you will not lose everything you have. In fact, most people who file for bankruptcy will not lose anything. In most states, there are exemptions that safeguard houses, cars, household furnishings, wages, retirement plans, and personal injury claims.

Question 12

Will I Be Able to Buy Anything Ever Again?

Accepted Answer

Yes. There are no restrictions or laws that state you are not allowed to purchase homes, household goods, furnishings, or cars one you receive your discharge in bankruptcy.

Question 13

Can I Get Credit Again?

Accepted Answer

Research shows you will be more likely to get credit after you have filed bankruptcy than if you do not file at all. This is because bankruptcy removes the debts you cannot afford to pay. This allows you to be in a position to take on more credit while paying off any leftover debts on time. In addition, having less debt to pay makes you look more appealing to lenders.

Question 14

Will Bankruptcy Really Harm My Credit Score for 10 Years?

Accepted Answer

This is a common misconception. In most cases, bankruptcy is reported on your credit report for 10 years. However, because something is reported on your credit report does not mean it will have a negative effect on your standing.

Question 15

Is it Difficult to File for Bankruptcy?

Accepted Answer

Many people fear the thought of bankruptcy because they think it is difficult to accomplish. However, an experienced bankruptcy attorney can make the process as seamless and comfortable as possible. They can explain what will happen, what you can expect, and how they can help you and your family achieve a happier future as soon as possible.

Question 16

Can I Choose Which Properties and Debts are Listed in My Bankruptcy?

Accepted Answer

No, it is unlawful to do so. According to laws, you must list all debts and properties. A skilled Dallas bankruptcy lawyer can explain how this can actually help you rebuild a better life.

Question 17

I’m Considering Going With a Debt Settlement Company Instead of Filing Bankruptcy. Why Should I Go With Bankruptcy?

Accepted Answer

Debt settlement programs rarely work as advertised and forgiven credit card debt is treated as an income by the IRS so, you might end up having to pay taxes on it.

Question 18

Can bankruptcy eliminate the interest on my tax debt?

Accepted Answer

Bankruptcy can help reduce or eliminate penalties and interests associated with outstanding tax debt.

Question 19

Is Discharged Debt Taxable?

Accepted Answer

With bankruptcy, discharged debts have no income tax consequences and it is excluded from gross income. With other debt relief programs you risk the possibility of receiving a tax bill after your debt has been canceled, but that’s not the case with bankruptcy.

Question 20

I Know I’m Going to Owe the IRS If I File My Taxes, so I Am Considering Not Filing This Year Because I Can’t Make the Payments. Is It Okay If I Don’t File?

Accepted Answer

Without doubt you should still file your taxes. Even though you aren’t able to make payments, filing your taxes and not paying immediately will put you in a much better position than if you don’t file at all.

Question 21

How can filing for bankruptcy help stop my tax garnishment?

Accepted Answer

taxing authorities must immediately stop garnishing your wages as soon as they receive the notification of bankruptcy, no matter the type of tax that you owe.

Question 22

What If I Never Received the Notice?

Accepted Answer

They are not obligated to ensure that you received the Notice. It is possible that the Notice was mailed to your previous mailing address.

Question 23

Are they allowed to notify me at my job?

Accepted Answer

Yes, they’re permitted to send the notice to your home or work place.

Question 24

What is the IRS required to send me before garnishing my wages?

Accepted Answer

The IRS first has to send you a Notice and Demand for Payment. If you refuse or neglect the notice, they’ll then issue a Final Notice.

Question 25

Can’t my employer stop the wage garnishment?

Accepted Answer

No, it would be against the law. Your employer was sent an official notice giving them the amount to hold back and cannot refuse the garnishment.

Question 26

I Just Got a Letter That the IRS Is About to Start Garnishing My Wages. Do You Know If This Is Legal and What Percent of My Wages They Are Allowed to Garnish?

Accepted Answer

Yes, it is legal for the IRS to garnish your wages due to taxes owed. According to federal law, the payments are limited by 25% of your income. However, they’re permitted to continue garnishing your wages until the entire debt is paid in full.

Question 27

I Have Already Filed my Case But I Need to Add a Creditor.

Accepted Answer

Question 28

What Can I Do if My Bankruptcy Case is Dismissed?

Accepted Answer

If your case is dismissed, it’s not the end of your bankruptcy process. You really need to come to our office and explore your legal options. The reason being, after you filed a bankruptcy case regardless of whether it’s discharged or dismissed, it’s still gonna show up on your credit. There are some options regarding refiling your case, if you need some eligibility requirements which allow you another crack at the process to be able to get your relief from your creditors and complete a successful case. Or there’s an option in Chapter 13 to convert over to a Chapter 7. You may have to surrender some collateral like a house or car but at least you’ll be able to get a discharge of all your unsecured creditor. So you can at least get somewhat a fresh start going forward after the dismissal.

Question 29

What Documents Do I Take to my 341 Meeting of Creditors?

Accepted Answer

Question 30

Who Must Attend the 341 Meeting of Creditor’s?

Accepted Answer

Question 31

Who Will Find Out if I File a Bankruptcy?

Accepted Answer

Question 32

Can I Get Rid of Debt Assigned to Me in a Divorce?

Accepted Answer

Question 33

When is my 341 Meeting?

Accepted Answer

Question 34

What Happens if I Win the Lottery or Receive a large Inheritance While in Bankruptcy?

Accepted Answer

Question 35

Where Do I Send My Chapter 13 First Trustee Payment and How?

Accepted Answer

Question 36

Why Did I Receive a Proof of Claim From a Creditor in the Mail?

Accepted Answer

Question 37

Where Do I Sign on My Reaffirmation Agreement?

Accepted Answer

Question 38

I Got a Letter Stating I Need to Go to Court. What Do I Need to Do?

Accepted Answer

Question 39

I Am Still Getting Notices From My Mortgage Company After I Surrendered My Property

Accepted Answer

Question 40

How Long Does a Chapter 13 Bankruptcy Take?

Accepted Answer

Question 41

Can Bankruptcy Change Your Mortgage Rate?

Accepted Answer

Question 42

How Much of my Income Tax Return Will I Receive in my Chapter 13 Case?

Accepted Answer

Question 43

Is the Wage Directive Mandatory?

Accepted Answer

Question 44

What is a Chapter 13 Bankruptcy Discharge?

Accepted Answer

Question 45

What is a Chapter 13 Bankruptcy Plan?

Accepted Answer

Question 46

Do I Have to Pay My Creditors in Full Under Chapter 13 Bankruptcy Plan?

Accepted Answer

Question 47

How Much Will My Payments Be?

Accepted Answer

Question 48

Do I Make My Plan Payments to Your Office?

Accepted Answer

Question 49

How Long do I Have to be in a Chapter 13 Bankruptcy?

Accepted Answer

Question 50

How Long Does a Chapter 7 Bankruptcy Take?

Accepted Answer

Question 51

My Car is in Danger of Being Repossessed. What Can I Do?

Accepted Answer

If you’ve retained our office to file a Chapter 7 Bankruptcy case and you’ve been making your minimum payments in order to take care of our attorney’s fees so that we can file your case but somehow you’re fall behind on the payments of your car and that threatening to repossess, you must immediately call our office and schedule an appointment to come in. At Chapter 7 Bankruptcy case will allow you to discharge all unsecured debt but it won’t let you save a car if you fall behind your payments. Instead, you would need to file a Chapter 13 Bankruptcy case so we can pay back that car over 3 or 5 year repayment plan so you’d be able to save the car and not have it repossessed.

Question 52

Can I Still Use my Credit Cards if I am Considering Filing for Chapter 7 Bankruptcy?

Accepted Answer

Once you decide that you retained a bankruptcy attorney and you’re going to file a Chapter 7 Bankruptcy case in the near future, you cannot use your credit cards. And the reason is if you’d continue to use your credit cards and you have no intentions of paying them back that is bad faith. Every single credit card company does a check and reviews their files when someone files for bankruptcy. If you have a Visa card and 3 months before filing the bankruptcy case you exhaust the limit and you charged a 7000$ or 8000$ of purchases on there and turn around and file a bankruptcy case, you can guarantee that it’s going to draw some red flags by your Visa company and they’re going to send you a notification that they want you to pay that back or object to your Chapter 7 Bankruptcy discharge. So it’s a good rule of thumb that if you do not intend to repay it, and you know that you’re gonna be filing bankruptcy don’t make the charge.

Question 53

I Qualify for a Chapter 7 Bankruptcy. What Happens If I get Behind on Mortgage Payments?

Accepted Answer

Question 54

How Long Will My Chapter 7 Bankruptcy Last?

Accepted Answer

Question 55

Can Anyone File a Chapter 7 Bankruptcy?

Accepted Answer

Not every one is eligible to file a Chapter 7 Bankruptcy. Some of the eligibility requirements to file a Chapter 7 Bankruptcy case is that you must have not filed a Chapter 7 and received a discharge in the prior 8 years before filing of the current case. You cannot also have received a Chapter 13 discharge within 6 years of filing the current case. Those are basic requirements as far as filing. Also, we have to look at your income and your expenses. In 2005 Congress changed the bankruptcy law to make it more standardized and we have to fill out a form, it’s called a B22 form where we list your 6 months of gross income as well as income and expenses associated with your family size, and where you live. And after we do that, if you’re below a certain level, you’re eligible to Chapter 7 Bankruptcy. The theory behind this is, if you can afford to pay something back towards your unsecured debt, then the Courts and the Congress want you to go instead with a Chapter 7 to a Chapter 13 Bankruptcy plan which is a repayment plan.

Question 56

Can I Keep My Credit Cards After I File Chapter 7 Bankruptcy?

Accepted Answer

Question 57

How Long After My Bankruptcy Was Discharged Can I File Again?

Accepted Answer

Question 58

My Bankruptcy Case Was Dismissed, What Do I Do Now?

Accepted Answer

Question 59

Do I Need to Attend My Confirmation Hearing?

Accepted Answer

Question 60

What if your office already has all my documents for my confirmation hearing?

Accepted Answer

Question 61

Can I Skip My Bankruptcy Trustee Payment This Month?

Accepted Answer

Question 62

I Received a Letter That I Haven’t Been Making My Mortgage Payments! I’m Current With My Mortgage.

Accepted Answer

Question 63

Why is the claim so much higher than the balance on my last statement?

Accepted Answer

Question 64

What if the Bankruptcy Court doesn’t Approve a Chapter 13 Plan?

Accepted Answer

When you file for bankruptcy, there are several tests that you must meet in order to complete a successful Chapter 13. Number one is Feasibility . What that means is when you file the case and we say,”We wanna pay back these creditors and we’re gonna make a payment of 1000$ a month we have to demonstrate to the trustees and the court that you have resources and the funds to make that 1000$ payment. And when we look at your income and your expenses and we show that you can only make a 500$ payment that’s gonna trigger a feasibility objection. So in order to pay the creditors you want to pay and keep the property that you want to keep, you’re gonna need to find another way to make up that income. There’s a couple of ways to do that: Number one is you can get another or second job or another source of income whether it’s from employment or whether some contribution from a family member or a friend who’s willing to make those payments toward you to make up the difference or you’re willing to reduce some expenses to you’ll have necessary surplus of a 1000$ to make your plan payment. Another test that you have to file when you file for bankruptcy is disposable income. What that means is if you have a lot of income, more income that you need to get caught up on the things that you want to pay for. We look at your income and expenses and devote a certain amount of your monthly surplus towards your unsecured creditors and if we’re not devoting enough where the trustee objects then we have to prove that up and pass that test. There’s one other additional test and it’s called the best interest of your creditors. And that means if you file a Chapter 13 bankruptcy case and you have some investment property or you have some stocks or bond that are above the standard amount that we can accept, you could liquidate that property and pay back your creditors therefore you have the opportunity to either convert and file a Chapter 7 bankruptcy case, liquidate that property and pay your creditors or stay in the 13 and pay back the difference that the creditors would have received if you had liquidated it.

Ask the Expert: How much debt are you ready to take on to make your Christmas ‘merry’?