Frequently Asked Questions

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1. What is the difference between a Chapter 7 and Chapter 13 bankruptcy?

    

   A Chapter 7 bankruptcy is the most commonly filed bankruptcy case.  It is often referred to as a “straight” bankruptcy or “liquidation.”  At the conclusion of this proceeding, the filer is relieved of most unsecured debt obligations, including credit card debt, medical bills and signature loans.  Most people filing Chapter 7 bankruptcy do not lose any property; however, there are limits to the value of assets a person can protect.  Also, a person may earn too much income to file a Chapter 7 case and may instead need to file a Chapter 11 or Chapter 13 payment plan instead.

    

   A Chapter 13 bankruptcy is a 3-5 year structured payment plan administered by a third party known as a Trustee.  The filer makes monthly payments to the Trustee who distributes these payments to creditors.  The amount of your payment depends on a number of factors, including your income.  Chapter 13 is a very effective choice for a person who has fallen behind in their mortgage payments and needs time to catch up on the arrears.

    

2. Will a bankruptcy filing stop a pending foreclosure sale of my home?

    

   Yes, except in the situation where you have filed multiple bankruptcy cases.

    

3. How much does it cost to file bankruptcy?

    

   There are two components to the cost of filing bankruptcy; costs such as the filing fee and credit report fee, and the fee you pay to the attorney for her services.  The fees I charge for a bankruptcy filing depend upon the type of bankruptcy and the complexity of the case.  All fees charged by bankruptcy attorneys are disclosed to the Court and are subject to oversight.  Competent bankruptcy attorneys generally charge similar fees.  I strongly advise against choosing an attorney based on cost alone as there is no such thing as a “simple” case and there is no substitute for quality.  We will discuss fees, costs and payment arrangements at our first meeting.

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4. Do you charge for the initial consultation?

    

   No.  Filing bankruptcy is one of the most difficult decisions a person will make in his/her lifetime.  Clients need to have absolute trust and confidence in their attorney and be able to work with that professional closely.  The best way to start this relationship is with an informal meeting that does not involve any pressure or financial obligation.

    

5. I was just served with a Summons and a Complaint from a credit card company.  What should I do?

    

   Call me immediately to schedule an appointment.  An unanswered lawsuit could result in the entry of a default judgment against you.  The creditor could then turn the judgment into a lien filed against your home or start a garnishment of your wages.  A bankruptcy filing generally stops this from happening.

    

6. I have moved several times and do not have all my bills.  What should I do?

    

   You are required to list every person or company you owe money to in your bankruptcy case.  Continue to keep all bills and collection notices you receive.  Prior to filing, and with your authorization, I will run a high-level, comprehensive credit report prepared by a firm that services bankruptcy professionals.  This report should capture almost all of your debt owed to third-party, commercial creditors.

    

7. How long will a bankruptcy remain on my credit report?

    

   A bankruptcy filing can remain on a credit report for 10 years.  Most of my clients, however, report that within 2-3 years of the conclusion of their case, they are able to obtain credit and have been able to completely recover from this difficult chapter of their lives.  Certain lenders specialize in providing credit to people who have previously filed a bankruptcy case.

    

8. Can I keep my house and car if I file a Chapter 7 bankruptcy?

    

   Most people do not lose any property in a Chapter 7 bankruptcy case because the value of their property is less than what they are legally entitled to exempt or protect for themselves.  In our first meeting, we will discuss the value of your assets and I will advise you if these assets are safe.  If the value of your property is too high to protect, we will discuss other options, such as a Chapter 13 payment plan, which does not involve any property liquidation.

     

9. Are student loans discharged in bankruptcy?

    

   Most student loans cannot be eliminated through a Chapter 7 filing.  They can, however, be included in a Chapter 13 repayment plan.  There is an exception to this general rule for filers who can show that they would suffer extreme hardship if the student loan obligations were not discharged.

    

10. Are taxes discharged in bankruptcy?

     

    It depends on the type of tax and other factors, such as when the return for that tax year was filed and when the taxes for that tax year became due.  If you owe delinquent taxes, I will investigate your particular circumstances and advise you about the potential dischargeability of these tax debts.

     

11. Do I have to appear in Court if I file a bankruptcy case?

     

    Every person or entity filing a bankruptcy case must appear at at least one hearing called the “Meeting of Creditors” or “341(a) Meeting.”  The meeting is conducted by the Trustee assigned to your case.  Your Trustee will administer an oath to you and ask you basic questions regarding the nature of your income, debts and assets.  I will prepare you for your hearing and I will be seated next to you while you give your testimony.

     

12. Is there life after bankruptcy?

     

    Yes!  After having practiced bankruptcy law for more than 30 years, I have had the frequent opportunity to speak with many clients at various intervals post-bankruptcy filing.  Nearly all of my clients report that filing bankruptcy gave them the “fresh start” they so desperately needed and that they are now enjoying productive, prosperous and happy lives.

     

13. What is a Chapter 11 case?

     

    A Chapter 11 case is a reorganization proceeding filed primarily by business entities.  All of the Debtor’s pre-filing debt is addressed in a Chapter 11 Plan that creditors review and vote on.  This type of bankruptcy allows companies to stay in business while they repay debt.  Some of the entities I have helped reorganize under this Chapter include contractors, retail stores, real estate developers and technology firms.

     

14. My spouse and I are getting a divorce. Should we file bankruptcy first?
     

    A typical divorce case involves the division of assets and debts.  Sometimes, it makes sense for divorcing parties to file bankruptcy together first so that it is not necessary for them to determine who pays which debt.  For divorcing parties to file together, however, they must be able to communicate and work together.  At our first meeting, we will discuss the benefits and disadvantages of filing bankruptcy separately or together, and the appropriate timing for doing so.

     

15. Can I leave certain debts out of my bankruptcy?
     

    Generally, no.  All debts must be listed in the Schedules you file with the Court.  However, you may voluntarily choose to pay certain debts back, such as your mortgage or vehicle loan.  You can also choose to “reaffirm” certain debts, which means that you will enter into a new agreement to pay a particular obligation.  I will assist you with that process.

     

16. Can child or spousal support obligations be discharged?
     

    No.  A provision of the Bankruptcy Code states that these debts are not affected by a bankruptcy filing.