The following are questions asked by clients during initial consultations. The questions and answers relate exclusively to personal bankruptcies, Chapter 7 and Chapter 13. The answers are short and general in nature and offered solely for the purpose of providing preliminary or general information. The answers do not constitute legal advice and should not be used, or relied upon, as legal advice. For more information, please contact us.
- How does the new bankruptcy law affect my ability or eligibility to file for bankruptcy relief?
- What advantages are there to using an experienced bankruptcy attorney?
- What is the difference between a Chapter 7 and a Chapter 13 bankruptcy?
- If I own my home and file bankruptcy will I be able to keep my home?
- Will I be able to keep my car, my home furnishings and things like that?
- If I file for bankruptcy, who knows I filed?
- If I filed for bankruptcy relief before, can I file again?
- Will all of my debts be eliminated?
- What do I have to do in order to file for bankruptcy relief?
- What happens after the bankruptcy is filed?
- How does the new bankruptcy
law affect my ability or eligibility to file for bankruptcy
Under the new law, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, (BAPCPA), sometimes called the Bankruptcy Code, you still have the right to file for either Chapter 7 or Chapter 13 bankruptcy relief. There are, however, new requirements to satisfy prior to being eligible to file. Two of the new requirements are:
- First, you must complete a consumer credit counseling course through an approved agency. This must be done within one hundred eighty (180) days prior to filing.
- Second, you will need to complete what is known as a “means test” to determine whether you are eligible to file for a Chapter 7 or if you will need to file a Chapter 13.
- What advantages are
there to using an experienced bankruptcy attorney?
There are many advantages to using an attorney to file bankruptcy. Some of them are:
- The attorney knows the bankruptcy law and the procedures to be followed.
- The attorney can give you accurate and timely advice to avoid the numerous pitfalls associated with bankruptcies.
- The attorney prepares and submits all required filings and guides you through the entire process.
- The attorney will work with you so you receive the maximum relief available under the law while protecting as much of your property as possible.
- What is the difference
between a Chapter 7 and a Chapter 13 bankruptcy?
A Chapter 7 is known as a liquidation bankruptcy whereas a Chapter 13 is a reorganization bankruptcy. Liquidation means exactly what it says. After listing all of your assets and debts, all unprotected property is used by the trustee to satisfy your creditors to the maximum extent possible. Under reorganization, your property, your assets, remains in your possession, your debts are “restructured” and you make regular monthly payments to the trustee to pay back a portion or all of your debt over time.
- If I own my home and
file bankruptcy will I be able to keep my home?
If you file a Chapter 13 bankruptcy, generally the answer is, yes. Under a Chapter 7 bankruptcy, however, your home may be at risk. Whether or not it is at risk will be determined based on factors such as, but not limited to: the value of the home, how much you owe on the home, whether or not you are current on your mortgage payment(s). The only way to determine the actual risk, under either a Chapter 7 or a Chapter 13, is to do a thorough evaluation of your particular fact situation.
- Will I be able to keep
my car, my home furnishings and things like that?
The answer to this is similar to the answer about your home. Under a Chapter 13, generally the answer is, yes. Under a Chapter 7, again the answer is going to depend on your particular fact situation. In addition, under Virginia law, certain property is protected and not subject to being used by the trustee to satisfy your debts. This is known as “exempt property” and is identified by statute in Virginia. There are limitations on what property can be exempted as well as a dollar limitation on exempted property.
- If I file for bankruptcy,
who knows I filed?
Although your filing is a matter of “public record,” practically speaking the only people who know you filed are you, your attorney if you use one, the court, the trustee, your creditors and anyone you may tell. Obviously there may be exceptions to this, but the fact you filed for bankruptcy relief is not broadcast to the world.
- If I filed for bankruptcy
relief before, can I file again?
Possibly. The answer depends on when you filed and how your case ended. In addition, the type/amount of relief available to you in subsequent filings may be affected by earlier filings. As an example, if you filed a Chapter 7 and received a discharge, you cannot file for eight years. You should discuss prior filings with a qualified attorney to determine the exact impact on your ability to file a new bankruptcy.
- Will all of my debts
This depends on the type of debt you have and the circumstances under which you incurred the debt. Generally speaking, consumer debt (credit cards, medical bills, personal loans for example) are fully dischargeable. Most student loans, taxes, court costs/fines and things of this nature, with some exceptions, are not dischargeable. You also have the option of reaffirming certain debts. The best way to determine whether or not a debt is dischargeable is to thoroughly discuss your situation with an experienced attorney.
- What do I have to do
in order to file for bankruptcy relief?
Assuming you elect to use this firm to assist you in this process the following is a very general outline of what to expect. The actual actions you take may vary considerably depending upon your particular circumstances.
- We will have an initial consultation (I do not charge for this service). During the initial consultation I will provide you with required bankruptcy disclosures which you will sign and date as having received. We will discuss your specific financial situation and what options you may have available to you. This includes a preliminary estimate as to whether or not you are eligible to file for bankruptcy relief and under which chapter. I will provide you with a copy of the approved credit counseling services for the Eastern District of Virginia and a proposed fee agreement detailing the costs, attorney’s fees and services to be rendered.
- After the initial consultation, and upon my receipt of the signed fee agreement, we begin to collect the information required to prepare the bankruptcy action. This includes, but is not limited to, things such as: credit reports; pay stubs for the last six (6) months; prior year tax returns for both state and federal taxes; record/proof of monthly expenses; and, payoff statements for home mortgages and/or car loans.
- Upon receipt of all required information, a detailed analysis of your financial situation will be completed and a determination/recommendation made as to which type of bankruptcy action is best for you.
- The bankruptcy petition and any other documentation will be prepared. Once prepared, we will go over all of the forms and documents in detail and you then sign the required forms. Once you have signed the required forms, the petition is filed with the court, usually the United States Bankruptcy Court for the Eastern District of Virginia.
- What happens after
the bankruptcy is filed?
After filing the petition we will attend what is known as a Section 341 Meeting of Creditors. This takes place anywhere between five to seven (5-7) weeks after filing. After being sworn in, you will provide testimony, under oath, as to your financial situation and the information provided in the petition and forms filed with the court. If the trustee is satisfied with the information provided, you will be excused. If additional information is required, your hearing may be adjourned/continued to another day to allow time to provide the additional information. You will also be required to complete a financial management course within forty-five (45) days of the Section 341 Meeting. When you complete the course you will receive a certificate of completion which is filed with the court. If you do not complete the course you cannot receive a discharge.