Frequently Asked Questions
What is a Chapter 7 Bankruptcy?
Chapter 7 Bankruptcy, also known as liquidation or straight bankruptcy, involves the your nonexempt assets being applied to your debts where after most, if not all, of your unsecured debt will be discharged, or wiped out.
Most Chapter 7 Bankruptcy filers do not have any nonexempt assets, as such there is rarely a true “liquidation.”
What is a Chapter 13 Bankruptcy?
Chapter 13 Bankruptcy, also known as reorganization bankruptcy, is intended for individuals with a regular income that is above the prescribed limit in the Bankruptcy Code (above the median household income for their state) allowing them to pay off a portion of their debts over three to five years.
Should I file under Chapter 7 or Chapter 13?
The answer to this question is very fact dependent and is based on your goals in filing for bankruptcy (discharge debt, save a house, and/or repay debts over time), your income, and your assets. It is best to talk to an experienced bankruptcy attorney to determine which chapter will be most beneficial for your unique situation.
Will the bankruptcy stop bill collectors from calling?
The Fair Debt Collection Practices Act protects debtors from calling a debtor that they know is represented by an attorney. Once you communicate that you are represented by an attorney and give their their contact information, the calls should stop. If they do not stop, be sure to document who called, when they called (day and time), and what was said, because the debt collector may be subject to civil penalties that can be awarded to you.
Can I use bankruptcy to stop foreclosure on my home?
Yes. The moment a bankruptcy case is filed an Automatic Stay on debt collection efforts is placed in effect by the Bankruptcy Court, which will stop (or invalidate) a foreclosure sale, even if the filing is moments before the home is sold at auction.
Can I use bankruptcy to stop repossession of my car?
Yes. Like above, the moment a bankruptcy case is filed an Automatic Stay on debt collection efforts is placed in effect by the Bankruptcy Court, which will stop a repossession, even if the filing is moments before said repossession.
