All bankruptcy all the time
Are your unpaid credit card bills mounting or are you being harassed by collectors? You should consider filing for Chapter 7 bankruptcy and take steps to be debt free and regain control of your finances.
Chapter 7 bankruptcy also called liquidation is basically a consumer or commercial bankruptcy. This allows you to keep your home and property while wiping away your debts. Contact Simonetta & Associates PC and we'll help you make an informed decision.
1. What is the difference between a Chapter 7 versus a Chapter 13?
Chapter 7 is also called Straight Liquidation. In a Chapter 7, we can usually eliminate unsecured debts, such as credit cards, medical bills, repossession deficiencies, and signature loans, which allows you to get a fresh start, and financial independence. Chapter 13 is also called Debt Consolidation, or the Wage Earners Plan. Chapter 13 is primarily designed to allow you to stop foreclosures and repossessions, and allows you to make up the back payments in a 36 to 60 month plan. In a Chapter 13, we can also consolidate other bills, such as your car payment, whereby you only pay the value of the car, and not the loan balance. Other debt that can be consolidated includes tax debts, student loans, and child support or alimony arrears.
2. Do I qualify for a Chapter 7 Bankruptcy?
There is no specific dollar amount of debts to qualify for bankruptcy. I have filed bankruptcies for people who owe anywhere from $2,000 to $150,000 or more. The main requirement for filing a Chapter 7 bankruptcy is that you not have a great deal of excess income after the payment of regular living expenses. For instance, if you have a very high monthly income and fairly low monthly expenses (not counting the credit card or other payments which would be eliminated in the bankruptcy), this may show that you have the ability to repay at least some of your debt in a Chapter 13 bankruptcy, and thus not qualify for a Chapter 7.
A typical Chapter 7 bankruptcy case takes about 4 months to complete, if there are no assets. Barring objection, the discharge is entered roughly 120 days after the case is filed.
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3. Are certain debts non-dischargeable?
Yes. The most common non-dischargeable debts are student loans, alimony, child support, property settlement agreements, and certain income tax liabilities.
4. Will I lose any property?
So long as your assets are within the exemptions provided by law, you should not lose any property. A partial list of these exemptions include: the home you are living in up to $50,000.00 equity per person; up to $2,400.00 per person in equity toward one vehicle; up to $5,000.00 per person of personal property, which usually covers household furnishings and personal effects which can be valued at "replacement value prices"; up to $2,500.00 of cash if you do not claim a homestead exemption., all funds in retirement accounts, IRAs, 401-Ks, Annuities; social security income, and disability income.
5. Do I have to list all my creditors?
Yes. The bankruptcy laws require you to list all of your creditors, even if you intend to keep paying them after the bankruptcy. Bankruptcy schedules are signed under the penalty of perjury, and you will be asked under oath at the Meeting of Creditors if all debts were listed.
6. Can I transfer ownership of my assets to someone else prior to filing bankruptcy so I don't lose them in bankruptcy?
No. These type of transfers within one year of filing Chapter 7 bankruptcy will almost always be considered fraudulent, and could result in loss of your Chapter 7 discharge. You could also be subjected to criminal prosecution.
7. If I am married, can I file separately?
Yes. If only one spouse has the majority of the debt, that spouse can file alone.
8. Will my bankruptcy affect a co-signer on the debt?
No. A creditor may continue to try to collect the debt from the co-signor.
9. What is the Meeting of Creditors?
This is a scheduled meeting which takes place approximately 30 days after your bankruptcy has been filed with the court. It is not before a judge, but before a Trustee, which is usually a lawyer appointed by the court to over-see your case. The Trustee has the opportunity to ask you questions under oath about your assets and debts, which usually lasts five minutes or less. Creditors are also allowed to attend and ask you questions as well, although their appearance is rare.
10. How long does it take?
Once we file your case, it usually takes 3-4 months to complete a Chapter 7 case and receive a Discharge of your debts.
11. How many times will I have to go to court?
Once. In a Chapter 7 bankruptcy, you should not have to go before a judge at all. The only appearance you have to make is before the trustee at the Meeting of Creditors.
12. What is a discharge?
A Chapter 7 Discharge is an order signed by the Bankruptcy Judge declaring all of your debt to be discharged. We will discuss with you what debts cannot be discharged.
13. How long does bankruptcy remain on my credit bureau report?
A Chapter 7 bankruptcy can be kept in the public records section of your credit report for 10 years.
14. How long does it take to reestablish credit?
You will probably find you can get credit right away, but at high interest rates. However, most people find it only takes about two years to build their credit up so they can obtain credit with good quality interest rates.
15. Can my employer fire me for filing bankruptcy?
No. Federal law 11 U.S.C. 525 precludes a public or private employer from discriminating against any employee for filing bankruptcy.