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Disclaimer: Please pardon our
appearance as we are in the process of
updating our web site to
reflect the new bankruptcy law changes that went into effect on
October 17, 2005. Any substantive information about bankruptcy
law that appears on any page of this web site may no longer be
applicable or relevant under the new Bankruptcy Code. We
are a debt relief agency. We help people file for bankruptcy
relief under the Bankruptcy Code.
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What is Chapter 13 Bankruptcy?
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Who determines how much my Chapter 13 payments will be?
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Will I be able to keep all of my property?
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Who can file a Chapter 13 Bankruptcy?
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How long will a Chapter 13 Plan last?
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What are the most common reasons for a Chapter 7
Bankruptcy?
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Can I stop the Bill Collectors from calling?
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How long after I file will my creditors stop calling?
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I am married; does my spouse also have to file
Bankruptcy?
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Will I lose my job?
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Can I go to jail if I file Bankruptcy?
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Will my employer find out about my Bankruptcy?
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What happens to my real property and other assets?
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Can I keep my home and personal property?
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Can I keep my car after Bankruptcy?
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Can I keep my credit cards after Bankruptcy?
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Will Bankruptcy stop a wage garnishment?
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Will Bankruptcy stop a foreclosure?
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Will Bankruptcy stop an eviction action?
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Will Bankruptcy stop a judgment?
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Will Bankruptcy remove a lien?
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I am divorced. Will Bankruptcy wipe out my obligation to
pay joint debts?
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I am a co-signer for a debt. How does Bankruptcy affect
my obligation?
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Who notifies my creditors and bill collectors that I have filed
Bankruptcy?
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Do I have to fill out forms?
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Do I have to go to Court?
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What happens after I file my Bankruptcy?
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Who deals with the creditors and bill collectors during
the Bankruptcy?
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What if I forget to list a creditor on my Bankruptcy
papers?
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What happens to my credit rating after Bankruptcy?
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After Bankruptcy, can I get credit?
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How do I re-establish my credit after Bankruptcy?
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Is there anything I should not do if I am contemplating
Bankruptcy?
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If I need to file Bankruptcy again, how long do I have
to wait?
Chapter 13 bankruptcy is a debt
repayment proceeding. The debtor turns over a specified portion of
his/her future earnings to the Chapter 13 trustee, who then
distributes dividends (payments) to creditors who have filed bona
fide claims. The method of determining the dividend distribution is
determined by a Chapter 13 Plan which is filed with the Bankruptcy
Court by the Debtor. The debtor receives a discharge of all
dischargeable debts after the Plan is completed and all payments
under the Plan have been made.
The amount of your Chapter 13
payments are based upon your income, your monthly living expenses,
and the amount of your total debts. This is known as the means
test which is a pre-determined standard of living based on Internal
Revenue Service standards. The Court will allow you to keep
and spend so much of your income as determined by the means test.
To retain all of your property
your Chapter 13 plan must satisfy the criteria required for court
approval or "confirmation". By filing a Chapter 13 Plan, you
arrange for the repayment of your debts and for the repayment of
liens on your property. In Chapter 13 cases the debtor must
pay creditors at least what creditors would receive if the debtor
sold or "liquidated" his/her property. So long as
your Chapter 13 plan satisfies this criteria you should be able to
keep all of your property.
You must reside or have a domicile,
a place of business, or property in the United States; you must not
have had a bankruptcy filing dismissed for cause within the last 180
days; you must have a regular income; and your total debts cannot
exceed $1,446,550 (secured debts cannot exceed $1,010,650 and
unsecured debt cannot exceed $336,900).
Chapter 13 Plans are for up to 36
months long [or sixty (60) months where the debtor is making his
best efforts]. After that time, the Debtor is discharged [forgiven]
for his debts.
The most common reasons for
consumer bankruptcy are (a) loss of a job or long-term layoffs; (b)
loss of overtime hours; (c) lengthy illnesses and large medical
expenses; (d) death or disability of a spouse; (e) separation,
divorce and marital problems; (f) seriously over extended credit;
and (g) large unexpected expenses.
YES. One of the major benefits of
filing for protection under Chapter 13 is that most creditor actions are
stayed (stopped). This means that debt collection efforts and
foreclosure is halted immediately. Chapter 13 also protects
co-debtors or cosigners from collection activity while you are
making your Chapter 13 payments.
Once a creditor or bill collector
becomes aware that you have filed for bankruptcy protection, he or
she must immediately stop all efforts to collect the debt. When your
bankruptcy is filed, the court will mail a notice to all of the
creditors listed in your schedules. This usually takes a week to ten
days. You will receive a copy of the same notice which goes out to
creditors. If this is not soon enough to stop a garnishment or
repossession, then you should have your attorney inform the creditor
immediately.
If a creditor continues to use
collection tactics once informed of the bankruptcy, they may be
liable for court sanctions and attorney fees for this conduct.
No. In some cases
where only one spouse has debts, or one spouse has debts that are
not dischargeable, then it might be advisable to have only one
spouse file. Also, debts which your spouse is jointly liable
are subject to the co-debtor automatic stay.
No. Bankruptcy
laws prohibits discrimination based upon a debtor filing for
protection under the bankruptcy laws.
ABSOLUTELY NOT.
There are no debtors prisons in the United States. As a matter of
fact, the right of bankruptcy is governed by the U. S. Constitution
in Article I, Sec. 8, cl.4.
Under normal circumstances, unless
your employer is a creditor, your employer will not know that you
have filed bankruptcy. However, there is a growing trend in
Bankruptcy Courts to require wage withholding to fund the Chapter 13
Plan. This means that your employer may receive an order from the
Bankruptcy Court to deduct your Chapter 13 payment from your check
and send it directly to the Chapter 13 trustee. Consult your
attorney about local procedure.
Once the Chapter 13 bankruptcy
is filed, all the property of the debtor at the time of the filing
and certain other property to be received in the future, becomes the
property of the bankruptcy estate. This means that the bankruptcy
trustee will take control of all non-exempt property for purposes of
satisfying the creditors. However, once the Chapter 13 Plan is
confirmed [approved by the court], control over all of your
property, except for future wages, will be returned to you.
YES, provided that you make
your required monthly payments to the Trustee and to your creditors. One of the
main reasons for filing a Chapter 13 bankruptcy is to keep your
home. Usually, if you are behind on your house payments, your
Chapter 13 Plan will provide that you begin making your current
monthly payments and not get any further behind. Any payments you
are behind on will be paid to the mortgage company through the
Chapter 13 trustee.
YES, provided that you
reaffirm the car loan and stay current with all payments. If your car
is mortgaged to a creditor as security for a loan, you will be
expected to pay an amount to the creditor at least equal to the
value of the automobile at the time you file your Chapter 13 Plan.
Any amount due to the creditor over the value of the car will be
paid as an unsecured debt..
Generally, NO. Under some
circumstances you may be able to keep your credit cards. There are
many factors which must be considered. Some of those include the
credit card balance at the time of the bankruptcy, what the credit
card company is willing to do and your ability to pay the present
and future credit card debt. Under Chapter 13, the Bankruptcy Court
must usually approve any new debt you make, which includes future
credit card charges.
Yes.
Yes, provided that
you have not previously filed bankruptcy cases which were dismissed. A home is an
asset usually secured by a mortgage. While a Chapter 13 will stop a
foreclosure, unless you begin making current payments, a creditor
will be successful in obtaining permission from the Court to
institute a new foreclosure proceeding. Assuming you can make your
monthly payments after you file a Chapter 13 Plan, you can catch up
your arrearages under Chapter 13 and avoid foreclosure of your home.
Unless you can begin making your
future rent payments on time, Chapter 13 may only stop an eviction
for a while. Like a home mortgage payment, unless you can stay
current from the date of filing a Chapter 13 forward, the owner will
be entitled to possession of his property and at best you will be
able to remain in the property until the owner can obtain an order
from the Bankruptcy Court granting relief from the automatic stay
and begin eviction proceedings in state court. If you can stay
current, then you can catch up your back rent through the Chapter 13
Plan.
Yes. Most civil
judgments are stopped by bankruptcy.
Under some circumstances once the
bankruptcy proceedings have started, a special motion can be filed
to remove certain liens. It will take a bankruptcy court order to
remove them. This is a complicated area of the bankruptcy law and an
attorney should be consulted.
In come cases, YES.
In October of 1994, Congress amended the Bankruptcy Code to provide,
generally, that obligations arising out of a divorce or property
settlement agreement are non-dischargeable. If your Chapter 13 Plan
provides for payment in full of these obligations, then they will be
discharged. However, if your Plan does not provide for payment in
full, these obligations will not be discharged at the end of your
Chapter 13 Plan and you will still have to pay them outside of
Bankruptcy Court. While you are in Chapter 13, creditors will not be
permitted to collect the joint debts either from you or from your
former spouse directly.
If the debt is primarily your debt,
the you must provide for payment under your Chapter 13 Plan. If the
debt is primarily the debt of the person with whom you cosigned,
then you may either provide for payment by you of the debt under
your Chapter 13 Plan, or you may provide that the debt will be paid
by the co-debtors. While you are in Chapter 13, the co-debtors is
protected against collection efforts outside the Bankruptcy Court..
After your bankruptcy is
filed, the Bankruptcy Court mails a notice to all the creditors
listed in your schedules. This usually takes a week to ten days. If
this is not soon enough, then you should have your attorney inform
the creditors immediately.
YES. You will
receive a detailed questionnaire from my office to be completed. It
is important that you complete all of the questions, even though
many of them may not apply to you or to your situation. I will take
that questionnaire and complete the bankruptcy petition and
schedules based on the information which you have provided. There
could be between 20 and 40 pages in your petition, schedule and
other papers filed at the time of your bankruptcy.
You will be required to list
ALL of you property and ALL
of your debts. At the initial court appearance, you will be asked
under oath whether you have listed all of your property and all of
your debts and you must be able to truthfully answer that you have.
After your we have prepared the
bankruptcy petition and schedules, you or you and your spouse (if
filing jointly) will review them and, if they are correct, sign
them. They will then be forwarded to the Court along with the
necessary filing fees.
Yes. Within about
30 to 45 days after you file the bankruptcy, you will have to attend
a hearing presided over by the Trustee or by the Bankruptcy
Administrator. This hearing is called the First Meeting of Creditors
or Section 341 Meeting. At this hearing, the Trustee or the
Bankruptcy Administrator and the trustee will ask questions to you
under oath regarding the content of your bankruptcy papers, assets,
debts and other matters. After the Trustee is done, your creditors
will have an opportunity to ask questions to you regarding the
location and condition of your property, hazard insurance coverage
and matters related to your financial affairs. Don't worry, I will
be there to represent you and I will help you prepare for the
hearing.
After this hearing you will
normally not need to return to court unless a creditor files a
motion or an adversary action. This is the exception. Generally,
debtors will only need to appear in the Bankruptcy Court only once.
Once you file for Chapter 13
protection, the Bankruptcy Court will issue an order requiring that
you make the payments to the Chapter 13 Trustee which you proposed
in your Plan. The Court will also set a date for you Section 341
meeting of creditors and for hearing on confirmation [approval] of
your Plan. Sometimes the 341 meeting and confirmation hearing are
combined into one hearing. Once your Plan is confirmed, you will be
required to make the payments which you proposed to the Chapter 13
Trustee and, if appropriate, keep you home mortgage [or your rent]
from getting any further behind. Once you have completed all of your
payments, the Court will issue a discharge to you which will relieve
you from any further obligation on the debts which were covered by
your Plan.
Your attorney and the Chapter 13
Trustee deal with your creditors for you. You should refer all
creditors and bill collectors either to you attorney or to the
Chapter 13 Trustee.
29. What if I forget to list a creditor on my bankruptcy papers?
You can file an amendment to your
schedules up to a certain time before discharge. If the amendment is
timely filed then the omitted creditor is added to the bankruptcy.
It is perjury to intentionally omit a creditor. However, if you do
not know that a creditor exists and there are no assets for your
creditors, the debt will be discharged.
The bankruptcy is a judgment and
may be listed in credit reports for a period of up to 10 years.
However, by the time most debtors have filed bankruptcy, their
credit rating is already damaged by late payments, repossessions,
law suits, foreclosures and other debt problems which will also be
reported for a period of up to 10 years.
Surprisingly to most folks --
YES. This is up to each particular credit grantor.
In my experience, it is possible to get credit if the credit grantor
believes and understands your reasons for filing the bankruptcy.
Also, creditors realize that after you receive a discharge in
bankruptcy, you are virtually debt free with the same income and
with the same assets as before you filed bankruptcy.
There are at least two ways to get
credit after a bankruptcy. First, one of your existing creditors may
continue to grant you credit based upon your past dealings with
them. Second, today there are several banks offering secured credit
cards. This means that the credit limit is based upon the amount of
security [cash] given to the card issuer.
There are people who "specialize" in the business of credit repair.
BEWARE. Some of the schemes they offer to you are
not only worthless, they may be illegal. Consult your attorney
first. You will almost certainly receive at least one solicitation
from one of these "professionals".
There are several areas related to
this question. You should consult your attorney. In particular there
are three items worth mentioning.
a. Under bankruptcy law, certain
luxury purchases over $1,000 within 60 days of the bankruptcy filing
are presumed nondischargeable.
b. Under bankruptcy law, cash
advances aggregating $1,000 within 60 days of the bankruptcy filing
are presumed nondischargeable.
c. Debts involving materially false
financial statements are nondischargeable under certain
circumstances.
If you have completed your Chapter
13 Plan, and paid at least 70% of your unsecured debt, there is no
waiting period. If your bankruptcy was dismissed, you must usually
wait for 180 days to re-file. You may file a Chapter 13 at any time
if your new Plan proposes to repay 100% of your debts.
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