Do I have to pay my bills during the bankruptcy proceeding?
11) Do I have to pay my bills during the bankruptcy proceeding?
For the most part, the answer is no. For specific property (usually secured) such as your car loan or your houses mortgage that you plan on keeping you should probably continue to make payments. Also, for day to day expenses such as rent and utilities you should also continue to make payments. You should stop making payments on other old debts incurred prior to the bankruptcy such as credit card debts.
12) How long does a bankruptcy take?
For a typical chapter 7 case, the discharge of your debts usually takes approximately 3-4 months. A chapter 13 takes anywhere from 3-5 years.
13) How Do I know if it's Time for me to File?
If your creditors are attacking your assets and income and you are in debt way over your head, look into the "fresh start" filing bankruptcy may be able to provide you with. It seems the stigma attached to filing bankruptcy has greatly diminished over the last decade as a fast increasing percentage of the population file every year.
14) Is hiring a bankruptcy petition preparer to help me file my bankruptcy petition a smart move?
It depends on your case. However, the facts are that the vast majority of bankruptcy cases could have been successfully handled without an attorney. However, you must keep in mind that they cannot give you legal advice and charge anywhere from $150-250 just to type your petition.
15) Will I lose my car and my house?
As long as you continue to keep up to date on your
payments on the loan that secures the property, there should not be a
problem keeping your house or car, even after the bankruptcy
proceeding is concluded. If you want to play it safe contact your
creditor to reaffirm the debt directly. This reaffirmation agreement
must then be filed and approved by the court.
16) Does Bankruptcy Devastate my credit?
Although the record of filing bankruptcy may technically stay on your credit for up to 10 years, often by making payments on time subsequent to your bankruptcy you can regain an "A" credit rating within 2 years of your discharge.
Ironically, in many cases filing bankruptcy may actually help your credit rating because discharging your debts greatly improves your debt to income ratio which is a major criteria creditors use in judging your "creditworthiness" (see below). In fact, many people report a flood of pre- approved credit cards within weeks of a bankruptcy discharge.
By all accounts, bankruptcy no longer has stigma attached to it that it once did. Perhaps, this is one of the reasons that the number of filings has been dramatically increasing over the last several years.
17) Can I keep any of my existing credit card accounts?
The credit card accounts that you have a zero balance on are not technically creditors and thus are not discharged in bankruptcy. Often these creditors will allow you to keep your credit with them.
If you do have an outstanding balance when you file, you may still be able to keep your account. To do this you usually must agree with the creditor to pay off the balance. Once you make an agreement with the creditor you must file the "reaffirmation agreement" and get the approval of the bankruptcy court. It is advisable to consult legal assistance before you reaffirm an otherwise dischargeable debt. Some creditors will allow you to get a new account with them by reapplying with them even though you discharged their debt in the bankruptcy.
18) Will everyone find out about my Filing?
Not unless you tell them or they go out of their way to check the public records. Bankruptcy filing are not normally published in newspapers, therefore the only people who usually find out that you are in a bankruptcy are creditors whose debts you have listed on the petition or who you apply for credit with.
19) Can I be fired for filing bankruptcy?
No, if your employer finds out about your bankruptcy,
it is against federal law to discriminate against someone for filing
20) What is the procedure after I file bankruptcy like?
In most cases, completing and filing your petition is the hardest part. If your bankruptcy petition does not raise any red flags for the trustee or your creditor(s), you're usually in good shape. Thirty to forty days after filing the petition, you are required to attend the "First Meeting of Creditors" or "Section 341(a) Examination."
At this meeting, creditors are given the opportunity to ask you questions. There is no judge for this hearing, just the Trustee in charge of your case. However, in most "no asset" cases, rarely do creditors show up for this hearing. Normally there is a room full of other filers and the questioning by the Trustee is very limited since they are usually pressed for time.
We prepare you for the most likely questions that the Trustee or creditors will ask you so that you go in to court better prepared for the questioning.
In most cases, the key to the success of your case lies in your bankruptcy petition. Normally, 3-4 months from the time the petition is filed, you are granted final discharge of your debts.
21) Can I run up my credit cards right before I file bankruptcy?
No, running up your credit cards on the eve of bankruptcy in anticipation of filing may cause your debt to be non-dischargeable on the grounds of fraud and you can be fined. You should get legal advice concerning large amounts of credit card debt incurred for "luxury goods" right before your bankruptcy.
22) Do I have to list all of my assets on my petition?
Yes. Knowingly and fraudulently concealing your assets from the bankruptcy court is a felony and the court has the power to fine you and deny you a discharge. Remember that most bankruptcy cases are considered "no asset" cases since state or federal exemptions protect all of their property.
23) Can I file bankruptcy without a lawyer.
Yes, no matter what state you are in, you have the right to file bankruptcy without a lawyer.
24) Should I feel ashamed to file bankruptcy?
There is a lot to think about before filing bankruptcy, however feeling ashamed should not be one of them. The history of bankruptcy in the United States dates back to the founding of our nation. The early English practice of debtor's prison was so abhorred by our founding fathers, they expressly outlawed it and instituted forgiving bankruptcy laws early on in our nation's history. Over the years, some of our nations' most revered companies and people have turned to the bankruptcy system for help. Perhaps this nations greatest president and founding father, Thomas Jefferson filed for bankruptcy not just once, but several times to eliminate the accumulation of his huge debt. Filing bankruptcy is better put into perspective when you know that a man of Mr. Jefferson's foresight and intelligence could repeatedly get himself into financial trouble.