This Bankruptcy Q&A should give you the answer to some basic questions about bankruptcy. The best way to explore this section of the website is to start at the top of the bankruptcy menu and work your way down, reading this last.
What should I do when I cannot repay my debts?
The most important thing you can do is call a bankruptcy attorney. You may be able to keep some or all of your property even when you file for bankruptcy protection. Bankruptcy lawyers can help you plan in the best possible way for this. However, there are things you should not be doing, such as transferring property to family or friends, hiding property, or handling your credit cards incorrectly.
Do bankruptcy lawyers need to be near me?
It is a good idea to have a bankruptcy lawyer for a chapter 7 or for a chapter 13 that is near you. You will be providing documents and meeting in person with the attorney. You also may have questions about documents for the attorney. It is therefore wise to have an attorney around your area.
What is bankruptcy?
Bankruptcy is a federal law which allows for the discharge, or cancellation of, unsecured debts and stops collection procedures. It is designed to provide a fresh start for those that cannot pay their debts.
Can you help me via phone?
Our bankruptcy attorneys can help you decide, by phone, if filing bankruptcy is something you should be considering, and we can give you an estimate of our fee to assist you. However, preparing your actual bankruptcy petiton is a process that requires us to have face-to-face meetings with you. Please take advantage of our FREE 1/2 hour initial consultation. Call us locally at 231-582-0712 or (844) DOAKLAW (362-5529) to set up a free meeting.
Does my spouse have to file?
Maybe. If all the debts are in one spouse’s name, there may be no need for your spouse to file. However, sometimes there are circumstances and liabilities that need to be discharged for both of you. You should discuss this issue with your attorney.
Can I keep any credit cards?
There is a possibility of this in some limited circumstances. Keeping your credit cards would require you to agree to repay all of the debt on the card and would require the approval of the court.
Will my landlord and employer find out about the bankruptcy?
If the landlord or employer are creditors, you will need to tell the bankruptcy court about them. They will have to receive a notice that you filed. However, if the employer or landlord is not a creditor (usually that is the case) they do not receive notice.
How is a bankruptcy started?
You will meet with an attorney to get started. This first meeting is free. You will thereafter gather documents and provide information to your attorney so he or she can prepare the proper paperwork for court.
Will I have to go to court?
Yes. You have to attend one meeting called a First Meeting of Creditors. This meeting takes place in Traverse City (for the cases we handle) between you, and your attorney, and the bankruptcy trustee, and it is held about 4 to 6 weeks after your case is filed. Rarely do creditors appear at this meeting, but they are entitled to appear and to ask you some limited questions. At this meeting the trustee will have an opportunity to ask you questions about your assets, income, expenses, and other matters. Your attorney will be there with you and will prepare you in advance for this hearing, which generally lasts about 10 minutes.
What are the advantages of filing bankruptcy?
Your creditors have to leave you alone and cannot contact you at all to collect a debt. Once you receive your discharge, all of your unsecured debts are forgiven.
What are the disadvantages?
A bankruptcy stays on your credit report for a period of ten years. However, many people are able to obtain credit, even mortgages, within that ten year period.
You may not be able to keep all of your property, but as a general rule, you can. You need to speak to an attorney to make that determination.
What should I bring to our first meeting?
- Pay stubs for the last six months and evidence of any other sources of income you have had (such as from self-employment, unemployment, social security, pension, etc.) and your income tax returns from the past two years.
- Your most current statements from all bills you owe, including those you wish to pay, including student loans.
- A list of all your current bank accounts and any bank accounts you closed in the last year.
- A list of any property you sold in the past year including the date of the sale, to whom it was sold, and the amount received from the sale.
- The payoff on your home and any automobiles you are financing.
- A copy of the title to all vehicles and mobile homes.
- A copy of any lawsuits or judgments against you, either pending or closed, within the past year.
- A copy of any current wage garnishments.
- A copy of the mortgage to your home.
- A copy of the deed to your home.
- The declaration page of insurance on your house and car.
What if I received a Notice of Foreclosure?
Filing bankruptcy can delay the foreclosure if your case is filed before the sheriff’s sale. Attorneys who handle Chapter 13 cases may be able to prepare a Chapter 13 plan which will allow you time to bring the mortgage payments current, and stop the foreclosure.
What is the difference between Chapter 7 and Chapter 13?
A Chapter 7 case allows a person to cancel their unsecured debts. If you have a loan that is financing the purchase of secured property (like your car or your home), and if you want to keep that property, you must also keep that debt. If you decide not to keep your car or your home, you can give it back to the creditor and you will not be responsible for any of the remaining debt (called the deficiency). A Chapter 7 is commenced by filing a petition with the bankruptcy court in the district where you have lived for the past 180 days. The debtor discloses all of his or her assets and debts, and turns over non-exempt property to the trustee who liquidates it and pays the creditors (most people who file a Chapter 7 are able to exempt all of their property). The debtor receives a discharge of all dischargeable debts approximately 6 to 8 weeks after the First Meeting of Creditors.
A Chapter 13 case is a wage earner’s plan. In a Chapter 13 you must have a regular, steady source of income, and that income must exceed your monthly, budgeted expenses. You then send all of your surplus monthly income to the bankruptcy trustee each month (this is called your plan payment), and he or she uses that money to pay your creditors who have filed claims. Chapter 13 bankruptcy plans usually run between 36 months and 60 months. If your income fluctuates during the life of the plan (either up or down) your plan payment can be modified to address that situation. If your plan payments have not paid 100% of your unsecured debt after 60 months, the remaining balance of your unsecured debt is forgiven or discharged.
Our office no longer handles Chapter 13 cases, but we have found that the vast majority of people we speak to about bankruptcy qualify for filing a Chapter 7 case. Let us help you decide if a Chapter 7 case will work for you, and if not, we can refer you to someone who handles Chapter 13 cases.
Are all debts discharged?
Some debts are not discharged or forgiven. Some of these debts are:
- Debts you forget to list in your bankruptcy papers
- Child support and alimony
- Debts for personal injury or death caused by driving while intoxicated
- Most student loans
- Fines and penalties incurred for breaking the law, such as traffic tickets and criminal fines and restitution
- Most tax debts, although some tax debts can be cancelled and some can be paid under a Chapter 13 plan
- Debts incurred by fraud or misrepresentation
Is there some counseling involved?
Yes. Before we can file your bankruptcy you must complete a pre-filing counseling course. This can be completed on-line or by telephone, and takes less than one hour. Also, after your First Meeting of Creditors, and before you can receive your discharge, you must complete a debtor education counseling course. This can also be done on-line or by telephone, and takes longer than the pre-filing counseling. At our first meeting we will give you the name and contact information of an agency that can assist you with this counseling, and the charges for it are built into the bankruptcy fee you pay us.
What if my question is not answered here?
You can call the DOAK LAW FIRM, PC, at the numbers listed above, and ask to speak to an attorney.
We are a debt relief agency as defined by federal law, as are all bankruptcy lawyers. We help people file for bankruptcy relief under the Bankruptcy Code.
The information contained on this page is not to be construed as legal advice, and does not create a attorney-client relationship. Bankruptcy law is very complicated, and you should always consult an attorney before taking any action.