» Common Bankruptcy Questions

It depends. Our firm focuses on Chapter 7 and Chapter 13 bankruptcies. These chapters are commonly filed by individuals with primarily consumer debts. There are eligibility requirements for each kind of bankruptcy and there are many reasons why one chapter may be more appropriate for your situation than the other. Therefore, it is important to discuss your options with an attorney prior to filing. An attorney should be able to review your information, discuss your options, answer your questions, and quote you a price so that you can make an informed decision about what will be in your best interest.

It will vary depending on the requirements of the lender and things like your income, credit score, debts, and other non-bankruptcy factors. While we cannot guarantee that anyone will qualify for a mortgage, in our experience, debtors may qualify for a mortgage 2-4 years after a Chapter 7 has been filed (again, depending on lender requirements, income, credit score, etc.). Debtors may qualify for a mortgage during or after a Chapter 13 bankruptcy (again, depending on lender requirements, income, credit score, etc.).

If you are behind on your vehicle payments, then a Chapter 13 payment plan can catch up the payments and pay off the vehicle. If you are current on your vehicle payments, then you can usually reaffirm (keep) the debt and vehicle in Chapter 7 or propose that the vehicle be paid off through a Chapter 13 payment plan. If your vehicle is paid for, then you will be allowed to keep it in Chapter 7 depending on how much it is worth and will be allowed to keep it in Chapter 13 regardless of how much it is worth.

A Chapter 7 will stay on your credit report for 10 years. A Chapter 13 will stay on your credit report for 7 years. You are not prohibited from applying for or receiving credit during that time but rather it will impact the terms under which you can borrow (interest rates, down payments, payment terms, etc.). You may rebuild your credit during the 7-10 years and there are many free and useful websites and articles on how to responsibly improve your credit score.

A Chapter 7 bankruptcy is usually a fairly short and simple bankruptcy. However, there are both income and property limitations in Chapter 7 and therefore it is very important to consult with an attorney before filing.

A Chapter 13 bankruptcy is a payment plan in which you propose to pay some or all of your debts through a trustee. A requirement of Chapter 13 is that the debtor have regular income with which to make payments to a trustee. Chapter 13 bankruptcies are often filed when a debtor is ineligible for Chapter 7, can afford to pay some or all of their debts, or is trying to keep and pay for specific property (a home or vehicle for instance). Chapter 13 payment plans are usually for 3 to 5 years.

While you can file without an attorney, we strongly recommend that you consult with an attorney who is familiar with the bankruptcy process before you file. A successful bankruptcy filing requires an understanding of the law and rules, including dischargeability of different kinds of debt, eligibility to be a debtor and receive a discharge, exemptions, and income. An attorney who is familiar with the bankruptcy code and rules should be able to advise you on the cost, effect, and requirements of filing for bankruptcy so that you can make an informed decision on whether that is something you should do and, if so, how to go about it.

The first thing that happens is that an “automatic stay” goes into effect which prevents most collection attempts from continuing - this includes foreclosures, garnishments, lawsuits, and repossessions. Your creditors will be notified of the bankruptcy as well. The next thing that happens is that you will have to attend a “meeting of creditors.” What happens after that depends on what kind of bankruptcy is filed. In Chapter 7, you will typically receive a discharge about 60 days after your meeting of creditors unless someone objects to you receiving a discharge. In Chapter 13, you will have to get your payment proposal confirmed (accepted) and complete your payments to the trustee before you receive a discharge.