Who can file for bankruptcy?
Good people. People like you, typically – that have been affected negatively by the economy, loss of assets, medical illnesses, and gaps in employment. In order to prevent the cycle from repeating itself, it helps to find employment that can support your budget and you often need to make adjustments to your lifestyle to support a better financial future. Bankruptcy is an honest and reasonable practice aimed to give you a way to improve your quality of life when things are at their worst.
What debts are discharged?
Most of your debts will be discharged in the bankruptcy. As a general rule, the following debts are considered non-dischargeable:
- Back child support or back alimony
- Debts owed to the government, such as traffic citations or over payment of unemployment compensation
- Most student loans
- Debts involving fraud, embezzlement, larceny
- Debts incurred by driving under the influence causing personal injury or property damage
- Debts incurred by the purchase of luxury goods or services within the 90 days prior to filing
Will filing for bankruptcy hurt my credit?
The law states that a bankruptcy, either Chapter 7 or Chapter 13, can be listed on your credit report for up to 10 years. In either Chapter, a bankruptcy will negatively affect your credit. However, if you are considering bankruptcy, your credit is probably poor or about to become so, and your credit can begin to restore fairly quickly after filing. Many filers are able to buy a house within 2-3 years after filing for bankruptcy.
Will I lose my house? What about my car?
It depends. In a Chapter 7, you need to be current on your house or car payment at the time of filing, otherwise you will have to bring any arrears current in a timely fashion and you will of course have to continue to make regular payments. If you stop making payments, even if you are in bankruptcy, the secured creditor has the right to repossess or foreclose. Also, you need to keep in mind that in a Chapter 7, if you have excess equity in a house or car (equity above the allowed exemption amounts), then the Trustee could sell the property in order to use that excess equity to pay your creditors. One advantage of filing for Chapter 13 relief is that no property will be taken by the Trustee and you are able to bring any arrears current over an extended period.
I have filed for bankruptcy in the past. When can I file again?
If you previously filed a Chapter 7 and received a discharge, you need to wait four (4) years from the filing date to be able to file a Chapter 13, and eight (8) years to file another Chapter 7. If you previously filed a Chapter 13 and received a discharge, you need to wait six (6) years to be able to file a Chapter 7 and two (2) to file another Chapter 13.
Will I lose my tax refund?
It is likely that you will lose either your entire refund or a portion of your refund, depending on when you file your bankruptcy during the year. In a Chapter 7 bankruptcy, the Trustee is entitled to anything that has been earned but not yet received and spent prior to filing. For example, if you were to file your bankruptcy in the beginning of July, the Trustee would request about 50% of your tax refunds for the following tax year. In a Chapter 13 bankruptcy, you are able to keep at least $1,000 and up to $2,000.00 of your refund each year for three years, but must surrender anything over that amount to the Trustee to be applied to your current Chapter 13 Plan.
Can I file with or without my spouse?
Yes. You can file a joint case, which may be the best choice if there are joint debts. However, you can also file alone without harming your spouse’s credit.
Will bankruptcy affect my spouse?
If you file for bankruptcy without your spouse, your spouse’s income will need to be reported, but the bankruptcy will have no meaningful impact on your spouse. Your spouse’s credit will not be harmed, and your spouse will not be required to make any appearances, sign any documents, or otherwise be involved in the case.
What if I co-signed for someone else, or someone else co-signed for me?
If you co-signed on a debt for someone else, your liability on that debt will be wiped out by the bankruptcy. This means that the particular creditor can only collect from the signor, as long as the signor can continue to make payments. If someone else co-signed for you, that person will then become the only person from whom the creditor can collect. That means that if you have been making regular payments, and wish to wipe out the debt, the co-signer will then be the only one liable on the debt and will be responsible for the payments.
How long does it take to file?
It depends. There are a few things that you must do before your case can be filed. You must complete an online credit counseling course, complete a “Online Bankruptcy Interview”, as well as deliver to your attorney the requested documentation in preparation of your bankruptcy case. Then your attorney will prepare the filing papers and then contact you for your signatures. If the initial attorney’s fees and filing fee have been paid, then your case is ready to be filed.
How long does the whole bankruptcy process take?
It depends. It usually takes 4-6 months in a typical Chapter 7 to receive your discharge. However, the case may not officially close until many months later, depending on the circumstances of your case. In a Chapter 13, you must complete the entire plan which will last 3-5 years.
Can I get out of a lease?
Yes. You have the ability to either “assume” or “reject” any executory contracts or unexpired leases.
Do I have to go to court?
In a typical Chapter 7, you only have to attend the Meeting of Creditors with the trustee about 3-6 weeks after filing. The Trustee is not a judge, but you will be placed under oath to answer questions about the papers that were filed in your case. The creditors are invited but very few, if any, will attend. In a Chapter 13, you will also have to attend a Meeting of Creditors. If the plan cannot be approved or “confirmed” by consent, there is a small chance that you will have to appear with your attorney at a Bankruptcy Court Confirmation hearing.
Can I keep certain debts out of the bankruptcy?
All of your debts need to be listed in your filed paperwork. However, you can elect to “reaffirm” certain secured debts which means that you will keep the property securing the debt, and the debt will survive the bankruptcy.
I signed a document that said I wouldn’t file—does that mean I can’t file for bankruptcy?
No. There are many people out there that think that if you sign a document that says you won’t file for bankruptcy, then you lose that right. It doesn’t matter what you have signed. You can still file for bankruptcy.
We are a debt relief agency. We specialize in helping people file for bankruptcy relief under the Bankruptcy Code in an affordable manner.
UTAH BANKRUPTCY LAW CENTER, PLLC IS A DEBT RELIEF AGENCY HELPING INDIVIDUALS FILE FOR RELIEF UNDER THE BANKRUPTCY CODE.