- What is bankruptcy?
- What happens if I file a chapter 7 bankruptcy?
- Who can file a chapter 7 bankruptcy petition?
- Who can file a chapter 13 bankruptcy petition?
- Will the bankruptcy stop creditors from calling?
- How long after filing will the creditors stop calling?
- Who notifies the creditors?
- Who deals with my creditors during the bankruptcy?
- Will my employer or landlord find out about my bankruptcy?
- Can my employer fire me for filing bankruptcy?
- Can I go to jail if I file bankruptcy or don't pay my debts?
- Does the spouse of a married person also have to file bankruptcy?
- Can I keep any credit cards?
- Are there alternatives to bankruptcy?
- Can I file bankruptcy to delay a creditor?
Bankruptcy refers to the federal law that permits certain entities to obtain permanent relief from many debts and obligations. The intent of the bankruptcy law is to enable debtors to get a "fresh start" in their financial affairs. The bankruptcy law underwent a major revision in 2005. Once a bankruptcy has been concluded, the debtor is discharged from many debts, meaning the debtor is no longer legally obligated to pay those dischargeable debts.
A Chapter 7 bankruptcy proceeding is commenced by filing a petition with the bankruptcy court. The person filing a Chapter 7 is referred to as the "debtor." The debtor is required to disclose to the court all of its property and debts and turn over all nonexempt property to the bankruptcy trustee, who then converts it to cash for distribution to the creditors. The debtor then receives a discharge of all dischargeable debts.
Almost any individual, partnership, or corporation may file a chapter 7 bankruptcy petition if he or she resides, has a domicile, a place of business, or property in the United States. If you filed a prior bankruptcy petition and the prior proceeding was dismissed within the last 180 days, you may not be able to file a second petition.
Individuals may file chapter 13 bankruptcy petitions if they:
(1) reside, have a domicile, a place of business, or property in the United States;
(2) have a source of regular income; and
(3) on the date the petition is filed owe less than $290,525 in non-contingent, liquidated, unsecured debts and less than $871,550 in non-contingent, liquidated, secured debts.
Corporations and partnerships may not file a chapter 13 bankruptcy petition. If you filed a prior bankruptcy petition and the prior proceeding was dismissed within the last 180 days, you may not be able to file a second petition.Back to contents
Yes. The automatic stay prevents creditors from taking any action to collect debts.
Once a creditor becomes aware of a filing for bankruptcy protection, it must immediately stop all collection efforts. After you file the bankruptcy petition, the court mails a notice to all the creditors listed in your bankruptcy schedules. This usually takes a couple of weeks. Creditors will also stop calling if you inform them that you filed the bankruptcy petition, and supply them with your case number. In urgent cases, we will contact the creditor immediately upon filing the bankruptcy petition, especially if a lawsuit is pending. If a creditor continues to use collection tactics once informed of the bankruptcy it may be liable for court sanctions and attorney fees for this conduct.
After the bankruptcy petition is filed, the court mails a notice to all the creditors listed in the schedules. This usually takes a couple of weeks.
We will deal with your creditors once we undertake your representation and form a confidential attorney-client relationship.
Bankruptcy petitions are public records. However, under normal circumstances, unless your employer or landlord is a creditor, it will not know you filed a bankruptcy petition. If your employer or landlord is a creditor it must be listed as a creditor on the schedules and will receive notice of the bankruptcy proceeding.
No. The law prohibits government units and private employers from discriminating against you because you filed a bankruptcy petition or because you failed to pay a dischargeable debt.
No. There are no debtor's prisons in the United States.
No. In some cases where only one spouse has debts, or one spouse has debts that are not dischargeable, it might be advisable to have only one spouse file.
Under some circumstances you may be able to keep some credit cards if the creditor agrees. There are many factors which must be considered, including the credit card balance at the time of the bankruptcy, what terms the credit card company is willing to accept and your ability to pay the present and future credit card debt. Frankly, it is usually not advisable to keep credit that would otherwise be discharged.
Yes. Sometimes payment plans can be negotiated with creditors. Obtaining loan extensions, compromises and workout agreements require negotiation skills and experience. These alternatives may alert your creditors to the existence of nonexempt property that the creditor could reach and can involve considerable expense. You also have the option of doing nothing. In any event you should seek professional advice in dealing with most of these alternatives.
The Rules of Bankruptcy Procedure require you or your attorney to certify that your petition is not filed "for any improper purpose, such as to harass or to cause unnecessary delay." Bankruptcy is intended as a tool for dealing with debts that can not otherwise be paid. You should not file a bankruptcy petition for the sole reason of delaying a creditor's actions.
Call (619) 702-5015 to speak to a knowledgeable attorney if you have any questions regarding this information.