What is bankruptcy?

The United State Bankruptcy Code allows an individual, corporation or partnership to obtain relief from certain debts under the law. Allowing debtor a fresh start from certain prior obligations.

Do I need to list all the stuff that I own?

You are required to list everything you own. Regardless of where the assets are located, even if the asset is wholly exempted.

Will I lose my stuff once I list it?

Short answer generally No. In Bankruptcy you have exemptions that can be used to protect your stuff/assets. There is always a chance that you may lose your stuff in a Chapter 7 because it is a liquidation type of Bankruptcy. Meaning that the Trustee can sell your non-protected stuff to pay your debts. In a Chapter 13 you will have to pay the Trustee in order to keep your non-protected stuff. It is critical that you speak with a qualified bankruptcy attorney in your area in order to protect your stuff.

Do I need to list all my creditors?

Yes, you are required to list all your creditors. Failure to include creditors may result in dismissal of your case or non-dischargeability of certain debts.

What are the different Chapters in Bankruptcy?

Chapter 7 is the liquidation bankruptcy, and your assets that are non-exempted are liquidated (sold) by the appointed trustee to pay your creditors.

Chapter 11 and 13 are both known as the reorganization bankruptcy. Businesses, unlike an may only file for a Chapter 11 reorganization. Chapter 11 is generally for an individuals who have too much debt to file a Chapter 13.

Chaper 13 is the debt repayment Chapter for individuals but also those who are sole proprietors can use this chapter. This is if one has regular income to fund the Plan and if your debt limits are less than $336,900 in unsecured debts and $1,010,650.00 insecured debts. Your Plan can only last 60 months.

Will bankruptcy stop my garnishments?

YES. Filing of the bankruptcy will usually stop the garnishment. Creditors have to obey the automatic stay impossed by a bankruptcy filing.

Exceptions. You can’t stop a child support obligations

Will bankruptcy affect my credit?

Yes bankruptcy will affect your credit. It is up to you to decide on how it will continue to affect your credit life. Initially it will lower your FICO score. However, when you debt is discharged your debt to income ratio may come back into alignment. If you use credit wise and make all payments on time your FICO will return.

"Credit" is not a sign of how good or bad a person you are. It is a measure of your riskiness to future lenders. Credit is not a measure of your value as a person. For lenders it is a business decision. It should be for you too.

Bankruptcy will remain on your credit report for up to ten years but if you act responsibly after filing bankruptcy your FICO score will rebound.

Is credit counseling required before I file bankruptcy?

Yes.

What is the means test?

The means test is the test that you must take in order to file bankruptcy. This will determine whether or not you qualify for a Chapter 7 or Chapter 13 Bankruptcy. The only time you do not have to use the means test is when your debts are 51% or more business debts or for a Chapter 9 or Chapter 12.

Regardless of you means test result you may qualify for a Chapter 7 or Chapter 13. There is nothing cut and dry about the means test. Click here to review the US Trustee information regarding means testing.