The following information includes frequently asked bankruptcy questions. The answers stated are general in nature and are not intended to apply to every situation. Each case is different and carries its own set of circumstances which must be taken into consideration by competent legal counsel.
Will bankruptcy stop a lawsuit against me?
A bankruptcy filing will stop a lawsuit immediately and prevent your creditors from placing a lien against your house or garnishing your wages.
Will I lose my house, car and other personal property?
Not necessarily, each state has laws that determine which items or property are exempt from being taken away. For example, many states exempt personal items such as furniture and clothing. In addition, other kinds of property are exempt up to a limit. These exemption limits mean that any equity that you have in the property above the limit is not exempt. The Bankruptcy Court can take the property and sell it, pay off any creditors, give to you the exemption amount, and keep the rest for other creditors.
Can I file for bankruptcy every few years?
No. A debtor cannot obtain a discharge in a Chapter 7 case if the debtor obtained a discharge in (a) a Chapter 7 case filed within the past 8 years, or (b) a Chapter 13 case filed within the past 6 years. The time periods in either case are measured from the commencement dates of the respective cases. The dates of discharge have no bearing on the disqualification.
What should I do if I cannot make my Chapter 13 payments?
If the debtor cannot make a Chapter 13 payment on time according to the terms of the confirmed plan, the debtor should contact the trustee by phone and by letter advising the trustee of the problem and whether it is temporary or permanent. If it is a temporary problem and the payments can be made up, the debtor should advise the trustee of the time and manner in which the debtor will make up the payments. Significant changes in the debtor’s circumstances may require that the plan be formally modified. If the problem is permanent and the debtor is no longer able to make payments to the plan, the trustee will request that the case be dismissed or converted to another chapter. The determination of whether to modify, dismiss or convert a case requires the same kind of analysis as is needed for the initial decision whether to file bankruptcy and under what chapter. If the debtor delays making a voluntary decision and cannot make the plan payments, the court may dismiss the case.
What are exemptions?
11 U.S.C. §522(b) allows an individual debtor to exempt real, personal or intangible property from the property of the estate. State law protects exempt assets from distribution to your creditors. Typically, exempt assets include vehicles up to a certain dollar amount, the equity in your home up to a certain amount, and tools of the trade. Exemptions are claimed on Schedule C. As with all schedules, it is important to fully complete and provide all the information requested. If no one objects to the exemptions you have listed within the time frame specified by the bankruptcy court, these assets will not be a part of your bankruptcy estate and will not be used to pay creditors through your bankruptcy case. Deciding which assets are exempt and how and if you can protect these assets from your creditors can be one of the more important and difficult aspects of your bankruptcy case.
I’ve filed for bankruptcy, now what?
As soon as your case is officially filed with the court you are granted an automatic stay. Creditors are legally prevented from attempting to collect on any debt owed to them by you. This means that creditors must stop all collection activity, including telephone calls, harassing letters, repossessions, foreclosures, lawsuits and wage garnishments. Although the stay is automatic, creditors need to be advised of the stay. The court issues a notice to all creditors advising them of the filing of the bankruptcy. The creditors are informed of the following: the case number; the automatic stay; the date set for the creditor meeting; the deadlines for filing objections to the discharge of the debtor and the deadlines for filing objections to the discharge of specific debts. The exact information that is required in the notice differs depending on the chapter under which the case is filed.
What is an Objection to the Claim?
You are entitled to object to any claim filed in your bankruptcy case if you believe the debt is not owed or if you believe the claim misrepresents the amount or kind of debt (e.g. secured or priority), which you owe. In some circumstances, an objection to claim can be initiated by filing a motion in the bankruptcy court; in other circumstances it must be initiated by filing an adversary proceeding (like a lawsuit in your bankruptcy case).