Bankruptcy FAQ's
Overview | Types of Bankruptcy | Prepare to file | After filing
Bankruptcy and Debts Overview
Do I need an attorney to file bankruptcy?
How much does it cost to file bankruptcy?
Will I lose my house, car, and other personal property?
Will filing bankruptcy effect my credit rating?
Bankruptcy is the legal method for a debtor to discharge or relieve debt. Bankruptcy is a way for people or a business who owe more money than they can pay to either work out a Plan to repay the money over time or to have their debt wiped out. While no debtor is guaranteed a total discharge, most debtors who file for bankruptcy are given such relief. One of the primary purposes of bankruptcy is to relieve the honest debtor from the weight of oppressive indebtedness and to provide the debtor with a fresh start. While the debtor is either working out a Plan or the trustee is gathering the available assets to sell, the Bankruptcy Code provides that creditors must stop all collection efforts against the debtor. The Bankruptcy Code regulates what Chapter you may/must file under, what bills can be eliminated, how long payments may be extended, what possessions you may keep, and all other details concerning the bankruptcy.
The Bankruptcy Code refers to Title 11 of the United States Code. (11 U.S.C. § 101 1330) Federal Law governs bankruptcy, but Georgia state laws govern what property you are allowed to exempt (keep) in a bankruptcy case.
Any person, partnership, corporation or business trust may file bankruptcy. In addition, charitable or social organizations may also file for bankruptcy. United States citizenship is not a requirement for filing bankruptcy, but you must have a Social Security number.
Do I need an attorney to file bankruptcy?
Federal law does not require you to have an attorney. You are allowed to file on your own without an attorney. However, without the assistance of an attorney, it is extremely difficult to do so successfully. Hiring a competent attorney is highly recommended.
How much does it cost to file Bankruptcy?
The Clerk of the Bankruptcy Court is required to charge a filing fee of $299 for each Chapter 7 case, and $274 for each Chapter 13 case. In addition, you are required to complete a mandatory credit counseling course before you can file any bankruptcy case. The providers of these courses decide how much to charge for their services, but most of them currently seem to charge around $30.00. Most of our clients elect to complete this course at PersonalFinanceEducation.com; however, you can click here to obtain a list of all approved providers of this course. Our attorney’s fees vary depending on which type of case you file, but we make every attempt to make this an affordable option for our clients. Payment Plans may be available in some circumstances.
If you are married, you may file a joint Petition with your spouse. A joint Petition is the filing of a single Petition by an individual and the individual`s spouse. In order to qualify for a joint Petition, you must be married on the date that the joint Petition is filed. Unmarried persons, corporations and partnerships must each file a separate case. If you are an individual and have a business, you may not file a single Petition for yourself and your business; each must be a separate bankruptcy case. Also note that because federal law does not yet recognize same-sex marriages, even those same-sex couples who legally married in one of the states/jurisdictions which allow that will not be able to file a joint Petition.
Will I lose my house, car, and other personal property?
Not necessarily. Georgia’s laws determine which items or property are exempt from being taken away. For example, in Georgia you’re allowed to exempt personal items such as furniture and clothing up to a maximum of $5,000 (or $10,000 for a married couple filing jointly). 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.
Does my divorce decree protect me if my ex spouse has filed for bankruptcy and she has listed me as a co signer on a Schedule D?
If you are contractually bound with your ex spouse on a debt, the creditor can require the entire payment of that debt from your share of the community property even though the divorce decree assigns the debt to your ex spouse. Depending on the terms of your divorce decree, you may be able to have certain support obligations under it determined to be non dischargeable by the Bankruptcy Court or in State Court. If you find out that your ex spouse has filed for bankruptcy, you should seek legal advice to find out your possible obligations.
Will filing bankruptcy effect my credit rating?
Yes. However, most individuals are able to rebuild their credit within a few years. If you are currently contemplating bankruptcy, then it is likely that your current credit rating has already been effected. A discharge of your current debt may provide the opportunity to rebuild your credit with steady, regular payments on a new account.
How long will a bankruptcy show on my credit reports?
The Bankruptcy Court has no jurisdiction over credit reporting agencies. The Fair Credit Reporting Act, 6 U.S.C. § 605, is the law that controls credit reporting agencies. The law states that credit reporting agencies may not report a bankruptcy case on a person`s credit report after ten years from the date the bankruptcy case is filed. Other bad credit information is removed after seven years. The larger credit reporting agencies belong to an organization called the Associated Credit Bureaus. The policy of the Associated Credit Bureaus is to remove Chapter 11 and Chapter 13 cases from the credit report after seven years to encourage debtors to file under these Chapters.
Can I file for bankruptcy every few years?
No. Once a discharge is granted, a debtor who filed under Chapter 7 is prohibited from filing for another Chapter 7 for 8 years. These time limits vary, though, depending on which Chapter you filed under previously. An attorney in our office will happily discuss these issues with you and advise you whether you are eligible to receive a discharge right now and, if so, under which Chapter you may proceed.
Overview | Types of Bankruptcy | Prepare to file | After filing