Chapter 7 Bankruptcy


Questions and Concerns

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What is bankruptcy and what does it do?

It is a legal process established to allow people to get out from under the crush of unpaid bills.  Through bankruptcy we can cancel most most or all of your credit card and personal loan debt and stop wage garnishments, creditor harassment, foreclosure of your home and repossession of property.

 

Do I have to go to court?

You have to go to a meeting with the examiner (trustee) appointed to your case.  The meeting is generally short; you will be asked questions about your case (please see section titled "The Bankruptcy Process").

 

Do I have to have lot of debt to file?

 NO.  Usually one creditor is either demanding payment or threatening  legal action.  Often the problem is that you can't pay this creditor and pay for other needed services.

 

If I'm married must my spouse file?

Usually both a husband and wife will file if they are both responsible for many of their bills.   However, often only one spouse files.  It depends on a variety of factors.

 

What happens to my mortgage or car loan?

You can keep your house and car and you make the monthly payments on time.  If you are behind in these payments we formulate a plan to satisfy these missed payments.

 

Will my bankruptcy be on my credit report?

Yes it will, but this will be a good thing.   It will tell creditors that all pre-existing debt has been discharged.  It will also tell creditors that you are doing something about your credit situation, instead of taking no action or making it get worse. In today's credit world, this is a good thing.  Please see the section on Credit. 

 

Can I obtain credit after I file bankruptcy?

If you handle yourself in a responsible financial manner after filing bankruptcy and you have a means of income, you should have no problem in obtaining needed credit.

 

Will I lose my property if I file bankruptcy?

NO.  If a situation is properly analyzed, it is rare for anyone to lose any property. 

 

Are secured debts, like mortgages and auto loans, dischargable?

It is possible to discharge second or third mortgages and change the terms of auto loans in a bankruptcy case.  It will depend on the circumstances of each case.   Of course, if you do not want to keep a home or automobile, we would be able to erase your liability on that obligation.