Bankruptcy Questions & Answers

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Bankruptcy FAQ

Will bankruptcy wipe out taxes I owe?

There are some kinds of taxes that can be wiped out in bankruptcy, but it would be far too complicated to attempt to explain that here. After we know the facts about any taxes you owe, we will be happy to tell you what impact bankruptcy will have on them and which form of bankruptcy would be the best to file because of your taxes.

How do I know that I live in a part of Ohio where you can represent me?

Click on "Counties We Serve" on this website. If you live in one of those counties, we can represent you. Or call us and we can tell you in seconds. Chances are very good that we can represent you because we represent residents all over Northeast Ohio.

How can bankruptcy help me?

Bankruptcy is a very powerful remedy and can help you immensely. It releases you from most or all of your debt, which alone is a major benefit. It enables you to keep your home or motor vehicle although you may be behind on the payments for them. It stops all harassment from your creditors, thus relieving you from that stress. It prevents garnishments, repossessions, and the putting of liens on your property. It stops your utilities from being turned off or can force them to be put back on. And it enables you to get a fresh start to re-establish your credit and improve it from what it was before you file.

If I file bankruptcy will I have to wait 7 to 10 years (or some other long period) to get credit again?

Absolutely not. That is a common bankruptcy myth. Most people find that their credit rating starts going up as soon as they complete their bankruptcy. Many buy new houses in two years or less after their bankruptcy. We can answer any questions you have about this. Just give us a call.

If my wages are already being garnished, is it too late to file bankruptcy to do something about that?

It is definitely not too late. Within minutes of filing your bankruptcy, we can stop a garnishment.

Can I get rid of my student loans in bankruptcy?

As indicated above, student loans are not dischargeable, unless repayment would impose an undue hardship on the debtor or his or her dependents. This hardship is usually very difficult to prove. There is one form of bankruptcy that may help you to manage your student loan payments in an easier way. You can discuss that with us.

What is the difference between a person being denied an entire discharge and being denied a discharge only on a particular debt that is nondischargeable?

An entire denial of a discharge completely blocks the debtor from being released from all debts. In other words, despite having filed bankruptcy the debtor still owes all his or her debts. On the other hand, if a particular debt is not dischargeable, the debtor is obligated to pay that particular debt, but is released from the remaining dischargeable debts.

When will I get my discharge?

Generally a chapter 7 bankruptcy discharge is received approximately four months after the case is filed. In chapter 13, your discharge will be received once you have completed the payments under the chapter 13 plan, which will be approximately thirty-six to sixty months after the case is filed. You will know the time more precisely when you talk to us about your case. Remember even if your bankruptcy takes 36 or 60 months, in the meantime, during your bankruptcy, your creditors are legally blocked from trying to collect from you.

What is a joint petition?

A joint petition is the filing of a single bankruptcy petition by a married couple. Only people who are married on the date of filing may file a joint petition.

Can an unmarried couple who live together and share income and expenses file a joint bankruptcy?

No. Only a married couple can file a joint bankruptcy. An unmarried couple must file separate bankruptcies if they each need to file bankruptcy.

Do both spouses have to file bankruptcy together or can one file alone?

There is no requirement that both spouses file bankruptcy together under chapter 7 or chapter 13. One can file alone. However, often it is better for both of them to file. See "Should both spouses filed bankruptcy." We can advise you as to what would be best for you.

Should both spouses file bankruptcy?

Most of the time both spouses file jointly (there is only one filing fee) because it is the better thing for them to do. The main reason that both spouses file together is that they have joint debts and/or they each have debts. If only one spouse files bankruptcy, the other spouse remains liable for his/her individual debts and the entire balances of the joint debts (not just one-half) and the creditors can continue to pursue the non-filing spouse to pay those joint debts despite the filing of the bankruptcy by the other spouse

In a chapter 13 bankruptcy the nonfiling spouse is protected during the bankruptcy from being pursued by the creditors of some joint debts. However, when the bankruptcy is over and if the joint debt was not paid in full through the chapter 13 plan, the creditor may look to the nonfiling spouse for payment of the unpaid balance.

On occasion, however, it is wise for only one spouse to file. This may be because the non-filing spouse owns valuable property that would be lost in a bankruptcy or owes very little or no debt or because the spouses will not qualify for a particular chapter of bankruptcy if both file. This can be complicated but can be clearly explained to you by our attorneys.

If my former spouse was ordered in our divorce to pay certain joint debts that we have and he or she files bankruptcy, will I be safe from having to pay these debts?

In general, no. Sometimes you can obtain relief against your former spouse in the divorce court. This is something you should discuss with your domestic relations attorney and/or bankruptcy attorney before drawing up your divorce papers. Most of the time, however, you will have to file bankruptcy too so as to be released from having to pay the joint debts.

How do I know if I should file a bankruptcy?

The best way is to consult one of our lawyers about this. Do not delay consulting with us. If you think bankruptcy may help you, you should talk to us about it right away. Some people wait too long and lose property or income unnecessarily because they put off talking to us. Certainly, if any or all of the following apply to you, it is likely that you need to file:

  • You have been the victim of a repossession.
  • You house is nearing or is in foreclosure.
  • You are getting along by making payments only to the creditors that are pressuring you.
  • You are getting along by making only the minimum payments allowed on your credit cards.
  • You are being harassed because of nonpayment of one or more bills.
  • You have refinanced your home just to pay other creditors.
  • You are relying on credit cards to pay for everyday necessities like food.
  • Your utilities have been shut off or are in danger of being shut off for nonpayment.
  • You are barely getting along financially and it is causing you great stress and perhaps interfering with your ability to sleep, to work, or to get along with others.

I am managing to keep up with my debts but am experiencing great stress in doing so. Should I consider bankruptcy?

Absolutely. Bankruptcy releases you from stress that can be ruining your life or even causing medical harm. Talk to us as soon as possible and we can help you decide whether to file.

Should I try non bankruptcy alternatives such as debt consolidation?

There is almost never a better non bankruptcy solution than bankruptcy. A non bankruptcy solution nearly always costs far more, takes longer, does not protect you from your creditors, requires your creditors consent, and does not improve your credit. We can easily explain this to you in detail. We are sure that, once you know the facts, you will see how superior bankruptcy almost always is to non bankruptcy alternatives.

Do I have to take counseling courses to file bankruptcy?

Yes, you have to take two: one before you file and one after you file. If you do not do this, your bankruptcy discharge will be denied and you will continue to owe your debts. We can give you more information about the cost and the companies that provide these courses which can be done by phone or over the internet. We have collected the names of companies which charge the lowest fees and offer the best service.

Will a bankruptcy ruin my credit?

By the time you consider filing, your credit may already be in bad shape. Bankruptcy will actually enable you to rebuild your credit and give you a fresh start. Most people find that bankruptcy improves their credit as soon as it is completed.

Will everyone know I filed bankruptcy?

The filing is not reported in most papers except those that publish legal notices. If it is reported in such a newspaper, it may be possible to find that information by searching on the internet. But someone would have to be searching specifically for you. So, unless you tell someone, it is very unlikely they will know.

Will I lose any of my property if I file?

Most people who file bankruptcy do not lose any property or only a small amount. You can discuss that with us to find out what the effect on you will be and what steps can be taken to protect your property, if necessary.

I am behind on my car payments. Will I lose the car if I file?

You usually can file a chapter 13 bankruptcy to save the car and allow you to get current on the payments. If you file a chapter 7 bankruptcy when you are behind on the car payments, you are likely to lose the car through repossession.

I am behind on my house payments. Can I save my house with bankruptcy?

You usually can save your house if you file a chapter 13 bankruptcy which will stop the foreclosure and give you time to catch up on your payments. We can explain this in more detail if you consult with us about this.

Can medical bills be included in my bankruptcy?

Yes, medical debts are one of the most common types of debts that are discharged in bankruptcy.

Will bankruptcy remove a lien?

In many cases, it is possible to remove or reduce a lien in bankruptcy. That is something you should discuss with us so that we determine whether that is possible.

Will bankruptcy stop a judgment?

Bankruptcy will stop most judgments from being enforced. It will prevent the judgment from resulting in a garnishment of your wages or bank account and from putting a lien on your property. If a judgment lien has been put on your property before you file bankruptcy, it may still be possible to remove the lien through the bankruptcy.

What is a "redemption"?

It is a process that may be possible for a chapter 7 to do in which the debtor takes out a new loan usually on a motor vehicle and pays off the old loan in an amount equal to the value of the vehicle, NOT the balance on the loan. Sometimes a great deal of money can be saved in this manner. We will tell you if a redemption may be possible for you and we will help you get it done if it is possible.

What is a "reaffirmation"?

A reaffirmation is a process by which the person filing bankruptcy signs papers agreeing to pay a debt as if they had never filed bankruptcy. This is done often to allow them to keep a motor vehicle. We will give you complete advice on reaffirmation and whether you would benefit by it.

What happens to my motor vehicle in bankruptcy?

In chapter 7, some people keep their vehicles and continue making the same payments. Others allow repossession and bankruptcy wipes out the debt. Others qualify for redemption, which allows them to refinance the loan at a lower balance than what is owed and keep the vehicle. In chapter 13, some people keep the vehicle and make the same payments. Others reduce the interest rate and spread the payments over a longer period. Still others surrender the vehicle and pay little or nothing on the balance. We can explain this in more detail if you call us for a consultation.

Will filing bankruptcy stop wage garnishments?

Yes. In fact, bankruptcy is often the only way to stop a wage garnishment without paying the debt that resulted in the garnishment.

Can I pay a debt even though I was released from it in my bankruptcy?

Yes, in fact this is common. People often pay debts to keep motor vehicles or homes or because they want to maintain a good financial relationship with the creditor such as a family doctor.

Will filing bankruptcy stop a foreclosure on real estate?

Yes. A bankruptcy will stop a foreclosure on a real estate most of the time if the proper type of bankruptcy is filed. Please feel free to discuss this with us.

Will I lose my retirement funds if I file bankruptcy?

Very unlikely. Nearly all types of retirement funds are exempted in bankruptcy.

Can filing bankruptcy stop my utilities from being shut off?

Yes. Bankruptcy will stop your utilities from being shut off.

Can I have my utilities turned back on after filing for bankruptcy?

Yes, after you pay a deposit to the utility company.

Do I have to list all my debts on my bankruptcy papers?

Yes, but that does not mean you cannot pay any of them. As explained elsewhere, you can pay any debt that is listed if you wish. In fact, some debts, such as student loans, must be paid.

What happens if I discover a debt I forgot to list on my bankruptcy?

You can add that debt to your bankruptcy if there is still time to do so. However, if you forgot to include a debt and your bankruptcy case has been closed, the creditor cannot try to collect the debt from you if none of your other creditors were paid anything from your bankruptcy.

What happens to co-signers on my debts if I file?

It is important to know that bankruptcy does not release from a debt a person who has co-signed on it with the person who is filing bankruptcy, if the co-signer does not file too. Sometimes there are ways to deal with this problem that will protect the co-signer. We will be happy to discuss this with you.

How do my creditors find out I have filed bankruptcy?

The Bankruptcy Court will send notices to them if you listed them with their address in your bankruptcy papers.

I filed bankruptcy before. Can I file again?

Generally, you can file a chapter 7 bankruptcy and receive a discharge if you file it at least eight years after filing a prior chapter 7 in which you received a discharge and your can file a chapter 7 bankruptcy and receive a discharge if you file it four years after filing a prior chapter 13 in which you received a discharge. You can file a chapter 13 and receive a discharge if you file it four years after filing a prior chapter 7 and receiving a discharge. You can file a chapter 13 two years after filing a prior chapter 13 and receiving a discharge and still receive a discharge in your new chapter 13.

Will I have to go to court if I file?

You only need to go to one meeting of creditors. This may be held at the courthouse or some other location. But you will not have to go in front of a judge at this meeting. Instead you will meet with a trustee. We can explain this to you in more detail at a consultation.

What is a bankruptcy trustee?

The bankruptcy trustee in a chapter 7 is responsible for being sure you have filed correct paperwork and for selling any assets that you may have which are not exempt. The latter only rarely occurs. The chapter 13 trustee is responsible for administering your plan and making sure it follows the bankruptcy law.

Will my employer find out if I file?

Yes if your employer pays to find out or if your wages are deducted for a chapter 13 payment. In most cases, this does not happen.

How much debt do I have to owe to file?

There is no specific amount, but of course it is possible to owe so little debt that it will not be advisable to file. You can discuss this with us simply by calling.

Can my income be too high to file bankruptcy?

This is very unlikely. If your income is too high for a chapter 7, then you can almost always file a chapter 13 and still receive a discharge.

How much does it cost to file bankruptcy?

If we could tell you here we would but we do not charge the same fee to everyone because that would be unfair. Some people have simple cases and some people have very complicated cases. However, after you talk to us we will be happy to quote you our fee. We offer some special arrangements. You may be surprised how little the total fee is or how little you have to pay in advance. So call us about this.

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