is not an end, it is a new beginning. And for many individuals, it is THE
right to file for bankruptcy is a federal right, and all bankruptcy cases are
handled in federal court. Filing bankruptcy immediately stops all
can bankruptcy do for you?
will allow you to:
(1) Eliminate the legal obligation to pay most or all of your debts. This
is called a “discharge” of debts.
(2) Stop creditor harassment.
(3) Prevent foreclosure of your home.
(4) Prevent repossession of your car.
(5) Stop or prevent wage garnishments.
(6) Reduce or eliminate debt arising out of credit card debt, personal loans,
collections, or medical bills.
will bankruptcy NOT do?
will not eliminate certain rights of “secured” creditors. A “secured”
creditor has taken a mortgage or other lien on property as collateral for the
loan. Common examples are car loans and home mortgages. You can force
secured creditors to take payments over time in the bankruptcy process and
bankruptcy can eliminate your obligation to pay any additional money if your
property is taken. However, you cannot keep the collateral unless you
continue to pay the debt.
will not discharge types of debts singled out by the bankruptcy law for special
treatment, such as child support, alimony, certain other debts related to
divorce, most student loans, court restitution orders, criminal fines, certain
taxes, and debts incurred by fraud.
will not protect co-signers on your debts. The co-signer will still be
responsible for the loan.
will not discharge debts that arise after bankruptcy has been filed.
is the cost to file bankruptcy?
The filing fee for a Chapter 7 is $335 and $310 to file bankruptcy
under Chapter 13. The attorney
fees for each case vary on the complexity of each case. There is also a
cost for the two required bankruptcy courses that must be taken prior to the
are the required bankruptcy courses?
first course you must take is called a Credit Counseling Course. You must
receive a certificate from an approved credit counseling agency within 180 days
before your bankruptcy case is filed. You will be able to take your
classes on-line or over the phone. The agency will review possible options
available to you in credit counseling and assist you in reviewing your
will also need to take a second course, known as a Financial Management
Course. The certificate must be filed within 45 days after the filing
of your bankruptcy case.
Adiuvo Law Group, we will register you for your courses with an appropriate
agency. If the course certificates are not filed, your case will likely
property can I keep?
a Chapter 7 case, you can keep all property which the law says is “exempt” from
the claims of creditors. You can choose between your exemptions under your
state law or under federal law. In some cases, the federal exemptions are
a Chapter 13 case, you can keep all of your property if your plan meets the
requirements of the bankruptcy law. In most cases you will have to pay the
mortgages or liens as you would if you didn’t file bankruptcy.
if I receive a benefit after bankruptcy?
you receive an inheritance, a property settlement, or life insurance benefits
within 180 days after filing for bankruptcy, that money or property may have to
be paid to your creditors if the property or money is not exempt.
I have to go to court?
most bankruptcy cases, you only have to go your 341(a) Meeting of Creditors.
Occasionally, if issues arise, or if you choose to dispute a debt, you may have
to appear before a judge at a hearing. If you need to go to court, you
will receive notice of the court date and time from the court and/or from our
I repay some of my creditors and not others under the bankruptcy?
cannot selectively “prefer” some creditors and decide to pay them outside of
your bankruptcy proceedings. Creditors may also include family and friends you
may owe money to. All of your debts must be dealt with through the Court.
Any payments which you make to a creditor must be paid under the authority of
the Court, by the terms of the law, and not by any personal desires. If you
want to pay creditors, you must do so through a Chapter 13 plan.
I lose my property?
creditors have a “security interest” in your home, automobile or other
personal property, this means that you gave that creditor a mortgage on the
home or put your other property up as collateral for the debt. Bankruptcy
does not make these security interests go away. If you don’t make your
payments on that debt, the creditor may be able to take and sell the home or
the property, during or after the bankruptcy case. So as long as you
remain current on your payments, you will generally be able to keep the
collateral. For car loans, you are now required to reaffirm the
are several ways that you can keep collateral or mortgaged property after you
file bankruptcy. You can agree to keep making your payments on the debt
until it is paid in full or you may have to reaffirm the debt. At times,
you may be able to pay the creditor the value of the property instead of the
Adiuvo Law Group at (559) 439-2991 for your
FREE bankruptcy consultation!