Articles Posted in Bankruptcy FAQ

Bankruptcy FAQ – there are so many frequently asked questions about filing bankruptcy. Should I file? When should I file? What will it do to me? Will I lose everything? Can I keep my car? Can I keep my home? Will it stop a garnishment? Will it stop a foreclosure? If I’m married, do we both have to file? Will it affect my spouse? I’m behind on child support, can it help me with that? There are two main kinds of bankruptcy that an individual would choose from and they are Chapter 7 or Chapter 13. Both types have pros and cons. And both types definitely have a lot of false information spread out there about them. That’s where bankruptcy FAQ pulled together and in one place for someone to search through the answers helps so much to clarify fact from fiction. The laws in this area have changed over the years. The stigma of filing should not be there but because of the efforts of credit card companies and many other creditors spreading rumor and judgment, it sometimes still is there. Bankruptcy laws were created to protect you. To keep you and your family functioning during and thru hard times. Everyone experiences rough patches to no fault of their own. Death of a spouse, divorce, loss of a job, medical illness, accident, etc – so many things can impact our finances negatively that we had little to no control over. Bankruptcy allows you to regain control of things and get going back in a stable financial direction.

Can bankruptcy help me get my utilities turned back on?

Published on: June 13, 2013 | Frank Coxwell

Is your water or electric power turned off? Bankruptcy can help. As soon as you file bankruptcy the utility company must restore your service. If the company is threatening to shut off your water, power or gas, then the bankruptcy will stop the cutoff process. The bankruptcy can also wipe out the bills owed to the utility company so you won’t have to make the back payments.

There is one catch. If you want to continue to receive water, gas, or power in the future the city or company can make you put a deposit for future service. The size of the deposit is dependent on how much your average bills were, but is usually somewhere between $150 and $300. If you had a water leak and your past due bill is $1,000.00, then posting a new deposit of a couple of hundred dollars is a lot better than paying the old bill. You will get the deposit back when you move.

Public utilities, such as the electric, telephone, gas, and water cannot refuse you service or cut off their service just because you file for bankruptcy and owe them money. But 21 days after filing bankruptcy the company can terminate the service if you do not put up a deposit or provide other security to insure that the future utility bills will be paid.

Does A Criminal Record Stop Me From Filing Bankruptcy?

Published on: February 1, 2013 | Frank Coxwell

No. If you have been convicted of a crime you can still file bankruptcy. The bankruptcy papers don’t ask you questions like that. A criminal record would only be an issue if you were trying to file bankruptcy to get rid of fines or restitution. You can’t wipe out court fines and criminal restitution in bankruptcy. However, a chapter 13 bankruptcy would allow you to make your restitution payments over a 60 month period if you were having trouble making the payments ordered by the court that convicted you.

Can I Walk Away From My Rental Property?

Published on: January 31, 2013 | Frank Coxwell

Thinking about walking away from your rental property? You are not alone. Over 11 million people are upside down on the house they live in. The same conditions affect your investment property. To make things worse, when tenants can’t pay their rent, you must still come up with the monthly note. Being a landlord is hard work when times are good. Tenants who can’t pay or empty rental homes will jeopardize your own home and financial security. Filing bankruptcy allows you to give the property back to the mortgage company without having to pay for the property.

Can I File My Own Bankruptcy?

Published on: January 30, 2013 | Frank Coxwell

Of course you can. Just like you can set your own broken leg, deliver your own baby and rebuild the engine in your own car. You can do these things, but do you really want to? Do you have time? Do you have the proper tools, information and knowledge to get it done right?

Bankruptcy laws are complicated and full of traps. Mistakes and errors can cost you your property and your discharge. Misrepresentation and dishonesty can land you in jail. Let me tell you about preparing and filing a bankruptcy case.

Attorney’s all use software to prepare and print the 50 plus pages that make up a bankruptcy filing just like your tax guy uses a tax program and just like your doctor uses a program to keep up with your visits and medical records. Bankruptcy lawyers put your information into a program that prints the forms and files the papers with the court. This seems simple enough. But once the papers are filed the U.S. Trustee, the case trustee and the court clerks all start going over your papers to see how they can kick you out, deny your discharge or disqualify you from the benefits of bankruptcy. Do you know how to defend your position? Provide responses to any filed objections?

8 Things To Think About Before You File Bankruptcy

Published on: January 29, 2013 | Frank Coxwell

Here are some things to consider before you file bankruptcy so you don’t make a mistake that could get you in trouble or cost you a discharge.

1. Talk to a bankruptcy attorney sooner rather than later. Find out right now how bankruptcy can benefit you. Most people who file should have been in to see a bankruptcy lawyer six months to a year before they made the appointment. Instead they struggled and fought to survive, draining all their savings and retirement, doing everything they could to keep from getting information that could have led to their financial recovery and a new life.

2. Don’t use your credit cards. Some credit card charges may have to be paid if they are made right before you file.

How is the value of what I own determined in bankruptcy?

Published on: December 14, 2012 | Frank Coxwell

Bankruptcy Courts use “replacement value” when determining the value of your assets. Replacement value is defined in the Bankruptcy Code as the price that a retail merchant would charge for property of the same kind, considering the age and condition of the property at the time its value is determined.

This is not the cost to replace the item with a new one or what you could sell the item for; it is the cost that a retailer would sell the used item for in the condition it’s in now.

In cases such as used clothing, furniture, computers, TV, etc. it would be the value of the items if you had a yard sale or placed them on eBay.

If I file bankruptcy, will I lose everything?

Published on: December 13, 2012 | Frank Coxwell

No. Just because you are filing for bankruptcy, it does not mean you will automatically lose everything you own. You are entitled to claim “exemptions”, which are things that creditors cannot take from you. You must be honest with the Court and include a list of all your assets. To keep your assets, you must list them.

You can expect problems with your case and can lose your property if you do not list it or you are not completely honest about what you own. You must list everything you own, have in your possession, will own in the future, or might have an interest in now or in the future. For example, property you would inherit from a parent in the future, the $5 in your wallet, the car or house that is “owned by the bank”, and your baseball card collection. Everything means everything.

It includes things that you are making payments on (cars, real estate, furniture); things you own with someone else (including your spouse); things that have your name on the title or deed as the legal owner (even if you do not have possession of it); things that you are holding for someone else (college account for your child); things that you may not think have a lot of value (household goods and clothing); and claims you might have against someone else such as a claim for injuries in an auto accident.

How many times can you file bankruptcy?

Published on: November 29, 2012 | Frank Coxwell

Although there is not a limit on the number of bankruptcy cases you can file and no limit to the amount of time in between filings, there are limits to when you are eligible to receive a proper “discharge”. So why would you want to file a bankruptcy case if you know you cannot receive a discharge? There are several reasons why this strategy may be utilized. For example, say that you recently filed a chapter 7 bankruptcy and wiped out your unsecured debt but you have student loan or tax debt that is non-dischargeable. You could turn around and file a chapter 13 bankruptcy in order to be protected from garnishments, lawsuits, levies, etc relating to the student loans or tax debts for up to 5 yrs even though you would not receive a discharge.

Here are the time frames that must occur between filings for discharge eligibility (Note: the time is counted from date filed to date filed):

8 years between Chapter 7’s. -727(a)(8)

Does my spouse have to file bankrutpcy with me?

Published on: November 28, 2012 | Frank Coxwell

No. There may be reasons why it would benefit you both to file together, but the choice is yours individually to make. You cannot be forced to file with your spouse and likewise, you cannot force your spouse to file with you. When you file alone, you are filing “individually”. When you file together, you are filing “jointly”. Everyone’s situation is unique and depends on the type of debt you have and whether or not you both are responsible for the debt, etc. It is important to review the possibilities of filing individually vs jointly to see which way would benefit you both the most.

Do I have to report my spouse’s income if I’m filing alone?

Published on: November 28, 2012 | Frank Coxwell

If you are filing bankruptcy as an individual (not jointly with your spouse), yes, you must still report your spouse’s income. However, this in no way includes your spouse in the filing. The court simply looks at your total household income for calculating eligibility (Means Test) and for your post-bankruptcy household budget (schedule I and J). Even though your spouse is not filing with you, it is highly recommended that you both participate in the consultation so that both of you understand the process and requirements. And as mentioned before – have decided that the best strategy for addressing your financial situation is to file individually.

There is an exception to this though if you are married but separated. If you and your spouse are separated, your total household income is your income. If your spouse is paying domestic support, you will need to include that in your totals.