BANKRUPTCY FREQUENTLY ASKED QUESTIONS
What is a Chapter 7 bankruptcy?
Under the federal bankruptcy statute, a discharge is a release of the debtor from personal liability for certain specified types of debts. This, in basic terms, means that the debtor (the person who filed the bankruptcy) is no longer required by law to pay any debts that are discharged. The discharge operates as a permanent order directed to the creditors of the debtor that they refrain from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, lawsuits and personal contacts. If you have further questions regarding Chapter 7 bankruptcy, contact a Melbourne bankruptcy attorney.
What is a Chapter 13 bankruptcy?
A Chapter 13 bankruptcy is also called a wage earner's plan. It allows individuals with regular income to develop a plan to repay all or part of their debts. Under Chapter 13, debtors propose a repayment plan to make installments to creditors over three to five years. If the debtor's current monthly income is less than the applicable state median, the plan will be for three years unless the court approves a longer period "for cause." If the debtor's current monthly income is greater than the applicable state median, the plan generally must be for five years. In no case may a plan provide for payments for longer than five years. If you have further questions regarding Chapter 13 bankruptcy, contact a Melbourne bankruptcy attorney.
If I file for bankruptcy, is my credit ruined forever?
No. If you otherwise keep your credit clean after the filing of bankruptcy, your credit can be largely rehabilitated in about three years after you receive the discharge of debts in bankruptcy. You must reestablish your credit, by paying bills on time, making car payments on time, when you do establish new credit cards, use them wisely and pay the statements in a timely manner. If you have further questions regarding bankruptcy, contact a Brevard County bankruptcy attorney.
If I file for bankruptcy does my husband or wife have to file bankruptcy, too?
No, although it is often wise for both husband and wife to file a bankruptcy together if both have significant joint debt. If they both owe on a credit card debt, and only one spouse files for bankruptcy, the credit card company will demand payment from the spouse not filing for bankruptcy. If you have further questions, contact a Melbourne bankruptcy attorney.
Do I have to take a credit counseling course prior to filing?
Yes, a credit counseling class must be completed prior to the filing of your bankruptcy case. Credit counseling classes can be attended in person, on the phone or on the internet. Once the credit counseling class has been completed, a certificate will be issued which must be filed in your bankruptcy case. Certificates of credit counseling go stale after six (6) months, so the class should be taken shortly before you plan to file. If you have further questions, contact a Brevard County bankruptcy attorney.
What information and/or documents will I need in order to file bankruptcy?
You should know all of your creditors, their addresses, account numbers and approximate amount owed; you need to provide your bankruptcy attorney with two (2) years of income taxes – three (3) years if you file a Chapter 13; you should also provide six (6) months proof of income; you should provide any information on lawsuits and liens; information regarding your home, vehicles, other real property, personal property. Speak with your bankruptcy attorney to determine any other documents to provide.
What happens after my bankruptcy is filed?
Once the bankruptcy case is filed an automatic stay goes into effect – this basically means that no creditor may move forward on collections efforts – without permission of the bankruptcy court. Approximately thirty (30) days after the filing of the case, a Meeting of Creditors (See “What is a Meeting of Creditors?” below.) is held. If you are in a Chapter 13, you also will attend the Meeting of Creditors and approximately forty-five (45) days after the filing you will make your first payment to the Chapter 13 Trustee. If you have further questions, contact a Melbourne bankruptcy attorney.
What is a Meeting of Creditors?
The first meeting of creditors, also commonly called a 341 as it falls under Section 341 of the Bankruptcy Code, is a process where the Trustee, who is a person appointed by the court to administer the bankruptcy estate. The Trustee asks the debtor a number of questions regarding his assets and liabilities and the petitions and schedules that were prepared in the case. The debtor is placed under oath and the meeting is tape recorded. If you have further questions, contact a Brevard County bankruptcy attorney.
If you have any further questions regarding bankruptcy, call attorney Gina Schlegel at Schlegel Law Offices, P.A. at (321) 872-6500 or fill in the following form and we will contact you: