1) When will this bankruptcy provide me some relief and protection from my creditors?
As soon as the Petition is filed. When that happens then a case number is assigned to you and we will provide you with that number. If a creditor calls then you should inform them of this case number and request that they stop contacting you and they will stop. If they continue to contact you then they are in violation of the Automatic Stay and are subject to sanctions by the Court.
2) What is an Automatic Stay?
The moment a bankruptcy Petition is filed an Automatic Stay goes into effect and all of your Creditors are subject to it. The Automatic Stay is like a time-out; it stops the action. It orders the Creditors to stop their debt collection efforts and to refrain from any new collection attempts. They must stop as soon as they receive notice of your bankruptcy Petition filing. If you inform them on the phone that is sufficient notice. Otherwise, your Creditors will receive written notice from the Bankruptcy Court itself based upon the information we put in your schedules. That's one reason it is very important to inform us of every single creditor you have.
3) Can a creditor get around the Automatic Stay?
Sometimes the answer is yes. This is one of many reasons you must be candid, and completely straightforward with Mr. Trezza. He will work with you to avoid creating a situation where a creditor can get around the Automatic Stay.
4) What is a Discharge?
A Discharge is a Court Order granting you a "Fresh Start". In effect, it relieves you from the obligation of paying all the debts listed in your Chapter 7 Petition and Schedules. Remember, if it is not listed in your Schedules, then it is not discharged so please be thorough and complete when reporting your debts to us.
5) Will I lose my home and car?
You may keep them as long as you make your home and car payments on time and provided that the equity in your home and car are not greater than the exemption. The act of reaffirming the debt will allow you to keep your home and car. However, if you should fall behind in making the payments after your discharge then you may lose the property to the creditor and, if the collateral is an automobile, they may attempt to collect any deficiency judgment.
6) What does "reaffirm a debt" mean?
Reaffirming a debt means that you agree to be liable for a debt that could be discharged in your bankruptcy case. You may sign a reaffirmation agreement and the agreement will be filed with the Bankruptcy Clerk. If you break the agreement in the future you will still be responsible for the outstanding debt.
7) Will I lose my 401(K) or other retirement accounts?
More often than not, no. The bankruptcy laws include exemptions that protect ERISA qualified retirement accounts.
8) Can I include my utility bills in my bankruptcy case?
Yes, but you may have to pay a security deposit for any future payments. Usually utility companies require one and one-half times a normal month. All utility bills prior to filing bankruptcy will be eliminated however; you will have to pay all utility bills from the date of filing forward. Cable television is an exception to this rule since it is not considered a utility.
9) Will filing a bankruptcy Petition and obtaining a Discharge allow for the reinstatement of my driver's license?
Many times the answer is Yes. It could depend on why your license was suspended. If you were in an auto accident and were suspended for driving without insurance then the bankruptcy may permit the reinstatement of your driver's license provided that any other requirement of the DMV is also satisfied. If you were intoxicated and were in an auto accident that caused bodily harm then the debt is not dischargeable.
10) Will bankruptcy eliminate the unpaid child support or spousal maintenance that I owe?
No, child support and spousal maintenance arrearages are not dischargeable.
11) When does the bankruptcy filing get removed from my credit report?
Evidence of the bankruptcy filing stays on your report for 10 years. It is very difficult to remove a bankruptcy prior to 10 years if the information is accurate and verified by the Bankruptcy Clerk.
12) Will I be able to get credit in the future?
Yes, you will. Creditors will see you as a fairly decent credit risk because they know that you can't file again for another 8 years. After three years you may be able to get a mortgage for a fairly low rate. Most auto lenders like to wait until you have received your discharge before they will give you a car loan.
13) Will the bankruptcy appear on my spouse's credit report?
Since Arizona is a community property state and either party may legally bind the community by naming a debt it is very possible that the bankruptcy filing will appear on your spouse's credit even if you file an individual bankruptcy Petition while you are married.
14) Will a creditor try to collect the debt from the Co-Debtor, if I file for bankruptcy?
It is possible and completely up to the creditor. The creditor has a legal right to do so but may choose not to if they determine that collecting the debt is not possible.
15) Will my employer find out about the bankruptcy?
If your wages are being garnished and you want that to stop then your employer must be notified. Otherwise, it is not necessary to inform your employer.
16) Do I have to appear in Court?
Normally, no. However, you do need to appear at a 341 Meeting of Creditors. At this meeting you will answer questions under oath from the Chapter 7 trustee. Creditors have the opportunity to appear at this meeting but rarely do.
