Answers to Your Questions About Bankruptcy
When will bankruptcy provide me relief and protection from my creditors?
As soon as the bankruptcy petition is filed. When that happens, a case number is assigned to you, and we will provide you with that number. If a creditor calls, you should inform them of this case number and request that they stop contacting you. They will stop. If they do not, they are in violation of the automatic stay and are subject to sanctions by the Court.
What is the 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 your 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. That could be verbal notice on the phone from you. Additionally, your creditors will receive written notice from the bankruptcy court. That's one reason it is very important to inform us of every single creditor you have.
Can a creditor get around the automatic stay?
It is possible, if the debt is secured by collateral like your car. If you don't make the payment for your car, the bank can move to lift the stay and repossess your car.
What is a discharge?
A discharge is a court order granting you a fresh start. It relieves you from the obligation of paying all the unsecured debts listed in your Chapter 7 petition and schedules. Additionally, all unsecured debts remaining on your Chapter 13 petition and schedules are discharged at the completion of the plan. 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.
Will I lose my home and car?
You may keep them as long as you make your home and car payments on time, provided that the equity in your home and car are not greater than the exemption. However, if you fall behind in making the payments after your discharge, you may lose the property to the creditor.
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.
Will I lose my 401(K) or other retirement accounts?
More often than not, people are able to keep these accounts. The bankruptcy laws include exemptions and/or exclusions that protect ERISA qualified retirement accounts.
Can I include my utility bills in my bankruptcy case?
Yes, but you may have to pay a security deposit for any future payments. 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, because it is not considered a utility.
Will bankruptcy eliminate the unpaid child support or spousal maintenance?
No, this priority debt is not dischargeable.
Will filing bankruptcy allow for the reinstatement of my driver's license?
The answer is often yes. It could depend on why your license was suspended. If you were in an auto accident or 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.
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.
Will my employer find out about the bankruptcy?
If your wages are being garnished and you want that to stop, your employer must be notified. Otherwise, it is not necessary to inform your employer.
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 bankruptcy trustee. Creditors have the opportunity to appear at this meeting but rarely do.
When does the bankruptcy get removed from my credit report?
Bankruptcy stays on your credit report for up to 10 years.
Will I be able to get credit in the future?
Yes. Creditors will see you as a fairly minor credit risk, because they know you cannot file again for another eight 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.
Contact Us for Answers to More Questions
Do you have questions that are not answered by these bankruptcy FAQs? Every case is different, so it is important to discuss your situation with a Tucson lawyer before making a decision. Contact us to discuss your options with attorney Stephen Trezza.
