If you’ve gotten to the point where you are seriously thinking about declaring bankruptcy, times are probably tough. We want you to know that you do have options and that the team of Bankruptcy Lawyers at Anthem Bankruptcy Lawyers are here to help. Contact us today for a Free Consultation at (702) 857-6000.
Here are answers to some of the most frequently asked questions that we get about bankruptcy.
What is Bankruptcy?
Bankruptcy is a legal process that allows consumers and businesses a way to either discharge their debt or partially pay back their creditors and then start fresh. Bankruptcy provides you with legal protection as you go through this process. When you file for bankruptcy, your creditors and collection agencies must stop contacting you immediately.
What are the Different Types of Bankruptcy?
There are two different types of bankruptcy that are available to consumers, Chapter 7 and Chapter 13. Chapter 7 allows you to discharge most of your debts without payment. Chapter 13 involves repayment of some of your debts through a court-approved plan.
What is a Chapter 7 Bankruptcy?
A Chapter 7 bankruptcy is a liquidation of a debtor’s property to repay creditors and get rid of remaining debts. Debtors can only qualify for a Chapter 7 bankruptcy if they meet a “means test" based upon their income.
To learn more about Chapter 7 Bankruptcy, click here.
What is a Chapter 13 Bankruptcy?
A Chapter 13 bankruptcy is a reorganizing of debts. In a Chapter 13 bankruptcy, a debtor will propose a repayment plan that must be approved by the bankruptcy court. A Chapter 13 trustee will then administer that plan, by collecting payments from the debtor and distributing the money to the creditors. Chapter 13 bankruptcies are more complex than Chapter 7 bankruptcies and are uniquely tailored to each individual debtor.
To learn more about Chapter 13 Bankruptcy, click here.
How do I Qualify for Bankruptcy?
How you qualify for bankruptcy depends on your specific financial situation. Bankruptcy law uses a “means test" based on your income to determine whether you qualify for a Chapter 7 bankruptcy.
What Types of Debts Can Be Discharged Through Bankruptcy?
Filing a bankruptcy can discharge many types of debt, including:
- credit card debt
- personal loans
- medical bills
- car loans (if you give back the car)
- mortgages (if you give up the house)
- past-due utility payments
These are known as dischargeable debts.
What Types of Debts Cannot Be Discharged Through Bankruptcy?
Certain debts cannot be discharged through bankruptcy, including:
- past-due taxes
- student loans
- domestic support obligations
- car payments (if you keep the car)
- mortgage payments (if you keep the house)
These are known as nondischargeable debts.
Do I Have to Disclose All of My Property When I File for Bankruptcy?
Yes, United States Bankruptcy laws require that you fully disclose all of your assets when filing for bankruptcy. If you fail to disclose all of your assets, you may be found guilty of bankruptcy fraud, which is a crime under federal law. The FBI fraud division, the IRS, and the U.S. Trustee’s office all examine bankruptcy filings. Do not attempt to lie on your bankruptcy documents.
Are There Alternatives to Bankruptcy?
Yes, there are alternatives to bankruptcy, including working with a financial advisor or credit counseling agency and contacting your creditors and negotiating with them yourself. If you are unsure about whether bankruptcy is the best option for you, you should speak with an experienced bankruptcy attorney.
Will I Lose Everything?
You will not lose everything. Each state has a list of exemptions, or a list of property that you will be allowed to keep. Every state’s exemption list is different. For example, in Nevada, you are allowed to keep equity in real property or a mobile home up to $550,000. In neighboring California, the homestead exemption only covers between $75,000 and $175,000 in equity. This is why it is important to speak with an attorney who is familiar with the laws of your particular state.
What Happens at a Meeting of Creditors?
A “Section 341 Meeting of Creditors" will happen about 30 to 45 days after your bankruptcy case is filed. The debtor is required to attend with his or her attorney. At this meeting, the bankruptcy trustee will ask you questions. Your creditors may also attend and ask questions. You will be required to answer these questions under oath.
What is an Automatic Stay?
An automatic stay puts an immediate stop to any legal action or action by creditors and collection agencies. This stay is effective as soon as you file for bankruptcy. Once you file, your creditors must cease all communication with you, including phone calls, letters, emails, and text messages. If your creditors continue contacting you after they receive notice of your bankruptcy filing, they may face penalties and fines from the court.
When Will I Receive My Discharge?
When you receive your discharge depends on the type of bankruptcy that you file. In a Chapter 7 case, a court will usually grant a discharge about four months after the petition is filed with bankruptcy court. In a Chapter 13 case, the discharge is usually granted as soon as the debtor completes all of the payments under the payment plan. Typically this will take place about three to five years after the case is filed.
How Long Will a Bankruptcy be on my Credit Report?
A Chapter 7 bankruptcy will remain on your credit report for 10 years after the date that you file. A Chapter 13 bankruptcy will remain on your credit report for 7 years after the date that you file.
Is it Possible to Rebuild My Credit?
Yes. Filing for bankruptcy may cause your credit score to drop significantly; however, it is possible to repair your credit afterwards. To rebuild your credit, you should concentrate on improving your debt to income ratio and paying your bills on time. You should also monitor your credit report. If you notice any inaccuracies, notify the credit bureau immediately.
Can I File For Bankruptcy Again?
An individual is allowed to file bankruptcy multiple times—however, a certain amount of time must pass before each filing. If you previously received a Chapter 7 discharge, you are eligible for another Chapter 7 discharge eight years after the filing or a Chapter 13 discharge four years after the filing. If you previously received a Chapter 13 discharge, you may receive a Chapter 7 discharge six years after the filing or another Chapter 13 discharge two years after the filing.
In some cases, a debtor may choose to file for bankruptcy even if he or she is ineligible for discharge. For example, if their obligations may not be wiped out, a debtor might choose to file a Chapter 13 bankruptcy to get on a payment plan and ask the bankruptcy judge to keep the automatic stay in place, which prevents creditors and collection agencies from coming after you.
Experienced Las Vegas Bankruptcy Attorneys
Anthem Bankruptcy Lawyers is an award-winning team of experienced, dedicated bankruptcy lawyers and case managers. Our office is located in Henderson, but we serve clients all over the Las Vegas Valley. With over 25 years of experience, Anthem Bankruptcy Lawyers specializes in bankruptcy law. Contact us today at (702) 857-6000 to make an appointment for a free consultation.