Who can file for bankruptcy?
With few exceptions, any person or business owing money to a creditor can file a bankruptcy petition.
How often can you file for bankruptcy?
In order to be eligible for a discharge, you must wait eight years between filing Chapter 7 bankruptcies. There is a four year limitation between filing a Chapter 7 and filing a Chapter 13 bankruptcy. There is a two year limitation between filing Chapter 13 bankruptcies.
Even if you fall between these time periods, you still may be able to file bankruptcy and get relief from your creditors.
What documents do I need to begin the process?
You need to compile a list of your current creditors, their addresses and, if possible, the associated account numbers. The petition in a bankruptcy filing includes schedules of assets and liabilities as well as a statement of financial affairs. These documents are filed with the bankruptcy court, along with payment of the filing fee. In order to complete these documents you will need to provide the following:
Six months of pay stubs and/or financial statements
Prior two to four years of tax returns
Any other lawsuits or litigation pending against you
You will also need to complete a Credit Counseling Course, which can be done over the telephone or online. Your attorney can provided you with the contact information for an authorized credit counseling agency.
How much debt do I need to file?
There is no minimum debt needed to file for bankruptcy. Some situations may not warrant filing for bankruptcy. During your consultation, we will be able to determine what other options may be available to you.
Chapter 13 does have a maximum debt ceiling. As of 2017, secured debts are limited to $1,184,200.00 and unsecured debts are limited to $394,725.00. If your secured or unsecured debts exceed this amount, we can discuss you other available alternatives.
What happens if only one spouse files?
It is not required for both spouses to file, however if a spouse is joint on any debt and does not join in the bankruptcy, they may be responsible for the debt.
Does a divorce protect me from creditors if my ex-spouse files?
No. If you are a co-signor with your ex-spouse on a debt, the creditor can require the entire payment of that debt from you even though the divorce decree assigns the debt to your ex-spouse. Your divorce decree may address any recourse you may have against your ex-spouse should he or she default on the loan obligations set out.
What types of debt cannot be discharged?
Generally, the following cannot be discharged:
Debts for taxes owed to local, state or federal agencies
Debts for money, property, services, or an extension, renewal, or refinancing of credit, which was obtained fraudulently
Debts which were neither listed nor scheduled or which the debtor waived discharge
Debts which are owed to a spouse, former spouse, or child of the debtor, for alimony, maintenance, or support of such spouse or child, in connection with a separation agreement, divorce decree or other order of a court of record
Debts owed for willful and malicious injury by the debtor to another person or property owned by another.
Debts for government-sponsored educational loans, unless it can be shown that repayment will cause an undue hardship
Debts for death or personal injury caused by the debtor's drunk driving or from driving while under the influence of drugs or other substances
Debts incurred after a bankruptcy was filed
What can I keep if I file bankruptcy?
Exemptions allow an individual to exempt, or keep, certain kinds of property. State law defines what assets are considered exempt. Your exemptions will be determined by which state you resided in during the two years prior to filing for bankruptcy.
How long does a bankruptcy stay on my record?
Bankruptcies can remain on credit reports anywhere from seven to ten years. Generally, the negative impact of a bankruptcy lasts about two to three years from the date of filing.
How are 2nd mortgages and lines of credit affected by bankruptcy?
If the value of your home has declined so that there is no longer any equity to secure a 2nd mortgage or home equity line, the lien can be stripped from the property within a Chapter 13 case. In this situation the lien becomes an unsecured debt that is then included in the unsecured creditor distribution of the Chapter 13 Plan.
Can I only include certain accounts in a bankruptcy filing?
All creditors must be listed and notified of a bankruptcy filing, even if you are current on your account (such as your mortgage or car payment). However, secured creditors are treated differently than your unsecured creditors. If you are current on your car payments and wish to keep that debt, you may be able to enter into a Reaffirmation Agreement with the creditor in a Chapter 7 case. A Reaffirmation Agreement means that you are still contractually liable for the debt and the lien holder can continue to report on your credit. As a general rule, however, all unsecured creditors must be included in your bankruptcy filing.