FAQs

Chapter 7, also known as straight liquidation, typically eliminates unsecured debts such as credit cards and medical bills, offering a fresh financial start. Chapter 13, often referred to as debt consolidation or the wage earners plan, is primarily designed to halt foreclosures and repossessions. It allows for the repayment of overdue amounts over a 36 to 60-month period. In Chapter 13, it's possible to consolidate various debts, including car payments, tax debts, student loans, and support arrears.

Qualification for Chapter 7 bankruptcy isn't determined by a specific debt amount. The primary requirement is having limited excess income after covering regular living expenses. If your monthly income significantly exceeds your expenses, excluding debts that would be eliminated in bankruptcy, you may be directed towards a Chapter 13 bankruptcy instead, as you might have the capacity to repay some of your debt.

Generally, if your assets fall within the legal exemptions, you should retain your property. These exemptions include up to $85,400 equity per person in your primary residence, up to $4,550 per person in vehicle equity, and up to $1,150 per person in personal property. Additional exemptions cover retirement accounts, social security income, and disability income. In some cases, you may be eligible for federal exemptions, which can be more comprehensive.

A discharge in Chapter 7 bankruptcy is an official order issued by the bankruptcy judge. This order declares that all eligible debts are discharged, effectively releasing you from those financial obligations. It's important to note that not all debts can be discharged, and we will discuss with you which debts fall into this category.

Immediately after bankruptcy, you may find credit available, but with high interest rates. However, most individuals are able to rebuild their credit within approximately two years, allowing them to secure credit with more favorable interest rates.

Eligibility for Chapter 13 bankruptcy primarily depends on having a consistent source of income. If you have regular income, you should generally qualify to file for Chapter 13 bankruptcy.

Yes, it is possible to file for bankruptcy individually, even if both names are on the mortgage and foreclosure proceedings have started. If only one spouse requires bankruptcy protection beyond the foreclosure issue, that spouse can file independently while the other remains outside the bankruptcy process.

The meeting of creditors is a scheduled event that occurs approximately 30 days after your bankruptcy filing. This meeting is conducted by a court-appointed trustee, typically a lawyer, rather than a judge. The trustee will ask you questions under oath about your assets and debts, usually lasting about five minutes. While creditors are permitted to attend and ask questions, their presence is uncommon.

The duration of a Chapter 13 bankruptcy reorganization plan ranges from a minimum of 36 months to a maximum of 60 months.

A Chapter 13 plan is a document prepared by your attorney that outlines the proposed method and amount for repaying your debts. The repayment amount is determined based on several factors including your assets, disposable income, secured debt, and any arrears owed.