Bankruptcy Options

If you are considering filing for bankruptcy, you may be wondering how to get the process started. You may also be hesitant because you don’t know the pros and cons of bankruptcy protection. As a result, you may have some pertinent questions that you would like answered before you can decide whether or not you’d like to go through with bankruptcy. The following questions and their respective answers can help you make an educated decision as to whether or not bankruptcy protection is right for you.

Q: What options are available to me if I choose to file for bankruptcy?

A: If you are going to file for bankruptcy, you will probably file under Chapter 7 or Chapter 13. Chapter 7 bankruptcy allows you to permanently discharge your debt in exchange for the sale of any non-except assets.

Chapter 13 bankruptcy allows you to enter into a payment arrangement with the creditors you owe, which is oftentimes less than you originally owed. In either case, you will receive the immediate benefit from the automatic stay. (More on that later)

If you happen to be a family farmer or a fisherman, you may file for Chapter 12, which will reorganize your debt while taking into account the seasonal aspects of the businesses in question.

Q: What immediate benefits will I receive for filing for bankruptcy?

A: When you file for bankruptcy, an automatic stay will go into effect immediately. This automatic stay will prohibit creditors from calling you, writing you, or from taking any action that remains outside of the bankruptcy proceeding with the purpose of collecting said debt. A bankruptcy filing will also suspect any legal actions, wage garnishments, repossessions or foreclosures that you may be facing due to the debt you owe.

Q: Can I keep any property after I file?

A: Most people can keep their property after filing bankruptcy.  Your IRA, 401(K), and pensions are 100% exempt from your creditors. You will be allowed to keep a certain amount of equity in your home, and also a motor vehicle.  Most of your personal property, including clothing, furniture, and tools are exempt up to a certain dollar value.  Call us today if you are concerned about losing your property.

Q: Will bankruptcy affect my chances for getting credit in the future?

A: While bankruptcy does have a negative impact on your credit, we have found that most people are able to quickly rebuild their credit. There are certain programs that you can participate in that will help you reestablish your credit. Many banks will offer you a secured credit card, and these are possibly the best way to rebuild your credit. Also, most lenders and credit card companies will be very interested in what you do after you have filed for bankruptcy protection. For some creditors, you are not a credit risk anymore because you do not have any other outstanding unsecured debt.

Q: Will anyone find out if I file?

A: Bankruptcy records are available to anyone who wants to look at them. They are public domain. However, most people are never going to find out that you filed for bankruptcy unless you tell them. Most likely, the people checking your credit report will be creditors, and you will have already told them about the bankruptcy by that point.

Q: How much will bankruptcy cost?

A: The filing fee for Chapter 7 bankruptcy is $306 and the filing fee for Chapter 13 is $281.  Additional attorney fees shall be discussed on a case by case basis as each individuals case is different.

Talk to a Qualified Bankruptcy Attorney

The attorneys at Walker and Turner, Ltd. are experienced bankruptcy practitioners who can answer all of your questions and help you get a fresh start. To set up your free consultation, contact our law office at (513) 232-5888.