Questions People Ask Us About Bankruptcy
At Law Offices of Shawna Melton, our attorneys and staff make every effort to keep clients informed and well-prepared for bankruptcy. Below are some common questions that we hear from prospective and existing clients.
What is bankruptcy?
Bankruptcy is a legal process where the law permits you to eliminate certain debts or repay them over time. There are different types of bankruptcy, depending on your financial circumstances. For example, a Chapter 7 bankruptcy authorizes discharge of certain debts that you owe. In exchange for this discharge, the bankruptcy trustee may take any non-exempt property that you own and distribute those proceeds to your creditors. A Chapter 13 bankruptcy enables individuals to reorganize and repay debts over time with a repayment plan. How much you will pay and for how long will depend on your individual circumstances including how much you make, and the amount and type of debt you have.
What kind of debts are dischargeable?
The answer can be complicated which is why you should contact an attorney to discuss your particular situation. However, in general unsecured debts, such as credit card balances and medical bills and personal loans are examples of dischargeable debts. Other debts such as child support, alimony and student loans generally cannot be discharged in bankruptcy.
What is the typical timeline for a Chapter 7 or Chapter 13 bankruptcy?
A Chapter 7 typically takes about six months to be completed. Once a debtor has inventoried their debts and filed for bankruptcy, the automatic stay kicks in, and creditors cannot attempt to collect on any debts included in the bankruptcy. Within a few weeks, the court will send a notification about the creditors’ meeting in the presence of a bankruptcy trustee. After that meeting, the bankruptcy discharge may be issued in a couple of months.
In a Chapter 13 bankruptcy, the affordable repayment plan lasts three to five years. Upon completion, remaining unsecured debts can be discharged.
Do I qualify for Chapter 7 Bankruptcy?
In order to qualify for chapter 7 bankruptcy, filers have to satisfy the means test. The means test looks at your income as compared to the median income (adjusted by household size and location) to determine if you qualify for Chapter 7 bankruptcy. Even if you do not satisfy the means test, a Chapter 13 bankruptcy might be a better fit for you.
What will I lose if I file for bankruptcy?
You may not lose anything but debts. In theory, the bankruptcy trustee could ask you to liquidate certain assets to pay creditors, but in practice, many people do not have to give up their homes or personal property when they file for bankruptcy.
Discuss Your Concerns About Bankruptcy With A Lawyer
Let us hear from you at your earliest opportunity. Initial consultations are free. To schedule an appointment with a bankruptcy lawyer, call 949-603-2218 or send an email inquiry.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.