Bankruptcy FAQ

1. What are the main differences between Chapter 7, Chapter 13, and Chapter 11 bankruptcy?

  • Chapter 7 is known as liquidation bankruptcy, ideal for those with limited income, allowing for the discharge of most unsecured debts by liquidating non-exempt assets.
  • Chapter 13 is a reorganization bankruptcy for individuals with regular income, enabling them to keep their assets while repaying debts through a court-approved plan.
  • Chapter 11 typically applies to businesses (but can also apply to individuals with substantial debts) and allows for debt reorganization under a court-approved plan without liquidating assets.

2. Will filing for bankruptcy stop creditors from harassing me?

Yes. Once you file for bankruptcy, an automatic stay is immediately applied. This stay stops most creditors from continuing with collection activities, including calls, letters, wage garnishments, and lawsuits.

3. Can I discharge all my debts through bankruptcy?

Not all debts can be discharged in bankruptcy. Non-dischargeable debts include most student loans, child support, alimony, certain taxes, and debts from fraudulent activities.

4. How long will bankruptcy stay on my credit report?

A Chapter 7 bankruptcy stays on your credit report for 10 years from the filing date, while Chapter 13 bankruptcy remains for 7 years. Despite this, you can start rebuilding your credit immediately after discharge.

5. Do I need a lawyer to file for bankruptcy?

While it’s legally possible to file for bankruptcy without an attorney (pro se), navigating the bankruptcy process can be complex. An experienced bankruptcy lawyer can help ensure your paperwork is filed correctly, represent you in court, and advise you on the best course of action for your situation.

6. How does bankruptcy affect my credit score?

Filing for bankruptcy will initially lower your credit score. However, as your debt-to-income ratio improves and you begin to rebuild your credit, you can gradually improve your score over time.

7. Can I keep my home and car if I file for bankruptcy?

In many cases, yes. Exemptions provided under state or federal law may allow you to keep your home and car, depending on the equity you have in these assets and the bankruptcy chapter you file under. Specifics vary, so consult with an attorney.

8. What is the means test in Chapter 7 bankruptcy?

The means test determines your eligibility for Chapter 7 bankruptcy based on your income, expenses, and family size. If your income is below the median for your state, you may qualify. If not, you might have to consider Chapter 13 bankruptcy.

9. How often can I file for bankruptcy?

There are time limits between discharges, varying by the type of bankruptcy:

  • From Chapter 7 to Chapter 7: 8 years.
  • From Chapter 13 to Chapter 13: 2 years.
  • From Chapter 7 to Chapter 13: 4 years.
  • From Chapter 13 to Chapter 7: 6 years, with some exceptions.

10. Will I have to go to court if I file for bankruptcy?

Most bankruptcy filers must attend at least one meeting of creditors (341 meeting), which is not a court appearance but a meeting presided over by the bankruptcy trustee. Depending on your case, you may also need to appear in court.

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*Cities also include: Uniontown, Connellsville, Brownsville, Masontown, Mt. Pleasant, Scottsdale, Latrobe, Murrysville, Irwin, Ligonier, Hempfield, Desmond, New Stanton.
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