FAQ

1. What is bankruptcy?
2. What&faq/#8217;s the difference between secured and unsecured debt?
3. Which kind of bankruptcy should I file?
4. Can I change from one chapter of bankruptcy to another?
5. Who can file bankruptcy?
6. How often can you file for bankruptcy?
7. What do I need to begin the bankruptcy process?
8. Do you have to have a certain amount of debt to file?
9. What is a joint petition?
10. What happens if one spouse files for bankruptcy and not the other?
11. Does my divorce decree protect me from creditors if my ex files for bankruptcy?
12. Can a co-signor of a loan be responsible for a debt if the other person has declared bankruptcy?
13. Do I have to file bankruptcy on all the accounts I owe, or can I keep some?
14. Will I lose my retirement accounts or payments from social security?

Bankruptcy allows individuals or businesses (debtors) who owe others (creditors) more money than they&faq/#8217;re able to pay to either work out a plan to repay the money over time or completely eliminate (discharge) most of the bills. Back to Top.

Secured debt is a claim that&faq/#8217;s secured by some type of property, either by an agreement or involuntarily with a court judgment or taxes. Creditors can generally claim the property that secures the debt in the event of bankruptcy. Unsecured debt is not tied to any type of property, and the creditor doesn&faq/#8217;t have a claim to their property. A mortgage is a secured debt on you property. Back to Top.

Consumers typically file Chapter 13 bankruptcy, where repayment is made to creditors, or Chapter 7 where the debts are dismissed. Each chapter of bankruptcy spells out: what bills can be eliminated, how long payments can be stretched out, and what possessions you can keep. The type depends on your circumstances and if you have assets available to repay all or part of your debts. Bankruptcy laws can be tricky and involved, so determining if, when and which type of bankruptcy you need should be made with careful thought or the input of a bankruptcy lawyer. Back to Top.

Generally, you can convert a case one time to any other chapter you&faq/#8217;re eligible for. The request to convert can be a simple one-sentence document. Watch out for issues, such as moving from a Chapter 13 to a Chapter 7, you&faq/#8217;ll need to review whether you have acquired items that are now be considered property of the estate under Chapter 7 that weren&faq/#8217;t part of the previous filing. Ask the trustee or a bankruptcy lawyer for additional issues. Back to Top.

With few exceptions, any person or business owing money to a creditor can file a bankruptcy petition. Back to Top.

Filing bankruptcy can adversely affect your ability to obtain future credit, rent housing and even negatively impact a job application. Any decision to file must be carefully considered. Chapter 7: Can be filed every 8 years from a previous chapter 7 filing or 6 years from a prior chapter 13 filing. Chapter 13: Can be filed 4 years from a prior Chapter 7 filing or 2 years from a prior Chapter 13 filing. Back to Top.

Compile a list of past and present debts as well as a schedule, or list, or assets and liabilities. You&faq/#8217;ll also need a statement of financial affairs to file with the bankruptcy court in addition to your filing fee. Back to Top.

No. However, some situations may not warrant filing for bankruptcy. If your financial situation is temporary, you may consider making arrangements with individual creditors for a change in payment amounts or a reduction in the total amount due. If you have little property or money, filing bankruptcy may not be necessary, as the creditor may not be able to collect the debt. Back to Top.

A joint petition is when an individual and a spouse file a single petition. Unmarried partners must each file a separate case. Back to Top.

If one spouse files and the other doesn&faq/#8217;t, the one who doesn&faq/#8217;t file could be responsible for the debts. Review this carefully before filing. Back to Top.

No. If you are a co-signor with your ex-spouse on a debt acquired while married, the creditor can require the entire payment of that debt from you even though the divorce decree assigns the full debt to your ex-spouse. Your divorce decree may address any recourse you may have against your ex-spouse should he default on the loan obligations. Back to Top.

Yes. The lender can require the co-signor to make payments on a loan once the principal has declared bankruptcy on the credit. This makes it extremely important when considering co-signing a loan: Be ready, and able, to pay the loan in the event that the principal signor defaults. Back to Top.

You must include all the debts you owe in your petition and schedules. You may opt to keep some debts by &faq/#8220;reaffirming&faq/#8221; the specific debt. Back to Top.

Generally, no. Retirement accounts that are ERISA-qualified aren&faq/#8217;t considered property of an estate and aren&faq/#8217;t taken into consideration as assets. Social Security benefits are protected from assignment or garnishment for debts in bankruptcy. Once paid, the benefits continue to be protected only as long as they can be identified as Social Security benefits. For example, money in a bank account where the &faq/#8220;only&faq/#8221; deposits into the account are direct deposits of Social Security benefits are identifiable and generally protected. Back to Top.