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Bankruptcy Frequently Asked Questions
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
What is the difference between Chapter 7 and Chapter 13 bankruptcy?
Chapter 7 is known as “straight” bankruptcy or liquidation. It requires an individual to give up property, which is not “exempt” under the law, so the property can be sold in order to help satisfy creditors. Generally, those who file Chapter 7 keep all of their property except property which is not exempt property or which is subject to a lien, which they cannot avoid or afford to pay. Chapter 13 is a type of “reorganization” used by individuals to pay all or a portion of their debt over a period of years using their current income. In a Chapter 13 case, you file a “plan” showing how you will pay off some of your overdue and current debts over three to five years. The most important thing about a chapter 13 case is that it will allow you to keep your valuable property.
How do I know if I qualify for bankruptcy?
At the Law Office of Matthew L. Hood we will help you to assess your situation and help you understand your rights and options. Most overburdened debtors can qualify for Chapter 13 bankruptcy. With new bankruptcy laws adopted in 2005, you will have to meet additional tests to qualify for Chapter 7 bankruptcy. Please contact us for your free consultation to see if you qualify under the new Chapter 7 bankruptcy laws. Will I lose my house or my car?
In most cases, you will not lose your home or car during your bankruptcy case as long as your equity in the property is fully exempt and you have significant income after the Chapter 7 discharge or the Chapter 13 reorganization to make the required payments under the car loan and under the mortgage.
What debts can I discharge under Chapter 7 bankruptcy?
- Unsecured debts such as credit card balances
- Unpaid medical bills
- Judgments
- Business debts
- Auto accident claims
- Balance that remains after an asset has been repossessed (such as a car).
What debts can I discharge under Chapter 13 bankruptcy?
Assuming the plan in completed, the debts that may be discharged in a Chapter 13 are similar to those that may be discharged in a Chapter 7. If the debtor loses his or her job, a hardship discharge may be possible if the plan is not completed, or it may be possible to convert to a Chapter 7 bankruptcy if such an event occurs during the period of the Chapter 13 reorganization plan.
What debts cannot be discharged under Chapter 7 bankruptcy?
- Most IRS taxes due (if older than three years it may be possible to discharge)
- Child support or alimony obligations
- Most Student loans
- Court Restitution orders
- Criminal Fines
How will bankruptcy affect my ability to get credit in the future?
Bankruptcy will affect your credit. Unfortunately, if you are behind on your bills, your credit may already be bad. Bankruptcy will probably not make things any worse. The fact that you’ve filed a bankruptcy can appear on your credit record for ten years from the date your case was filed. Rebuilding your credit will take time, but most individuals are able to qualify for car loans and home loans soon after discharge. Keep in mind that the creditors may charge a higher interest rate.
How long does the bankruptcy process take?
In most cases, you can expect the Chapter 7 process to take approximately 4 months, but remember you are protected from creditors as soon as your case is filed.
How do I start the bankruptcy progress?
Make an appointment! We offer a free consultation in our office where we will review your income, assets and debts to see if bankruptcy may be a solution to your debt problems. We look forward to discussing your situation with you to see if bankruptcy is right for you.
Call the Law Office of Matthew L. Hood, LLC for a free consultation.
