What is the difference between Chapter 7 bankruptcy and Chapter 13 bankruptcy?
Chapter 7 is a debt liquidation bankruptcy that eliminates or reduces most debts. Chapter 13 bankruptcy is a debt repayment bankruptcy that results in a three- or five-year debt repayment plan.
People who want to file for Chapter 7 bankruptcy must meet a means test that takes into account their income and ability to pay debts. A Chapter 13 bankruptcy is often used by people who have significant income and assets and who are not eligible for Chapter 7 relief or want to protect assets from liquidation.
Can I restore credit after bankruptcy?
Yes, and you can do it faster than you may think. People are often surprised to find that credit card companies, auto lenders, and other credit providers are willing to provide credit to people who have had a bankruptcy. In fact, many creditors actively fight for the business of recent Chapter 7 bankruptcy debtors because they know their debts have been discharged and they can’t file for Chapter 7 bankruptcy again for at least eight years.
Can I keep some of my property?
Yes, certain assets are exempt from liquidation. Homes and cars of a certain value are exempt from liquidation. Most people are surprised at how much of their property they can actually keep.
Can my employer fire me if it learns about my bankruptcy?
No. Employers may not discharge an employee because he or she filed for bankruptcy.
What debts are dischargeable?
Most forms of debt are dischargeable through Chapter 7 bankruptcy. Credit card debts and medical bills are dischargeable. Federal income tax debts may also be discharged if they are at least three years old and/or meet additional requirements.
Are there any debts that cannot be discharged?
Yes. Certain debts like child support, student loans, judgments against you as a result of drunk driving or fraud, and some income taxes may not be discharged.
If I have a car which has a loan against it, can I keep it?
In almost every case, the answer is yes, but you will have to file a “Reaffirmation Agreement” which must be reviewed and approved by the bankruptcy judge assigned to your case.
Do I need a lawyer to file bankruptcy?
Anybody can represent themselves in court, but have you heard the old adage “Never bring a knife to a gunfight”? A good bankruptcy lawyer knows how to structure your case so you can take maximum advantage of your exemptions and get you the maximum benefits from your bankruptcy. Your creditors have legal counsel. You should, too.
How Can I Learn More about Bankruptcy?
To speak with an experienced attorney about bankruptcy and other debt relief services, contact the Law Office of Robert L. Firth in Cathedral City, California. We represent clients throughout Riverside County and the surrounding areas.