Q. Will filing bankruptcy stop foreclosure?
A. Both a Chapter 7 and Chapter 13 case filing stops foreclosures on mortgages (homestead, rental, and commercial property mortgages) so long as the sheriff’s sale has not been held. Chapter 13 also allows you to pay back the mortgage arrears on a homestead mortgage in your chapter 13 plan over an extended period of time, while you pay the regular monthly mortgage payments after the case is filed.
Q. Will I lose any of my property if I file bankruptcy?
A. Generally, in a Chapter 13 case you will not lose any property, even if it is not exempt. In most Chapter 7 cases, you are able to exempt (protect) all your property. Under the laws of Texas, and under the federal laws, certain property is declared exempt, and out of the reach of your general creditors. It is the exempt property that you will get to keep after your bankruptcy. We will advise you as to whether or not you have any nonexempt assets which you will either have to surrender to the trustee, or buy back from the trustee. In most cases, you will be able to keep your home, automobile, retirement accounts and pensions, household furnishings, and all your property by claiming either the state or federal exemptions. If the property is security for the loan (ie. home with a mortgage; car with a loan) you will almost always need to keep making the payments to keep the property; or, you can surrender the property to the creditor and the debt is discharged (cancelled).
Q. How much does it cost to file bankruptcy?
A. The court filing fee for a Chapter 7 is $299.00 and for a Chapter 13 it is $274.00. The filing fee is the same whether you are filing individually or jointly with your spouse. The attorney fees for a particular case vary depending upon the complexity of the case. The attorney fees will be determined after a review of your particular facts. We can generally quote you a fee over the phone.
Q. Does filing bankruptcy have to be done by both husband and wife?
A. No. Nevertheless, in most instances the husband and wife will file a joint case if they both have debt. A situation where a joint case would not be warranted is where one of the spouses has little or no debt. However, even where one spouse files without the other, the bankruptcy laws require that both spouses’ income and expenses be analyzed for purposes of determining whether you qualify for Chapter 7 or Chapter 13. Also, the bankruptcy filing only protects and discharges the debt to the person filing the case. So if there is a joint debt, the spouse who does not file, is still legally responsible to pay the debt.
Q. Do I have to go to Court if I file Chapter 7 or Chapter 13?
A. Generally, you will have to appear in Court only one time. This court appearance is held approximately one month after your case has been filed and is called “The First Meeting of Creditors”. At this hearing, you will be put under oath and questioned by the trustee about the information contained in your petition and schedules, including your assets and liabilities. In most cases, no creditors appear for this hearing.
Q. Can my employer fire me for filing bankruptcy?
A. No. Federal law prohibits employers from terminating the employment of, or discriminating with respect to employment against, an individual who files either a Chapter 7 or Chapter 13.
Q. Can my utility company refuse to serve me if I discharge their bill in bankruptcy?
A. A utility company may not alter, refuse, or discontinue service to, or discriminate against you solely on the basis of a bankruptcy filing that includes the utility. Although, the utility company can ask for a reasonable deposit, within 20 days of the case filing, for continued future service. The deposit is usually two times your average monthly bill.
Q. How does filing bankruptcy affect my credit?
A. Under the Federal Fair Credit Reporting Act, a credit bureau can report the filing of any bankruptcy for ten years from the date the case is filed. Generally, a Chapter 13 is reported for seven years from the date of filing, so long as the case was completed and a discharge was granted. In a Chapter 13 case, you cannot incur any new debts, with some exceptions, until your case is completed. As a rule of thumb, most mortgage companies will not grant a new mortgage to you until two years after the bankruptcy filing. In many instances after a Chapter 7 filing and discharge, you can obtain credit because the creditors know you cannot file Chapter 7 for another eight years, and generally you have little or no debt since the present Chapter 7 discharged all or most of your debt, making you a good credit risk (assuming you have monthly income and ability to pay the new debt).
Q. Should my business file bankruptcy?
A. If your business is struggling financially, you need to know what alternatives are available to resolve your financial problems. Depending upon the structure of your business (sole proprietorship, partnership, corporation, or limited liability company), an out of court workout plan, Chapter 11, or Chapter 13 may be available to you to rehabilitate your business. Early legal counseling and financial planning may help save your business. If the business is shutting down and ceasing operations, then a Chapter 7 may be the appropriate course of action. Also, if you as an individual personally guaranteed the business loans, you may be forced to file an individual Chapter 7 or Chapter 13 to eliminate the personal guarantee.