Bankruptcy FAQs

WHAT IS BANKRUPTCY?

Bankruptcy is a legal procedure that takes place in federal bankruptcy court. It starts when a debtor files a petition asking a bankruptcy court to protect him or her from creditors. The main purpose of bankruptcy is to stop creditors' collection efforts, and then obtain a discharge or restructuring of debts. Bankruptcy provides relief to debtors overwhelmed by debt and besieged by collection efforts of creditors, which are sometimes insufferable. It is intended to give honest, but unfortunate, debtors a fresh start.

Bankruptcy laws are authorized by the United States Constitution Article I, Section 8. The Bankruptcy Act was adopted by the U.S. Congress, and has been a part of federal law ever since 1898.

WHAT IS CHAPTER 7?

Chapter 7 will eliminate most of your debt, including credit cards, medical bills, unsecured loans, repossession balances, and other unsecured debts. If you have a secured debt, like a home or vehicle loan, you will need to continue making the payments in order to keep that item. It will stop creditor harassment, garnishments, tax levies, foreclosures, and repossessions. To qualify for a Chapter 7, we need to show the court that you do not have enough income each month to pay your regular living expenses and pay your consumer debt. You will need to attend a hearing approximately 30 days after your case is filed. This hearing is a review of your bankruptcy petition. Your case will be discharged 60 days after that hearing

WHAT IS CHAPTER 13?

Any individual with any type of income can file a Chapter 13 case. A petition is filed with Bankruptcy Court that provides a plan for the repayment of your debt. A monthly payment is made to the Chapter 13 Trustee, and he in turn pays the creditors. Creditors are repaid over a three to five year period of time. When a Chapter 13 case is filed, the Bankruptcy Court orders your creditors to immediately stop all collection efforts. This includes lawsuits, garnishments, repossessions, and foreclosures. This is a good option for those individuals that don't qualify for a Chapter 7 because of income or because they filed a Chapter 7 within the last eight years. Chapter 13 is good choice if you are behind on your home or car payments.

HOW MUCH IS THE COURT FILING FEE?

The filing fee for a Chapter 7 is $299.00 and a Chapter 13 is $274.00. There are also Attorney's fees, which can be quoted over the phone if you contact our office.

HOW LONG DOES BANKRUPTCY STAY ON YOUR CREDIT REPORT?

All credit information and payment history stays on your credit report for 7 to 10 years. It is the same for any Bankruptcy.

HOW LONG DOES A BANKRUPTCY CASE LAST?

An average Chapter 7 case is completed within four months. Chapter 13, because it is a repayment plan, runs no longer than five years.

DO I HAVE TO GO TO COURT?

You must attend one hearing when filing. It is just a review of your case and only takes a few minutes to 10 or 15 minutes. If you file for Chapter 13 you may have to attend and additional hearing, but it is unlikely.

WILL I LOSE MY HOME OR CAR?

Your homestead and vehicle are usually protected. If it has a loan against it you will need to continue making the monthly payments in order to keep it.

CAN THEY COME INTO MY HOME AND TAKE MY BELONGINGS?

In over 20 years, not one of Mr. Goldberg’ client’s has ever had anyone go into their home and take personal property from one of his client’s. Unless you are in fact a criminal and lying to the court, there is no seizing of your personal property. There are laws in Bankruptcy to protect your personal property called exemptions. These laws can be discussed in your appointment when you meet with Mr. Goldberg.

JUST HOW MANY BANKRUPTCIES ARE FILED?

Around 30 million people and companies have already filed bankruptcy between 1980 and 2009. In fact, from October 1st, 2007 to September 30th, 2008, 1,042,993 bankruptcies have been filed. This is because, when no one else will, the Bankruptcy Laws and the Bankruptcy Court will give debt relief to people and companies; it is their job and function.

WHAT ARE THE BANKRUPTCY CHAPTERS?

The chapters are 7, 9, 11, 12 and 13. Individuals and families that have consumer and business debts can either file a chapter 7 or a chapter 13 depending on the circumstances. The other chapters 9, 11 & 12 are not for individuals or families with consumer debts.

WHERE DID BANKRUPTCY COME FROM?

Bankruptcy, the forgiveness and discharge of debts under certain circumstances, originally started in Roman times. Today, our Constitution, the legal document which is the basis of law in the United States, contains the authority for bankruptcy throughout the country. Article One, Section 8 states, "the congress shall have the power... to establish... uniform laws on the subject of bankruptcies throughout the United States".