Bankruptcy FAQ
Plant City Bankruptcy Attorney
Will I qualify for Chapter 7?
Many people do qualify for
Chapter 7, particularly those who are in serious financial trouble and cannot hope
to pay off all of their bills, no matter how they attempt to juggle payments.
Before you can proceed with a petition for Chapter 7 bankruptcy, however,
you may be required to pass a "means test" to determine whether
your income is insufficient to meet your financial obligation and to prove
that you are truly in need of this sweeping from of debt relief. Working
with an attorney can increase the likelihood that you will pass the means
test, such as by taking advantage of exemptions to reduce the income that
you must report.
Can I stop foreclosure on my home by filing for bankruptcy?
There may be the possibility to stop
foreclosure on your home by filing Chapter 13. In this form of bankruptcy, your overdue
bills (including mortgage payments) are paid back over a 3 – 5 year
period. After filing for bankruptcy protection, whether Chapter 7 or
Chapter 13, an automatic stay stops all collection actions, including foreclosure.
During that period, your mortgage documents could be reviewed to find
out if you have been a victim predatory lending practices, or to negotiate
with your lender to seek a loan modification.
Will bankruptcy destroy my credit?
A bankruptcy will stay on your credit report for 10 years if you file
under Chapter 7, or 7 years if you file under Chapter 13. The majority
of people who file for bankruptcy are already in serious credit trouble,
and the fact of bankruptcy could actually be helpful in the long run,
as you will no longer owe money for many of your debts, and these debts
will show as discharged on your credit report. Over time, you can rebuild
your credit. It often takes a much shorter period of time than expected,
as long as you pay all of your bills on time thereafter. Another thing
to keep in mind is the fact that waiting to file for bankruptcy may even
make the situation worse, as you continue to miss payments and struggle
under the burden of an unsustainable burden of debt.

How long will it take for a bankruptcy to be completed?
For Chapter 7, the process takes about 4 months, after which your unsecured
consumer debt is discharged, and for Chapter 13, the payments will continue
for 3 – 5 years, after which the remaining debt is discharged. In
either case, you could save thousands or even hundreds of thousands, based
upon your financial situation.
What is the difference between Chapter 7, 11, and 13?
Chapter 7 is commonly referred to as the liquidation bankruptcy. Debtors
are allowed to keep certain property exempt while the rest of their assets
are liquidated by the trustee to pay off remaining debts. Chapter 13 is
for individuals with a steady income who can repay some or all of their
debt over a period of time by creating a structured repayment plan. Chapter
11 lets corporations, partnerships, and some individuals that do not qualify
for chapter 13 to reorganize their holdings without having to liquidate
all their assets. A payment plan is required, and if it is accepted by
creditors and confirmed by the court, the debtor can begin reorganize
their personal, financial, or business affairs.
What is a bankruptcy discharge?
A discharge releases the debtor from being personally liable for any remaining
debts. It prevents the creditors from taking any action against the debtor
to collect on their debts or take any further action. Only certain debts
can be discharged, such as if they existed on the date the bankruptcy
case was filed and were listed on the schedules. Debts, such as student
loans, spousal support, and child support will likely not be able to be
discharged in bankruptcy.
Can I be held liable for a former spouse who has declared bankruptcy and
has listed me as a co-signer?
A creditor can demand payment of the debt you co-signed for from your
share of the marital property. A bankruptcy or state court can determine
if you are not obligated to pay a certain amount. Just as you split up
property in a divorce, you are also required to split up debt. Your first
step should be to seek legal advice from a qualified bankruptcy attorney.