Bankruptcy FAQ

”What
Bankruptcy is a federal court process to help people and businesses eliminate debts in some cases. In other cases, debts are repaid in full or in part over time.
You must file a Petition asking for bankruptcy protection. You will also have to file detailed schedules of your assets, your debts and your financial arrangements.
”What
Chapter 7 cancels many debts, so that you have a fresh start. In Florida, you may be able to keep some property, which is called “exempt property” that creditors cannot take from you. In some cases, you may be able to keep your car and home if your loans on them are current and you keep paying your loans. A trustee is appointed to take over your property that is not protected from creditors. Any property of value will be sold or turned into money to pay your creditors. There are income limits to qualify for a Chapter 7. If you do not qualify, you will have to file a Chapter 13 case and prepay some or all of your debts over time.
”What
Chapter 13 allows you to pay part or all of your debts over time. You can usually keep your property, but you must agree to pay part of your income to your creditors. If a mortgage is behind or in foreclosure, you may be able to pay back the past due amount over time. You will make a written plan to repay your debts and past due amounts. The trustee will collect the payments from you, pay your creditors and make sure you comply with your repayment plan. The Court must approve your repayment plan and your budget.
”What
Chapter 12 allows family farmers to repay debts over time.
”What
This is used mostly by businesses to reorganize debts and finances so that the business may continue to operate. In Chapter 11, you may continue to operate your business, but your creditors and the Court must approve your written plan to repay your debts. There is no trustee unless the judge decides that one is necessary. If a trustee is appointed, the trustee takes control of your business and property. My Mortgage Is Behind.
”Can
If mortgage is behind or in foreclosure, you may be able to pay back the past due amount over time. You must file a Chapter 13 case. You will make a written plan to repay your debts and past due amounts. If you make all your payments under the plan, your mortgage will be current, and you may keep your house.
”Do
You usually do not have to go to Court to see the Bankruptcy Judge. In all cases, you will have to attend a Creditors’ Meeting, but that does not involve the Judge. In some case, special matters may arise in your case, and you will have to go to a Court hearing.
”What
About a month after you file your Petition, there will be a Creditors’ Meeting. The Trustee will review your schedules and ask any questions about your case and your finances. Creditors sometimes ask questions, but often do not ask any questions. A Creditors’ Meeting is usually routine and brief. If you hire this law firm, an attorney will be with you to handle any situation at the Creditors’ Meeting.
”What
As soon as you file your case, the bankruptcy court enters an order called a “stay”. This prevents all creditors from taking any actions against you. Your creditors cannot contact you anymore. The stay order may delay a foreclosure or the repossession of your automobile.
”What
One of the reasons you may file bankruptcy is to have some debts cancelled. A discharge is the Court Order which states that you do not have to pay some of your debts. However, some debts cannot be discharged. For example, you cannot discharge debts for the following: Most taxes; Child Support; Alimony; Most Student Loans; Court Fines and Criminal Restitution; Personal Injury caused by driving drunk or under the influence of drugs. The discharge only cancels debts that happened before the date you filed for bankruptcy.
”What
Even if a debt can be discharged (cancelled), you may have special reasons why you want to promise to pay that debt. For example, you may want to work out a plan with the bank to keep your car. To promise to pay that debt, you must sign and file a Reaffirmation Agreement with the Court. Reaffirmation Agreements are voluntary. You are NEVER required to make a Reaffirmation Agreement. Reaffirmation Agreements must be in your best interest and must be affordable under your budget. Reaffirmation Agreements may be canceled anytime before the Court issues your discharge or within 60 days after the agreement is filed with the Court, whichever gives you the most time. If you are an individual and you are represented by an attorney, your attorney must sign the Reaffirmation Agreement. Then the court must hold a hearing to decide whether to approve the Reaffirmation Agreement. The agreement will not be legally binding until the court approves it. If you reaffirm a debt and then fail to pay it, you owe the debt the same as though there was no bankruptcy. The debt will not be discharged and the creditor may take action to recover any property on which it has a lien or mortgage. The creditor may also take legal action to recover a judgment against you. Think carefully before signing a Reaffirmation Agreement and make sure it is in your best interest.
”When
A Chapter 7 case is over when the Court enters the Discharge Order. A Chapter 13 case is over when you have made all the payments in your payment plan.
”Can
Usually not. Under very limited circumstances some student loans may be cancelled.
”Can
No.
”What
In a Chapter 7 case, most unsecured debts, like credit cards and medical bills, will be cancelled. Car loans or mortgages will be cancelled if you don’t keep the property. In Chapter 13 cases, only part of some debts will be cancelled.

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