Bankruptcy Filing Frequently Asked Questions
Answers to your most pressing bankruptcy concerns
The questions and answers below reflect the most common concerns our clients have. This information should not be cited as legal authority or substitute for the advice of legal counsel. For these and any additional questions on your debt and bankruptcy issues, contact our bankruptcy law firm directly.
Intro to bankruptcy
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Chapter 7 and Chapter 13
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More frequently asked questions
- What is the automatic stay?
- What is a discharge in bankruptcy?
- When does discharge occur?
- Are all debts discharged?
- Does the debtor have the right to a discharge?
- May the debtor pay a discharged debt after the bankruptcy case has concluded?
- What is the meeting of creditors (also known as a 341 Hearing)?
- What is the confirmation hearing?
Take control. Get relief. Contact us.
Bankruptcy may not be for everyone, but it is one way to gain a fresh start in life. Our Woodstock & Alpharetta bankruptcy attorneys work hard to bring you the best legal representation in debt relief matters. Call our office today at 770-635-0750 or contact us online to schedule a free initial consultation and put our experience to work for you.
Intro to bankruptcy
How does bankruptcy help?
From an individual debtor's standpoint, one of the primary goals of filing a bankruptcy case is to obtain relief from burdensome debt. Relief is attained through the bankruptcy discharge, the purpose of which is to provide a fresh start to the honest debtor.
Will filing bankruptcy protect my property?
The automatic stay stops and prevents foreclosure, repossession, garnishments, collection calls, etc. Upon notice of the Chapter 7 bankruptcy or Chapter 13 bankruptcy case, creditors must cease attempting to collect from the debtor or the debtor's property until further order from the bankruptcy court.
Will filing bankruptcy affect my job?
A governmental unit/employer or a private employer may not discriminate against a person solely because the person was a debtor, was insolvent before or during the case, or has not paid a debt that was discharged in the case. The law provides express prohibitions against discriminatory treatment of debtors by both governmental units and private employers. The law prohibits the following forms of governmental discrimination:
- Terminating an employee
- Discriminating with respect to hiring
- Denying, revoking, suspending, or declining to renew a license, franchise, or similar privilege
A private employer may not discriminate with respect to employment if the discrimination is based solely upon the bankruptcy filing.
How much does it cost to file bankruptcy?
Presently the court filing fees are $274.00 for Chapter 13 and $299.00 for Chapter 7. Beyond that, each case is different. We will determine attorney fees after examining the complexity of your case.
Who can I include in my bankruptcy?
You should list anybody and everybody to whom you might owe money or who might assert a claim of any kind against you. This includes taxes, child support, student loans, credit cards, medical bills, alimony, mortgages, car loans, finance companies, credit unions, etc. They might not all be treated the same in your case, and some might not be discharged, but every one of your creditors must be listed.
How do I get started?
For your convenience we have provided our client information worksheet that you can download, print, and complete at your convenience. Please fill in the information as completely as possible. Be sure to list each and every one of your creditors. Please then call our office at 770-635-0750 and make an appointment for a free consultation with us. Of course, if you have any questions in the meantime, please do not hesitate to call or contact us online.
Chapter 7 and Chapter 13
What is Chapter 7 bankruptcy?
Chapter 7 (of the United States Bankruptcy Code), titled Liquidation, contemplates an orderly, court-supervised procedure by which a trustee collects the assets of the debtor's estate, reduces them to cash, and makes distributions to creditors, subject to the debtor's right to retain certain exempt (protected) property and the rights of secured creditors. Because there is usually little or no nonexempt property in most Chapter 7 cases, there may not be an actual liquidation of the debtor's assets. These cases are called "no-asset cases." A creditor holding an unsecured claim will get a distribution from the bankruptcy estate only if the case is an asset case and the creditor files a proof of claim with the bankruptcy court. In most Chapter 7 cases, the debtor receives a discharge that releases the debtor from personal liability for certain dischargeable debts. The debtor normally receives this discharge a few months after the petition is filed.
Who can file for Chapter 7?
To qualify for relief under Chapter 7 of the U.S. Bankruptcy Code the debtor must be an individual, a partnership, or a corporation.
An individual cannot file under Chapter 7 or any other chapter, however, if during the preceding 180 days a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court or the debtor voluntarily dismissed the previous case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens.
What is a Chapter 7 trustee?
Upon the filing of the Chapter 7 petition, the United States trustee appoints an impartial case trustee to administer the case and liquidate the debtor's nonexempt assets. The Chapter 7 trustee will preside over the meeting of creditors and determine whether there are any nonexempt assets available to liquidate for the benefit of creditors.
What is Chapter 13?
Chapter 13, titled Adjustment of Debts of an Individual with Regular Income, is designed for an individual debtor who has a regular source of income. Chapter 13 is often preferable to Chapter 7, because it enables the debtor to keep a valuable asset, such as a house. It is also favored because it allows the debtor to propose a plan to repay creditors over time—usually three to five years. At a confirmation hearing, the court either approves or disapproves the plan, depending on whether the plan meets the Bankruptcy Code's requirements for confirmation.
Chapter 13 is very different from Chapter 7, since the Chapter 13 debtor usually remains in possession of the property of the estate and makes payments to creditors, through the Bankruptcy Trustee, based on the debtor's anticipated income over the life of the plan. Unlike Chapter 7, the debtor does not receive an immediate discharge of debts. The debtor must complete the payments required under the plan before the discharge is received. The debtor is protected from lawsuits, garnishments, and other creditor action while the plan is in effect. The discharge is also considerably broader—more debts are eliminated—under Chapter 13 than the discharge under Chapter 7.
Who can file for Chapter 13?
Any individual, even if self-employed, is eligible for Chapter 13 relief as long as the individual's unsecured debts are less than $336,900 and secured debts are less than $1,010,650. A corporation or partnership may not qualify as a Chapter 13 debtor. Beginning April 1, 2010 these limits will be raised to $360,475.00 for unsecured debt and $1,081,400.00 for secured debts.
What is a Chapter 13 trustee?
Upon the filing of the Chapter 13 petition, an impartial case trustee is appointed by the United States Trustee to monitor the case and administer the payments under the plan. An attorney from the Chapter 13 trustee's office will preside over your meeting of creditors to ensure that you are making the payments under your plan and that it meets the requirements of the law.
More frequently asked questions
What is the automatic stay?
The filing of a petition under Chapter 7 or Chapter 13 "automatically stays"—or halts—most actions against the debtor or the debtor's property. This stay arises by operation of law and requires no judicial action. As long as the stay is in effect, creditors generally cannot initiate or continue any lawsuits, wage garnishments, or even telephone calls demanding payments. Creditors normally receive notice of the filing of the petition from the clerk of the bankruptcy court.
What is a discharge in bankruptcy?
Under the federal bankruptcy statute, a discharge is a release of the debtor from personal liability for certain specified types of debts. The debtor is no longer required by law to pay any debts that are discharged. The discharge operates as a permanent order directed to the creditors of the debtor. Creditors must refrain from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts.
Note that a valid lien—such as a charge upon specific property to secure payment of a debt—that has not been avoided or made unenforceable in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien.
When does the discharge occur?
The timing of the discharge varies, depending on the chapter under which the case is filed. In a Chapter 7 case, for example, the court usually grants the discharge promptly on expiration of the time fixed to file an objection to discharge and the time fixed to file a motion to dismiss the case for substantial abuse (60 days following the first date set for the “341 meeting” of creditors). Typically, this occurs about four months after the date the debtor files the petition with the clerk of the bankruptcy court. In Chapter 13, the court grants the discharge as soon as practicable after the debtor completes all payments under the plan.
Are all debts discharged?
Not all debts are discharged. The debts discharged vary under each chapter of the Bankruptcy Code. Section 523(a) of the code specifically exempts various categories of debts from the discharge granted to individual debtors. Therefore, the debtor must still repay those debts after bankruptcy. Congress has determined that these types of debts are not dischargeable for public policy reasons based either on the nature of the debt or the fact that the debts were incurred due to improper behavior of the debtor, such as the debtor's drunken driving.
A broader discharge of debts is available to a debtor in a Chapter 13 case than in a Chapter 7 case. As a general rule, the Chapter 13 debtor is discharged from all debts provided for by the plan except certain long-term obligations, such as—
- Home mortgage
- Debts for alimony or child support
- Debts for most government funded or guaranteed educational/student loans or benefit overpayments
- Debts arising from death or personal injury caused by driving while intoxicated or under the influence of drugs
- Debts for restitution or a criminal fine included in a sentence on the debtor's conviction of a crime
Does the debtor have the right to a discharge?
In Chapter 7 bankruptcy cases, the debtor does not have an absolute right to a discharge. An objection to the debtor's discharge may be filed by a creditor, by the trustee in the case, or by the United States Trustee. A creditor who desires to object to the debtor's discharge must do so by filing a complaint in the bankruptcy court before a specific deadline. In Chapter 13 bankruptcy cases, the debtor is entitled to a discharge upon completion of payment plans and required credit counseling.
May the debtor pay a discharged debt after the bankruptcy case has concluded?
A debtor who has received a discharge may voluntarily repay any discharged debt, even though it can no longer be legally enforced. Sometimes a debtor agrees to repay a debt because it is owed to a family member or because it represents an obligation to an individual for whom the debtor's reputation is important, such as a family doctor.
What is the meeting of creditors (also known as a 341 hearing)?
A 341 hearing is an informal meeting of the creditors. The trustee asks you questions about your debts while you are under oath. Creditors may also appear at your hearing to ask questions.
What is the confirmation hearing?
The confirmation hearing is the hearing in a Chapter 13 case where the judge approves the proposed repayment plan. After the plan is confirmed, the trustee will begin making payments to the creditors who have filed claims in the case. The confirmation hearing usually takes place about a month after the meeting of creditors.
