The Law Offices of Michael A. Fakhoury, P.C. is here to answer your questions about bankruptcy law. Whether you are seeking answers to basic information about the protections available to you through a petition in bankruptcy pursuant to Chapter 7 or Chapter 13 of the Bankruptcy Code, or have thought seriously about filing bankruptcy and are seeking help about a specific legal issue, we are here to help you get control of your finances and move toward a future free of most unsecured debt.
Deciding if bankruptcy is right for you is not easy. Understanding bankruptcy law and getting the answers to your questions so that you can make an informed decision is important. It is your attorney’s job and duty to go through all of your financial issues and answer your questions in a timely manner. The following questions are often asked by our clients when they consider filing a petition in bankruptcy:
PLEASE KEEP IN MIND THAT ANSWERS AND ADVICE INDICATED THROUGHOUT THIS WEBSITE IS ONLY A BASIC OR GENERAL EXPLANATION OF BANKRUPTCY. YOUR SITUATION MAY DIFFER. THIS LAW FIRM STRONGLY URGES YOU TO SCHEDULE A FREE OFFICE CONSULTATION BEFORE YOU RELY ON YOUR INTERPRETATION OF THE ANSWERS AND ADVICE IN THIS OR ANY WEBSITE.
A: Bankruptcy is a legal process under federal law that allows a debtor or debtors (husband and wife) who owe more money than they can pay or who are unable to keep up with their bills to either eliminate their debts (Chapter 7) or work out a payment plan to pay a portion (or all) of their debts over time (Chapter 13). Chapter 11 is available for corporations.
A: Yes! The bankruptcy law grants you (the debtor) a very powerful tool called the automatic stay. An automatic stay means that creditors are prohibited from calling you, billing you or continue to freeze your bank account, garnish your wages, foreclose on your home, etc…. It will stop the creditor harassment.
A: The spouse that doesn’t file may end up liable for some of the debts – if a debt is a joint debt (husband and wife are both liable or are co-signors) and one spouse files bankruptcy and receives a discharge in bankruptcy but the other spouse does not file bankruptcy, the non-filing spouse will be billed or is still liable for the joint debt.
A: We can amend your case to include any additional debts you may find after the case is filed and before it is closed/discharged.
A: The credit report record of a bankruptcy can remain on your credit report for ten years. However, your credit rating (your ability to get credit cards, mortgage or car loan, etc…, is usually repaired much sooner). Most of our clients are able to get credit within one to two years after their discharge in bankruptcy.
A: Secured debt is debt that allows a creditor to make a claim on an asset, such as a home or a car. Unsecured debt is held by creditors that have no claim to your assets, such as credit cards, medical bills and personal bank loans.
A: No. There are certain debts like student loans, government loans, back taxes and other debts that cannot be discharged in bankruptcy.
A: In the vast majority of cases, if you own a house or car or property that you want to keep and you have a loan (such as a car loan or mortgage) and you want to retain or keep your loan, you do not lose the property. In other words, secured debts such as a mortgage or car loan remain secured debts even after the bankruptcy is closed or completed. We provide you with a reaffirmation agreement and you get to keep the property and the loan. There are exemptions, both state and federal, that allow you to keep a certain amount of personal property. We will explain how these exemptions apply to people who file bankruptcy in your state during your office consultation. This answer depends on the amount of equity you have in your property.
A: No. You must include all of your debts in your bankruptcy. Some debts, such as your mortgage, auto loan, student loan, remain valid or are not discharged (you reaffirm these debts) and the other debts, such as your credit card debts, personal bank loans, personal loans, medical bills, are forgiven (Chapter 7). Again, you must first go through an office consultation before you can fully rely on this information. This is because your financial issues may differ than the general statements made here.
A: “Discharge” is when the Bankruptcy Court issues an Order which relieves your or foregives the dischargeable debts. The Discharge or Order in a Chapter 7 bankruptcy os generally received 60 days after the 341 meeting. In Chapter 13, your discharge will be sent to you once you have completed the payments under the Chapter 13 plan.
A: Chapter 7 bankruptcy provides the debtor debt relief. The relief may eliminate most forms of unsecured debt such ascredit cards, medical bills, and personal loans. In most cases, you can keep your home, car, and other personal belongings. If you are being harassed by creditors, you can stop them immediately (the automatic stay). A Chapter 7 case is usually filed and closed within approximately four months. In almost all cases, you do not have to attend a Court hearing or Court appearance (you must attend a meeting with your attorney and the Trustee).
In a Chapter 7 case, you can eliminate any balance due after a vehicle financing company repossesses your car or if a bank forecloses on your house. If you have cosigned a debt for someone else and they do not pay the debt, a Chapter 7 discharge can eliminate your liability or your obligation to pay the creditor. A Chapter 7 bankruptcy can immediately stop wage garnishments, a lawsuit or a frozen bank account.
A Chapter 7 bankruptcy may allow you to re-establish your credit rating by reducing or eliminating your debt. With almost all of our Chapter 7 clients, the debtor is able to re-establish they credit rating within one to two years after the discharge, and, if they wish, get a car loan or mortgage within one or two years after the case is closed. In fact, many people who file chapter 7 receive solicitations for unsecured credit within a few months of their discharge in bankruptcy. As will be explained in more detail, if you wish to re-establish your credit rating, you should accept some forms of unsecured debt so that you can build on to your credit history.
A:When someone files a Chapter 13 petition in bankruptcy, generally, their aim is to have the opportunity to repay some or all the debts in their name, in better terms, i.e. lower or no interest or to save their house from foreclosure or if they are unable to file a Chapter 7 due to their income or non-exempt assets.
Unlike Chapter 7 which involves liquidation of assets, this process involves restructuring debts which allows the Chapter 13 debtor to use whatever income they may have in the future to pay off some or all creditors. In a Chapter 13 case, you will propose either a three year or five year Chapter 13 plan.
In a Chapter 13 case, the Court approves a new payment plan for repayment of some or all of your debt. For example, if you own a home with a mortgage and you want to keep your home and you are behind in your mortgage payments or your home is in foreclosure (you have mortgage arrears) a Chapter 13 case will allow you the opportunity to pay back your arrears over a three or five year period. In other words, you can keep your home, pay back the late payments and continue to pay your regular mortgage payment throughout the life of the plan. This will stop the foreclosure An important criteria for a person to be able to file a Chapter 13 case that the individual must have a regular income.
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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
The information you obtain at this site is not, nor is it intended to be, legal advice. We are a Debt Relief Agency, We help people file Bankruptcy. You should consult an attorney for individual advice regarding your own situation.
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