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Bankruptcy FAQ

Who Can File For Bankruptcy?

Anyone that has been affected negatively by the economy, medical illnesses, and gaps in employment. The filing requirements vary depending on the chapter. A Vannova Legal bankruptcy attorney will review your particular situation and help you understand whether bankruptcy is right for you, and if so, which chapter is most appropriate.

What Can Bankruptcy Do For Me?

Bankruptcy makes it possible to eliminate debts, stop foreclosure, repossession, wage garnishment and creditor harassment.

What bankruptcy Type is right for me?

A Vannova Legal bankruptcy attorney will review your particular situation and help you understand whether bankruptcy is right for you, and if so, which chapter is most appropriate.

Is a Chapter 7 Bankruptcy Right For Me?

In a Chapter 7 bankruptcy case, the filer is seeking to discharge, or eliminate all debts. Most of the filers property will be exempt. A trustee is appointed in a Chapter 7 case and will sell all of your non-exempt, luxury property to pay back creditors. Any debt that is not paid back through this process is typically discharged. Chapter 7 Bankruptcy is right for most people, however, it is not right for everyone and not all individuals qualify. A Vannova Legal bankruptcy attorney will review your particular situation and help you understand whether Chapter 7 Bankruptcy is right for you.

Is a Chapter 13 Right For Me?

In a Chapter 13 bankruptcy case the filer must have disposable income, that is, income that exceeds your essential living expenses. This disposable income is used as the basis for a Chapter 13 Plan where you will pay off some or all of your past due debts over three to five years. In a Chapter 13 you are also allowed to keep valuable property such as your home, car, ATV, and other luxury items. A Vannova Legal Bankruptcy Attorney will review your particular situation and help you understand whether Chapter 13 Bankruptcy is right for you.

Is a Chapter 11 Right For Me?

A Chapter 11 bankruptcy is available to a business or individuals who have substantial debts or complex cases and do not qualify for a chapter 13 bankruptcy. A Chapter 11 usually results in reorganization of the debtor’s business or personal assets and debts. A Vannova Legal Bankruptcy Attorney will review your particular situation and help you understand whether Chapter 11 Bankruptcy is right for you.

Can I Be Discriminated Against For Filing Bankruptcy?

11 U.S.C. sec. 525 prohibits governmental units and private employers from discriminating against you because you filed a bankruptcy or because you failed to pay a debt that was discharged in bankruptcy.

Will a Bankrupcy Wipe Out All of My Debts?

Yes, with some exceptions. Bankruptcy will not wipe out:

  • Money owed for child support or alimony, fines, and some taxes
  • Debts not listed on your bankruptcy petition
  • Loans you got with the intent to include in the bankruptcy and knowingly giving false information to a creditor, who reasonably relied on it in making you the loan
  • Debts resulting from "willful and malicious" harm
  • Student loans owed to a school or government body
  • Mortgages and other liens which are not paid in the bankruptcy case (but bankruptcy will wipe out your obligation to pay any additional money if the property is sold by the creditor).

Will Filing Hurt My Credit?

The law states that a bankruptcy, either Chapter 7 or 13, can be listed on your credit report for up to 10 years. However, many Credit Bureaus list a Chapter 13 for only 7 years. Either way, a bankruptcy will negatively affect your credit. However, if you are considering bankruptcy, your credit is probably poor or about to become so. Since bankruptcy wipes out your old debts, you are likely to be in a better position to pay your current bills, and you may be able to build new credit. Many filers are able to buy a house a few years after filing for bankruptcy.

How Do I Rebuild My Credit After Filing for Bankruptcy?

You can begin to reestablish your credit immediately after your bankruptcy discharge. Lenders will consider many factors while determining whether or not to extend your credit, but the most important is usually your debt-to-income ratio. Depending on the credit scoring model used, your credit score can actually improve upon the filing of a bankruptcy because of the elimination of debt.

Can I Get a Credit Card After Filing For Bankruptcy?

Yes, there are several options available. You can use a bank or debit card to perform activities for which you normally would use a credit card. You also may be able to keep the credit card you already have if the creditor grants approval. If these options do not work you can obtain secured credit card which is backed by your own bank account.

Who Will Know About My Bankruptcy?

Parties that receive notice of a bankruptcy are your creditors, the Bankruptcy Court, the IRS and the Arizona & Utah Department of Revenue. Bankruptcy is a public record, so anyone who wants to try to find out about your bankruptcy could find out about it. Many people believe that notices of all bankruptcies are printed in the newspapers, but this is not true.

Can Bankruptcy Help to Get My Drivers License Back?

If you have lost your license because you couldn’t pay court-ordered damages caused in an accident bankruptcy will allow you to get your license back.

What Does it Cost to File Bankruptcy?

At Vannova Legal, we offer the lowest pricing for bankruptcy services in the area and will beat any competing law firm’s written offer. Our service pricing is based on your personal circumstances, not a one-size-fits-all. We know money is tight and we are happy to work with you and offer installments payment plans to open your file in our office.

I Have Filed For Bankruptcy in the Past, When Can I File Again?

If you previously filed a Chapter 7 bankruptcy and received a discharge, you need to wait four years from the original filing date to be able to file a Chapter 13, and eight years to file another Chapter 7.

Will I Lose My Tax Refund?

In a Chapter 7 bankruptcy, you will turn over a pro-rated amount of your refund to the trustee for distribution to your creditors. You are entitled to retain a portion of your refund depending on when you file your bankruptcy. A Vannova Legal Bankruptcy attorney will consult with you on your tax refund requirements before you file.

Can I File Without My Spouse?

Yes. You can file a joint case which may be the best choice if each has debts or there are joint debts. However, you can also file alone without harming your spouse’s credit. Vannova Legal Bankruptcy Attorneys will consult with you to determine who should file and when to receive the best outcome for your situation.

Will Affect My Non Filing Spouse?

No. Your spouse’s credit will not be harmed, their personal debts will not be included as a dischargeable debt, and your spouse will not be required to make any appearances, sign any documents, or otherwise be involved in the case.

If I am Going Through A Divorce how Will My Ex-Spouse Filing Bankruptcy Affect Our Divorce Settlement?

Alimony, maintenance, and/or support are protected from discharge. Divorce decrees and separation agreements are covered by 11 U.S.C. Section 523(a)(15). This section states that these debts are not dischargeable unless:

(A) the debtor does not have the ability to pay such debt from income or property of the debtor not reasonably necessary to be expended for the maintenance or support of the debtor or a dependent of the debtor and, if the debtor is engaged in a business, for the payment of expenditures necessary for the continuation, preservation, and operation of such business;

(B) discharging such debt would result in a benefit to the debtor that outweighs the detrimental consequences to a spouse, former spouse, or child of the debtor.

What If I am a Cosigner on Debt?

If you cosigned on a debt with someone, your liability on that debt will be wiped out by the bankruptcy. This means the co-signer will be the only one liable for the debt and the creditor can only collect from the co-signer.

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