Filing for bankruptcy doesn’t have to be difficult. It’s a good idea to have an attorney guide you through the process and to make sure you do things correctly. You will get all the answers to your major questions from a lawyer. Bankruptcy attorney Benjamin J. Ginter runs the Law Offices of Benjamin J. Ginter in Cranford, New Jersey. Here, he discusses what the basics of bankruptcy are and why you need an experienced lawyer.
1. What is bankruptcy?
Consumer bankruptcy allows people to either eliminate or wipe out most of their debt, in some circumstances, to repay their creditors under a court supervised repayment plan. The eventual goal of any type of bankruptcy filing is almost always to obtain a discharge from the court, which means that all the consumers’ debts (with some exceptions) which exist before the filing are eliminated.
2. Who can file for bankruptcy?
With few exceptions, any person or business owing money to a creditor can file for a bankruptcy petition.
3. What chapter of bankruptcy can you file for?
Consumers typically file Chapter 13 bankruptcy, where repayment is made to creditors; or a Chapter 7, where most debts are eliminated. For the majority of consumers, a Chapter 7 would be filed; usually a Chapter 13 is filed by those who face losing their home in a foreclosure.
4. Do you need an attorney to file for bankruptcy?
Some people do have a simple case that they could possibly do on their own. But it’s a good idea to have an attorney guide you through the process and make sure you do things correctly. A lawyer can guide you through the intricacies of the process and help you avoid the pitfalls. Although you may think your case is easy, if you file incorrectly, it can significantly delay your discharge, and in some cases, your case could be dismissed. Moreover, if you file for the wrong bankruptcy chapter, you could put yourself in jeopardy of losing assets, including your home.
5. How often can you file for bankruptcy?
A Chapter 7 bankruptcy can be filed every 8 years from a previous chapter 7 filing or 6 years from a prior chapter 13 filing. Chapter 13 can be filed 4 years from a prior Chapter 7 filing or 2 years from a prior Chapter 13 filing. Filing bankruptcy can adversely affect your ability to obtain future credit, rent housing and even negatively impact a job application, so it’s important to consider these things as you decide whether to file.
6. Can all types of debts be discharged?
No. The debts that cannot be discharged vary slightly between the different chapters of bankruptcy. Generally, student loans, recent income taxes, child support and other marital obligations, and items having to do with fraud are not dischargeable.
7. Will you lose your home if you file for bankruptcy?
It depends on different factors: where you live, how much equity you have in the property, how far you are behind in the mortgage payments, etc. If you have a home or own any kind of real estate, it’s more important than ever that you hire a bankruptcy attorney. Filing the wrong bankruptcy could jeopardize your home.
8. What can you keep, if anything, if you file for bankruptcy?
Exemptions allow an individual to exempt or keep certain kinds of property. Most people who wish to file bankruptcy are unlikely to have a great deal of money or property stashed away. It is likely that unless you own a valuable car that’s paid off, a house with a lot of equity, a valuable inheritance, or some other kind of unusually valuable property, you will be able to keep everything you own as “exempt.”
9. Can you do anything to remove a bankruptcy from your credit report?
No. Although at your option, you can file an explanation with the credit reporting agencies briefly describing the events resulting in your bankruptcy. If an account is reported inaccurately, you can request that the record be updated to reflect the actual situation.
10. Can you get credit cards after you file for bankruptcy?
Yes. You might even start receiving offers in the mail right after you file your case. However, these credit cards usually carry high interest rates and fees. They put money in your bank’s pocket, not in yours. If you want the convenience of a credit card, you can have one with a small limit.
11. Is filing for bankruptcy immoral or bad?
No, the bankruptcy law is in place because our system of law recognizes that your life and future should not be ruined because of some financial mistakes you’ve made. You should never feel ashamed or feel like a failure if you decide to file for bankruptcy. Hold your head up high and remember that bankruptcy can give you a fresh start.