Bankruptcy FAQs: Providing Thorough And Simple Answers
Financial troubles can hit you and your family when you least expect it. A life-threatening illness, loss of a job, divorce along with poor money management can lead many people down the path of extreme debt and bankruptcy. Now you have questions as to what path to take. Is bankruptcy an option?
Frances Hoit Hollinger, LLC, in Mobile, Alabama, is an experienced law firm that aggressively fights for the rights of our clients. Founding attorney Frances H. Hollinger has been practicing law for nearly 20 years, providing personalized service and sought-after advice. Here are some answers to frequently asked questions (FAQs) that we get from clients:
Q: What are the differences of Chapter 7 and Chapter 13 bankruptcies?
A: Chapter 7 is a straight-ahead bankruptcy that requires the filer to sell most of his or her assets to pay off creditors. This path allows you to keep some of your income as well as property. In a Chapter 7, you may lose your home and your car. The Chapter 13 route involves reorganizing your assets as you make monthly payments to a trustee, who then pays off the creditors.
Q: Do I have to report all my assets?
A: Yes, you must do so. If you don’t, you could face incarceration and fines.
Q: Will I lose my house in bankruptcy?
A: You will likely keep your home, but not always. If you have kept up with your mortgage payments, you are more likely to keep your home when filing for Chapter 7 bankruptcy. However, if you are behind in your payments, you may lose your home. In a Chapter 13 filing, the situation is different. By filing for Chapter 13, you will be collaborating with a bankruptcy trustee in creating a repayment plan. As part of this plan, you must keep up with the court-required payments to the trustee as well as stay current with your mortgage payments. In keeping up with the payment plan, you should eventually recover from bankruptcy and keep your house. On the other hand, you can lose your home if you fall behind on the mortgage or trustee payments.
Q: Can I keep my car if I have filed for bankruptcy?
A: Usually you can. A major factor, though, is that you must remain current with car loan payments. If you have filed for Chapter 7, you must enroll in a reaffirmation agreement with your car’s lender. This agreement allows you to enter into a contract with the lender in order to take the car loan out of the bankruptcy process. In order to keep the car, you must continue to make payments. However, if you default on the loan, the lender can repossess your car.
In a Chapter 13 scenario, you can keep your car as long as you continue to make payments. If you own your car and have completed all payments, you need to ensure that you protect the vehicle from the bankruptcy trustee in Chapter 13 filings.
Q: Will filing for bankruptcy ruin my credit forever?
A: Not forever, but a bankruptcy will be on your record for a few years. If you file for Chapter 7, it will remain on your credit record for up to 10 years. In Chapter 13, where you are reorganizing your finances and making regular payments to a trustee, a bankruptcy may stay on your credit record for up to seven years.
Q: Can a creditor keep calling me at work?
A: No. While debt collectors can by persistent, annoying and aggressive, they are breaking the law when they contact you at work. The Fair Debt Collection Practices Act (FDCPA) makes it illegal for creditors to contact you at work, contact your employer, contact your family or make repeated attempts to reach you. It also is against the law for them to threaten you with arrest and loss of welfare benefits and child custody.
Remember that a skilled bankruptcy attorney will help you determine which route is best for you. Our attorneys will provide top-notch insight and guide you in your quest to get out of debt.
Contact An Experienced Bankruptcy Attorney
If you face financial difficulties and want to get out of debt, Frances Hoit Hollinger, LLC, in Mobile, Alabama, can guide you toward financial recovery. She and her team will provide you with one-on-one attention and design a bankruptcy plan to help. If you have questions, please contact her online or by calling 251-432-8878.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.