What is the difference between Chapter 7 and Chapter 13 bankruptcy?

Chapter 7 bankruptcy is commonly call "straight" bankruptcy or just "bankruptcy". In a Chapter 7 bankruptcy, the objective is to cancel or discharge all of your unsecured debt and thereby give a fresh start to a struggling debtor. In a Chapter 7 bankruptcy, a debtor must turn over any nonexempt property, if such exists, to the Trustee, who then liquidates the property for cash and uses the cash to pay the debtor's creditors. Once such is completed the debtor receives a discharge of the remainder of his/her unsecured debt. A Chapter 13 bankruptcy is commonly call a "reorganization". In this type of bankruptcy, a debtor attempts to repay his creditor some portion of what they may be owed over an extended period of time. Chapter 13 bankruptcy allows for the protection of certain assets and requires a steady income on which to base a repayment plan. Upon completion of the plan a debtor who has filed a Chapter 13 bankruptcy receives a discharge (similar to that in a Chapter 7 bankruptcy) of any remaining unpaid debts, not fully paid through the Chapter 13 repayment plan.

Will I have to go to bankruptcy court?

After filing a petition for bankruptcy, a meeting is set for the trustee to meet the debtor and ask questions of him/her. At this meeting the creditors may be present and may ask questions of the debtor, though most do not. Typically, the meeting lasts less than fifteen minutes and takes place in a office of the federal courts building of the city in which your bankruptcy was filed. The meetings are generally scheduled within 30 days of a Chapter 7 bankruptcy filing, and within 45 days of a Chapter 13 bankruptcy filing. Your attorney will be present at this meeting with you.

Do both my spouse and I have to file bankruptcy together? What if I want to file, but my spouse does not?

Debt is normally only apportioned to the party who signed the original document creating the debt. In some marriages, one spouse may have all the debt in his/her name and the other spouse may be relatively debt free (at least on paper). In that case, only the party in whose name the debt stands need file bankruptcy and the other spouse may remain outside the bankruptcy. In other cases, a spouse may wish to pay off the debts that are in their name and not join in the bankruptcy. That is not a problem, so long as the debts, on which the bankruptcy are filed, are not joint debts in both spouses' names. In that case the discharge of one spouse will not release the other of liability on the debt. It may then be wise to have both spouses join in the bankruptcy.

Does filing bankruptcy actually keep creditors from harassing me?

Immediately upon filing a petition for bankruptcy an implied court order becomes effective (known generally as an "automatic stay") which stops creditors from attempting to collect any outstanding debts you may owe them. This stay prevents phone calls, letters and lawsuits and remains in effect throughout the duration of the bankruptcy case unless lifted by the court for some reason. If a creditor violates the automatic stay they may be subject to severe penalties from the bankruptcy court and may be subject to violation of the state's fair debt collection practice laws.

What will it cost me to file for bankruptcy?

There is a court filing fee for bankruptcy, which is paid to the Federal Bankruptcy Clerk. Presently, that fee is $200.00 for Chapter 7 cases and $185.00 for Chapter 13 cases. During your consultation with your attorney, he/she will review all charges and how you are to pay the law office. Fees and payment arrangements, at the law office of Earp & Associates, P.C., are structured so that if you choose to file bankruptcy, you can afford to.

Are there any debts which are not dischargeable in Chapter 7 Bankruptcy?

Yes. The following is a brief and non exhaustive list of debts which usually cannot be discharged through a Chapter 7 bankruptcy:

1.	Child Support
2.	Alimony
3.	Spousal maintenance
4.	Some property settlement debts resulting from divorce
5.	Generally, student loans (although speaking to an attorney about these debts is highly recommended)
6.	Tax debts, and debts incurred to pay federal tax debts
7.	Secured debt, if the debtor wants to keep the property securing the debt
8.	Certain criminal fines and penalties
9.	Debts for personal injury or death caused by the debtor operating a motor vehicle while intoxicated
10.	Debts from obtaining money through fraud, misrepresentation, false pretenses (including debts for luxury goods and services and cash advances made within 60 days of the date the bankruptcy case is filed)
11.	Debts not listed on the bankruptcy forms, unless a creditor knew of the case in time to file a claim
12.	Debts for injury to another person, where the acts were intentional and malicious and creditor files a complaint in the case
13.	Others (see an attorney for a full list)

What is a "discharge" in a Chapter 7 bankruptcy case?

It is a court order from a United States District Court which cancels all the dischargeable debts of a debtor and orders the creditors to not attempt collection of the debts in any way. If a debt is discharged under such an order the debtor no longer is legally required to pay the debt.

How often can I file Chapter 7 Bankruptcy?

A Chapter 7 bankruptcy can be filed generally once every six years. However, if a debtor files a bankruptcy under any chapter of the Bankruptcy Code and subsequently dismisses it or chooses not to pursue it, the debtor must wait at least 180 days after the dismissal of the prior bankruptcy before they can file again.

Under what circumstances might I be denied a discharge in a Chapter 7 Bankruptcy case?

A person can be denied a discharge of their debts in a Chapter 7 bankruptcy case if they fall in any of the following categories:

1.	They have previously been granted a Chapter 7 discharge within the last six (6) years
2.	They have previously been granted a Chapter 13 discharge within the last six (6) years, unless they paid 70% or more of their unsecured claims in the Chapter 13 case
3.	They file a waiver of discharge and it is approved by the court
4.	They conceal, transfer or destroy their property with an intent to defraud their creditors or the trustee in the case
5.	They make false statements or claims in the case
6.	They withhold information from the trustee necessary for the administration of the bankruptcy estate
7.	They fail to make adequate explanation for discrepancies in assets and asset values
8.	They refuse to abide by the orders, rules and regulations of the bankruptcy court, in their own bankruptcy case or that of a relative, business associate, or corporation they are involved with

How long does a Chapter 7 bankruptcy take?

Typically between 4-6 months from the date of the filing of the bankruptcy petition.

What if there are debts I want to keep paying, or there is property I want to retain despite the bankruptcy?

This question is asked often in reference to home and vehicle debts and the answer is relatively simple: Just keep paying! Bankruptcy requires that all property be delivered to the trustee and all debts be listed on the schedules, including those you intend to keep paying. After filing bankruptcy, most creditors will allow a debtor to "reaffirm" their debt to that creditor (possibly with modified terms) and retain property securing that debt, generally so long as they are relatively current in their payments. Your attorney will review any such affirmation with you prior to your entering into such an agreement and give you its pros and cons.

What effect does bankruptcy have on my credit rating?

First off remember, if you are considering bankruptcy your credit rating is probably not spotless. Bankruptcy, bluntly, will not help it any. Your having filed bankruptcy will go on your credit history report for a period from seven to ten years. However, after your bankruptcy is completed, you should be financially able to begin the process of rebuilding your credit. The new freedom of being relatively debt free may enable you to make wiser future credit decisions which will ultimately benefit your credit rating in time. In that sense there is light at the end of the tunnel of a broken credit score.

What is required to be eligible to file a Chapter 13 bankruptcy?

A Chapter 13 bankruptcy requires certain criteria be met prior to a person being allowed to file. The following is a brief overview of some of the criteria:

1.	A regular and stable periodic income
2.	A portion of the income must be disposable, in other words, after all basic human needs are paid for there must be some funds left over to pay periodic payments to creditors
3.	Debts cannot exceed $871,550.00

How do I prepare a plan for Chapter 13 bankruptcy?

Essentially, the Chapter 13 plan is like a budget which outlines your income and expenditures, and payment on debts which you owe. After filling out a questionnaire, you and your attorney should be able to come up with a plan that all can live with. This plan must then be approved by the court and, in a limited sense, by your creditors.

How long do I pay under a Chapter 13 plan?

Typically, a Chapter 13 bankruptcy plan is three years in duration, however, depending on your debt situation it may be extended to up to five years.