Duvall Law Office P.L.L.C.

FREQUENTLY ASKED QUESTIONS

BANKRUPTCY:

What can bankruptcy do for me?

Bankruptcy may make it possible for you to:

•  Eliminate the legal obligation to pay most or all of your debts.  This is called “Discharge”of debts.  It is designed to give you a “fresh start” financially.
• Stop foreclosure on your house/mobile home and allow you an opportunity to catch up on missed payments (it does not, however, automatically eliminate mortgages or other liens on your property without payment).
• Prevent repossessions of vehicles and other property, or force a creditor to return property even if it has been repossessed.
• Stop wage garnishment, debt collection harassment and similar acts of collection.   Restore or prevent termination of utility service.
• Allow you to challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more than you really owe.

Will I Have To Go To Court?

In most cases (Chapter 13 & 7), you will only have to make one appearance.  This is called a §341 First Meeting of Creditors.  It does not take place in a Courtroom, nor is there a Judge present.  This meeting is presided over by your Bankruptcy Trustee who is assigned your case.  This is an opportunity for your creditors to appear and ask you questions under oath.  Most of the time these meetings are very brief.  But this is a mandatory appearance.  Failure to attend will result in your case being dismissed. Occasionally, if complications arise, you may have to appear before a Judge at a Hearing.

Will Bankruptcy Affect My Credit?            

There is no clear answer to this question. Unfortunately if you are behind on your bills, your credit may already be damaged.  Bankruptcy will probably not make things worse in this situation.  The fact that you filed , can appear on your credit report for seven (7) years for a Chapter 13, and ten (10) years for a Chapter 7.  But since bankruptcy wipes out some of your old debts, you are likely to be in a better position to pay your current bills and you may be able to obtain new credit.

Can I Own Anything After Bankruptcy?    

YES!  Many people believe that you cannot own  property for a period of time after filing bankruptcy.  This is not true.  You can keep your exempt property and almost anything you obtain after the bankruptcy is filed.  You do have to remain current on your secured obligations.  However, if you receive an inheritance, property or injury settlement or life insurance benefit, to name a few, after filing, the money or property may have to be paid to your creditors if it is non-exempt.

Will Bankruptcy Wipe Out All My Debts?

Bankruptcy will not wipe out your secured debts that you seek to keep. It will also not discharge:

• Child Support, alimony, fines, some student loans and some taxes.
• Debts not listed on your bankruptcy petition.
• Some charges made withing 60 days of filing.
• Debts incurred by embezzlement.
• Debts incurred by Driving Under the Influence.
• Some debts to be paid pursuant to a divorce decree
• Court Ordered restitution.
• Home Owner Association Fees.
• Debts incurred through fraud, false pretenses, credit “binges” prior to filing bankruptcy.
• Debts incurred through Willful Injury.

What Property Is Protected In Bankruptcy?

 As stated previously, certain property equity is protected under State law.  This means the property is “exempt”.  Some of these items and their exempt dollar amounts are:

•  Homestead in Residence:         $150,000.00  *One claimed exemption for a couple

Each spouse can claim the dollar amount of the following:

• Certain Household Goods*:       $4,000.00  (Kitchen table/Dining table w/ 4 chairs; couch; living room   chair; 3 end tables; 3 lamps; rug; 2 beds; dresser; family pictures; TV; stereo; alarm clock; oven; refridgerator; washer; dryer; and vacuum cleaner)
• Clothing:                                             $500.00
• Musical Instruments:                    $250.00
• Domestic Pets:                                  $500.00
• Engagement/Wedding Ring:       $1,000.00
• Watch                                                   $100.00
• Typewriter, Bicycle, Firearms: $500.00
• Motor Vehicle:                                 $5,000.00 ($10,000.00 if handicapped)
• Life Insurance Proceeds:             $0.00
• Cash Value of Life Ins.:                 $25,000.00
• One Bank Account:                         $150.00
• Certain Pensions & 401K:            $Unlimited
• Prepaid Rent/ Security Dep.:     $1,000.00
• Net Disposable Earnings:             75%
• Tools of Debtor’s Trade:               $2,500.00
• Worker’s Comp. Claim:                  Unlimited

This is an non-exclusive list.  There are other exemptions.