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  Bankruptcy FAQ:

 

1.  How often can you file for bankruptcy?

 

-A Chapter 7 bankruptcy can be filed 8 years after a previous chapter 7 filing, or 6 years after a prior chapter 13 filing.

 

-A Chapter 13 can be filed 4 years after a prior Chapter 7 filing and 2 years after a prior Chapter 13 filing.

 

 

 

2.  Do you have to have a certain amount of debt to file?

 

-No. There is no amount of debt required to file bankruptcy.  There are options to avoid bankruptcy such as short sales, repayment plans, settlements, etc.  In some cases, a creditor may not be able to garnish you, and a bankruptcy is not needed.

 

 

 

3.  What happens if one spouse files for bankruptcy and not the other?

 

-If one spouse files bankruptcy, and the other spouse does not, the non-filing spouse can be responsible for the debts that were joint.

 

 

 

4.  Can I change from one chapter of bankruptcy to another?

 

-Generally, a debtor can convert their case one time to another chapter that they are eligible for.  However, there can be issues when this is done because some items acquired may be considered property of the estate.

 

 

 

5.  Does my divorce paperwork protect me from creditors even though my ex filed for bankruptcy?

 

-No. When you co-signed on the debt, that allowed the creditor to require the entire payment of that debt from you.  However, the divorce decree may give you a claim against your spouse.

 

 

 

6.  Can all debts be discharged in bankruptcy?

 

-No. Generally, the following cannot be discharged:

 

Debts for money, property, services, or an extension, renewal, or refinancing of credit which was obtained fraudulently, debts not listed in the initial list of debts or that the debtor waived being cancelled, debts owed to a spouse, former spouse, or child, for alimony, maintenance, or support of a spouse or child, with a separation agreement, divorce decree or other order of a court of record, debts owed for injury to another person or property owned by another, debts for government-sponsored educational loans, debts for death or personal injury caused by the debtor's drunk driving or from driving while under the influence, or debts incurred after a bankruptcy was filed.

 

 

 

7.  What can I keep if I file bankruptcy?

 

-Indiana has exemptions that allow an individual to keep certain kinds of property.  Some examples include:

 

-$17,600 equity per person on a primary residence

 

-$9,350.00 equity per person in personal property

 

-$350.00 per person in intangible personal property such as cash on hand or in the bank

 

-Interests in IRAs or pensions.

 

 

 

8.  How long does a bankruptcy stay on my record?

 

-A bankruptcy will stay on your credit report for 7-10 years.

 

 

 

9.  Can a creditor continue to call me after I've hired a bankruptcy attorney?

 

-Once the creditor is notified that you have retained counsel for a bankruptcy, the creditor should not be contacting you.  Also, once you file bankruptcy, the bankruptcy code requires that creditors must cease all collection efforts against you.  This is called the automatic stay.  If a creditor continues to attempt to collect the debt after you filed bankruptcy, you should immediately notify the creditor in writing that you have filed bankruptcy, provide them with either the case number and date of filing, or a copy of the petition.  If the creditor still continues to collect you, you may be entitled to file an adversary proceeding against them, and may receive money damages for their actions.

 

 

 

10.  What do my creditors get informed about when my bankruptcy is first filed?

 

-The bankruptcy court sends all listed creditors information including: the filing of the bankruptcy, the case number, the automatic stay, the trustee’s name, the date of the meeting of creditors, the deadline, if any, set for filing objections to the dismissal of debts, and where to file claims.

 

 

 

11.  What is a trustee?

 

-A trustee generally refers to the person who will appear at your meeting of creditors.  Their job is to administer the bankruptcy, and to get as much money as they can for the creditors.  If money is collected, they also distribute the money.  The trustee will receive documentation from your attorney.

 

-There are also U.S. Trustees.  They look to see if you are abusing the bankruptcy system.

 

 

 

12.  What happens at my meeting of creditors?

 

-You will be required to answer questions about why you filed bankruptcy, what you did with property, if you listed all your assets and debts, etc.  You will be required to be truthful, or your bankruptcy can be dismissed, or you can be charged with perjury.  Creditors can attend the meeting.  However, more often than not, creditors do not attend.

 

 

 

13.  What should I do if I forgot to include a debt on my bankruptcy petition?

 

-If you discover something is incorrect or missing on your petition, you can typically amend your schedules to correct it.

 

 

 

14.  What's a reaffirmation agreement?

 

-A reaffirmation agreement is where you voluntarily agree to pay off a debt that could have been discharged in the bankruptcy. If you do not sign a reaffirmation agreement, many creditors will cease reporting the debt to your credit bureau.

 

 

 

15.  What's the difference between secured and unsecured debt?

 

-Secured debt is a claim that's secured by real or personal property, such as a mortgage or car loan.  A court judgment becomes a lien against real property, and is considered a secured debt.  Some tax debts are also secured.

 

-Unsecured debts are not tied to any type of property, so a creditor does not have a claim to property.