Frequently Asked Questions
Get answers to common questions about bankruptcy, the filing process, and how we can help you achieve financial freedom.
1. What is bankruptcy and when should I consider filing?
Bankruptcy is a legal process that helps individuals and businesses eliminate or repay debts under the protection of the federal bankruptcy court. You should consider filing if you're overwhelmed by debt, facing foreclosure, wage garnishment, or creditor harassment, and cannot see a way to pay off your debts within a reasonable time.
2. What's the difference between Chapter 7 and Chapter 13 bankruptcy?
Chapter 7 bankruptcy, also known as "liquidation bankruptcy," discharges most unsecured debts quickly (typically 3-4 months) but may require selling non-exempt assets. Chapter 13 bankruptcy, or "reorganization bankruptcy," allows you to keep your assets and repay debts over 3-5 years through a court-approved payment plan. The best option depends on your income, assets, and financial goals.
3. Will I lose all my property if I file for bankruptcy?
Not necessarily. Bankruptcy exemptions protect many of your assets, including your home (up to certain equity limits), vehicle, household goods, retirement accounts, and personal property. In Chapter 13, you can keep all your property while repaying debts through a payment plan. Our attorneys will help you understand which exemptions apply to your situation.
4. How long does the bankruptcy process take?
Chapter 7 bankruptcy typically takes 3-4 months from filing to discharge. Chapter 13 bankruptcy requires a 3-5 year repayment plan before receiving a discharge. The exact timeline depends on your specific case, court schedules, and whether any complications arise. We'll guide you through each step and keep you informed of timelines.
5. Will bankruptcy stop creditor calls and collection actions?
Yes. Once you file for bankruptcy, an automatic stay immediately stops most collection actions, including phone calls, lawsuits, wage garnishments, foreclosures, and repossessions. Creditors must go through the bankruptcy court to collect debts, giving you immediate relief from collection harassment.
6. How much does it cost to file for bankruptcy?
Bankruptcy costs include court filing fees (currently $338 for Chapter 7 and $313 for Chapter 13) and attorney fees, which vary based on case complexity. We offer flexible payment plans and will discuss all costs upfront during your free consultation. Many clients find that the cost of bankruptcy is far less than continuing to struggle with overwhelming debt.
7. Will bankruptcy ruin my credit forever?
No. While bankruptcy will appear on your credit report for 7-10 years, many people start rebuilding credit within months of filing. You can begin improving your credit score by making timely payments on secured credit cards, auto loans, and other debts. Many clients see their credit scores improve significantly within 2-3 years after bankruptcy discharge.
8. Can I file for bankruptcy if I'm married?
Yes. You can file individually or jointly with your spouse. Filing jointly may be more cost-effective and can protect both spouses from joint debts. However, if only one spouse has significant debt, individual filing might be the better option. We'll help you determine the best approach for your situation.
9. What debts can be discharged in bankruptcy?
Most unsecured debts can be discharged, including credit card debt, medical bills, personal loans, utility bills, and some tax debts. However, certain debts cannot be discharged, such as student loans (in most cases), recent tax debts, child support, alimony, and debts from fraud. We'll review your debts and explain which can be eliminated.
10. Do I need an attorney to file for bankruptcy?
While you can file pro se (without an attorney), bankruptcy law is complex and mistakes can be costly. An experienced bankruptcy attorney ensures your paperwork is filed correctly, helps you maximize exemptions, protects your rights, and guides you through court proceedings. Having professional representation significantly increases your chances of a successful outcome.
11. How do I get started with First Rate Bankruptcy Attorneys?
Getting started is easy. Simply call us for a free consultation where we'll review your financial situation, discuss your options, and answer all your questions. We'll help you understand whether bankruptcy is right for you and, if so, which chapter best fits your needs. There's no obligation, and all consultations are confidential.
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