Frequently Asked Questions
Licata Bankruptcy Firm PC receives many similar questions from our clients. While the answers to these questions usually rely on each person’s unique situation, there are some questions that can be applied to every situation in a similar manner. Keep reading to find the answers to these questions.
Q:What are the differences between Chapter 7 & Chapter 13 bankruptcy?
A:The goal of both Chapter 7 and Chapter 13 bankruptcy is a discharge of debts. A bankruptcy discharge means you are no longer liable for repaying the debt. The main differences are the eligibility requirements, the length of time the types of bankruptcy take, whether you need to repay some or all of your debts, and how much of your property you can keep. In Chapter 7 bankruptcy, you do not need to repay your debts, whereas in Chapter 13 bankruptcy, you will have a structured repayment plan with the bankruptcy court to repay all or a portion of your debts.
Repaying your debts in Chapter 13 occurs over a 3-to-5-year period, and you must have income sufficient to make full timely payments. You will not receive a discharge until you complete your plan. You will not lose your property in a Chapter 13 bankruptcy, if your plan is structured correctly. A Chapter 13 bankruptcy attorney will be able to structure your plan to keep the property that is important to you.
In contrast, in a Chapter 7 bankruptcy, a trustee can take your property if it is not properly exempt in your bankruptcy schedules. The Trustee will sell that property and use the funds to repay your creditors to the extent possible. Exemptions vary from state to state, but typically you can keep some or all the equity in your home, car, and personal property. Only those who pass a "means test" can file Chapter 7 bankruptcy. Assuming you pass the means test and include all your debts in your paperwork, your debts are likely to be discharged within 4 to 6 months.
Q:What is a Chapter 7 bankruptcy?
A:Chapter 7 is a liquidation bankruptcy that wipes out most of your general unsecured debts such as credit cards and medical bills without the need to pay back balances through a repayment plan. Often referred to as a clean slate, the Chapter 7 bankruptcy is designed to eliminate debt. It is important to fully understand the bankruptcy exemptions in your state to ensure you don’t risk losing property that is important to you like a vehicle or a home.
Q:What is a Chapter 13 bankruptcy?
A:A Chapter 13 Bankruptcy enables individuals with regular income to structure a plan to repay all or part of their debts. Under this chapter, you get legal protection from collections, repossessions, and foreclosure while paying into a repayment plan with installments to creditors over a 3-to-5-year period.
If the debtor's current monthly income is less than the applicable state median, the plan can be for three years. If the debtor's current monthly income is greater than the applicable state median, the plan will generally be 5 years.
Q:How do I file a bankruptcy?
A:Filing a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy will require a certain level of knowledge regarding how to properly prepare the full bankruptcy petition, schedules, and if applicable the Chapter 13 plan. The majority of people who research online "How To File Bankruptcy in Springfield Missouri" end up using a qualified bankruptcy attorney to assist them with the bankruptcy process. This process will include the attorney preparing your bankruptcy petition and schedules and filing them with the court as well as providing all the other necessary documents such as credit counseling, pay devices, necessary affidavits etc. Your attorney will assist you with every step in the bankruptcy process ensuring you receive your bankruptcy discharge.
Q:How do I file a bankruptcy without a lawyer?
A:Bankruptcy laws are always evolving and knowing how to properly protect your assets while getting the full benefit of a bankruptcy can become confusing and stressful very quickly. As with any area of law individuals have the right to represent themselves in their case. This is called a pro se bankruptcy filing. Filing pro se means you are filing a bankruptcy without the representation of a bankruptcy attorney. You will be required to meet legal requirements to ensure you receive a bankruptcy discharge. In addition to the proper preparation and filing of your case you will be required to represent yourself at the Meeting of Creditors with the assigned bankruptcy Trustee as well as any potential hearings with the assigned bankruptcy judge. Anyone attempting to file a pro se case should make sure they are getting their forms and instruction from a reliable source.
Q:What happens when you file bankruptcy?
A:When you file a bankruptcy the first thing that happens is the automatic stay. This is designed to provide legal protection from collections. Basically, this stay keeps creditors from collecting on the debt. The automatic stay will stop wage garnishments, foreclosures & repossessions. Once your case is filed a date will be set for your Meeting of Creditors or 341 meeting. This is a court held meeting between you, your assigned bankruptcy trustee, and any creditors that choose to attend. If you are represented by an attorney, they should be in attendance with you as well. You will be asked questions regarding your specific financial situation and your decision to file bankruptcy. Once this meeting is concluded you will be on your way to a bankruptcy discharge.