FAQ’s Regarding Bankruptcy In these difficult times we are living in, millions of people across the country are dealing with a new financial reality. With unemployment rising, small businesses closing, and our government unable to agree on how to help, there are many people considering

How do I know if Bankruptcy is the best option for me?

Our first suggestion would be to call our office for a financial consultation! Bankruptcy is not for everyone, but is often the best choice if you feel trapped by your debts. There are many things to consider when deciding to file bankruptcy, such as whether your debts can be discharged (extinguished) in bankruptcy or whether you have assets that would be taken to pay your creditors.

Can bankruptcy stop my creditors from harassing me?

Yes. As soon as you file the paperwork with the bankruptcy court, a court order goes into place called the “automatic stay.” It stops your creditors from harassing you, taking further court action, garnishing your wages, and other collection actions.

Can I get rid of all my unsecured debt in bankruptcy?

Not all unsecured debts can be discharged in a bankruptcy. One of the biggest sources of debt for people in today’s economy, student loans, are also almost always non-dischargeable in bankruptcy. Only in very rare cases will the Bankruptcy Court discharge student loans. Other debts, such as certain back taxes, back child support or alimony, claims for back wages are considered “priority” debts.

I’ve fallen behind on my house. What are my options in bankruptcy?

Your options depend on whether you want to try and keep the home. If you want to move out and walk away, then you can file Chapter 7 to surrender the house and discharge the debt. If you want to save your home (which most people do!), then there is Chapter 13 bankruptcy. This is a personal reorganization where you propose a 60-month repayment plan that would include the back amounts owed on your house. At the end of the Chapter 13 Plan, the goal is to be current and in good- standing.

Will my credit be ruined if I file bankruptcy?

If you are behind on your debts, then that is already damaging your creditor. One of the goals of bankruptcy is to give people a “fresh start.” While your credit score may go down in the short-term, it should rebound and allow you to move forward with your life. If you think bankruptcy may be a good option for you, please give our office a call at (413) 732-6840!