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One important requirement for a Chapter 7 bankruptcy is that you do not have sufficient income to allow you to pay at least a portion of your debts. Making this determination is largely a mathematical calculation, and there is a form for making the calculation. If you have enough income, you will need to file under Chapter 13 instead of under Chapter 7.
Chapter 13 allows debtors a number of bankruptcy protections, but they must repay at least some of their debts under court supervision
Chapter 11 is usually more suited to people who are self-employed. This "reorganization" bankruptcy allows people to restructure their debts without losing personal or business assets
CAN MY BOSS FIRE ME FOR FILING BANKRUPTCY?
No. U.S.C. Sec. 525, prohibits any employer from discriminating against you because you filed bankruptcy.
WON’T USING A CREDIT COUNSELOR BE BETTER THAN FILING BANKRUPTCY ?
Be Careful. Using a Credit Counselor will more than likely cost you a lot more money and take you longer to rebuild your credit rating.
CAN I KEEP ANY CREDIT CARDS?
Unfortunately virtually all credit card companies will cancel your credit cards, this can even happen if you have a zero balance.
WILL I EVER GET A CREDIT CARD OR CREDIT AGAIN?
Yes. Some banks offer "secured" credit cards where you puts up a certain amount of money (i.e. $100 - $500) in an account at the bank to guarantee the payments will be made. Usually your charge amount is equal to what you have on deposit, until you build up your credit rating. Usually two years after a bankruptcy discharge, debtors may be eligible for mortgage loans on terms as good as those of others, with the same financial profile, who have not filed bankruptcy. Your bankruptcy filing will remain on your credit report for 10 years.
ARE THERE DEBTS THAT BANKRUPTCY WILL NOT WIPE OUT ?
Yes. While bankruptcy will wipe out most debts, it will not wipe out your obligation to pay;
Child support and alimony, including arrears;
Debts for personal injury or death caused by your drunk driving or possibly other acts
involving injury to another person or their property;
Traffic fines, court costs, criminal restitution;
Student loans – except in the most rarest of circumstances:
Debts involving fraud, and for certain goods or services obtained within 60 days of filing;
Usually debts owed under a divorce decree or settlement and:
Usually income tax debt.
It is important to note that, as with anything there are exceptions to all rules and regulations,
depending on the circumstances.
WILL BILL COLLECTORS AND CREDIT CARD COMPANIES STOP CALLING ME AND HARASSING ME?
Yes, they will! By law, all actions against a debtor must cease once the bankruptcy documents are filed. Unsecured Creditors such as credit card companies, utilities, hospitals, etc., cannot initiate or continue any lawsuits, wage garnishees, or even make telephone calls demanding payments. Secured creditors such as banks holding, for example, a lien on a car or a home, will be able to continue to take action if you cannot make payments.
WILL I LOSE EVERYTHING I OWN IF I FILE BANKRUPTCY?
NO ! It is true that when you file a bankruptcy, everything you own becomes the property of the U.S. Trustee / Bankruptcy Court, HOWEVER, the bankruptcy code contains many “exemptions”, that allows most people to keep everything they own, including their house, car, household furnishings, retirement accounts, etc. Of course, there are limits on values, but the vast majority of people can keep everything they own. If your home or vehicle is behind on payments, you may even be able to keep them, depending on the type of bankruptcy you file.
TYPES OF BANKRUPTCY
Chapter 7, is sometimes referred to as a straight bankruptcy, you either pay for or give up your property this is secured by debts, such as your car or your home. You surrender any nonexempt property in order to pay off as much of your other debt as possible. You keep all of your other exempt property and are forever released from any obligation to repay the remaining dischargeable debt.
In the vast majority of cases, the debtor has no assets that he would lose so Chapter 7 will give that person a relatively quick "fresh start", which is the main purpose of the Bankruptcy Law..