Legal Questions?

A. Bankruptcy is governed by federal law, and it provides relief from most debts.

A. There are two (2) principal types of consumer bankruptcy:

Chapter 7: This is often referred to as the "fresh start" bankruptcy. It discharges most unsecured debts. It also discharges secured debts if you choose to surrender the property securing the debt. (Example: car loans and home loans)

Chapter 13: This is most often used if your home loan or other secured debt is in arrears, or if your income is above average. To qualify for a chapter 13, among other requirements, you must have regular income. Chapter 13 provides for repayment of at least a portion of your debts through a monthly payment plan to the court trustee.

 A. The reason to file bankruptcy is to get a "discharge". A discharge is a court order wiping out certain debts. Some debts cannot be discharged. For example, you cannot discharge debts for:

• Most taxes
• Child support
• Alimony
• Student loans
• Court fines and criminal restitution
• Personal injury caused by driving drunk or while under the influence of drugs
• Debts obtained through fraud or deceit
• Debts not listed on the bankruptcy

A. Chapter 7: You can keep your vehicle provided that the vehicle is worth less than $7,500.00 or if it is financed, there is less than $7,500.00 in equity. Of course, your payments must be current in order to keep your vehicle.

You can keep your house as long as your payments are current and there is less than $35,000.00 in equity. If you have more equity or if your payments are delinquent, a chapter 13 may be necessary.

Also, clothing is exempt as well as most furniture, appliances, and retirement accounts.

Chapter 13: If you can meet all of the income and payment requirements of a chapter 13 plan, you maybe able to keep your home or vehicle even if the payments are delinquent at the time your petition is filed.

 A. No. A creditor cannot sue, cannot call you, and cannot even write you. After filing, the creditor may have no contact with you at all other than through this office.

 A. No. Only creditors are notified and only by mail.

A. A complete financial disclosure is required, that is, what you owe, own, earn, and spend. Your disclosure must be as accurate and complete as possible, especially since you are giving this information under oath. You must provide year-to-date income as well as your income for at least the previous two (2) years from all sources. You must list all current average monthly expenses.

 A. Yes. All debts must be disclosed, EVEN IF YOU WILL CONTINUE TO PAY THEM (for example house, vehicle, student loans, etc...).

A. If you want to keep your house or vehicle or other property securing a debt, you can agree with the creditor to continue payments for the debts secured by the property by signing a reaffirmation agreement.

Reaffirmation agreements are not required, and if you choose to surrender the property securing the debt, then that debt is discharged.

If you reaffirm debt and then fail to pay it, you owe the debt the same as if there were no bankruptcy.

The debt will not be discharged and the creditor can seize the property and even sue you personally.

A. For a Chapter 7, It depends upon the time of the year that you file and the amount of the refund.

If we are to protect your refund, YOU MUST LET US KNOW THE AMOUNT OF YOUR REFUND AND WHEN YOU RECEIVED IT OR EXPECT TO RECEIVE IT. Then we can discuss permissible uses of the money. YOU MAY NOT USE THE REFUND TO PAY DEBTS, especially to family members, and you may not donate the money to anyone.

DO NOT FILE ANY TYPE OF RAPID REFUND. If the check you are receiving is not from the U.S. Treasury, then you have made a loan. The result is that you may have to pay the loan and still lose your tax refund!