Bankruptcy FAQ's

What is a chapter 7 bankruptcy?
A Chapter 7 bankruptcy allows a debtor to liquidate its assets whin it is decided that it is not able to pay the debt accrued. Once the company's assets have been sold and the funds have been distributed to creditors, it is free from liability.

Why should I file a chapter 7 bankruptcy?
Usually you would file chapter 7 bankruptcy if you have a large amount of unsecured debt such as medical expenses or credit card debt that you are no longer able to pay. In many cases unexpected medical expenses, loss of employment, or a divorce causes the debtor to get protection from his or her creditors by filing chapter 7 bankruptcy.

What is chapter 13 bankruptcy?
A chapter 13 bankruptcy makes you file a plan detailing how you will pay off some of your debts over a period of three to five years. Appart from making payments, a major difference with a chapter 13 bankruptcy is that it allows you to keep some valuable property like your home even if you are behind on payments or if you have equity in the property which not covered by your state or federal exemptions. Your payments on these types of secured debts will usually be your regular monthly payments plus an additional amount to get catch up.

Why should I file a chapter 13 bankruptcy?
Usually you would file chapter 13 if you have an asset or property not covered by an exemption and you would like to keep this property. If a you, the debtor, are behind on secured loan payments, a chapter 13 bankruptcy can allow you to catch up over time and still keep your property.

How often can I file bankruptcy?
A Chapter 7 bankruptcy can be filled again six years after the date of your last filing. A chapter 13 bankruptcy, however, can be filed anytime.

Will I be able to keep my home or car if I file bankruptcy?
As long as your equity in the property is fully exempt, you will not lose your home or car during your bankruptcy. You may still be able to keep your property even if your property is not fully exempt by filing a chapter 13 bankruptcy instead of a chapter 7 bankruptcy.

What debts will a bankruptcy not erase?
Any money owed for child support, alimony, fines, some taxes, debts not listed on your bankruptcy petition, loans you got by knowingly giving false information to a creditor, debts resulting from "willful and malicious" harm, student loans (unless the court decides that payment would be an undue hardship), mortgages and other liens which are not covered by the bankruptcy case.

Can I get a credit card after filing bankruptcy?
Yes, there are many options available. You might be able to keep the credit card you already have if the credit card company approves. You can also get secured credit card which is secured by your own bank account.