Answers to Your Most Frequently Asked Questions
You're probably full of questions right now—and that's okay, because we have answers! Check out some of the questions we hear the most about bankruptcy, divorce, and child custody from clients just like you.
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How Long Will I Be In Bankruptcy if I file a Chapter 7?
Chapter 7 Bankruptcy usually takes about 4-5 months, although your creditors cannot attempt to collect on the debts once your case is filed. Once your case is filed, the Bankruptcy Court sends out a notice to all your creditors with certain dates on it. One is the date for your Meeting of Creditors, normally referred to as a 341 hearing. A second date listed is the date for objections to discharge date. This is a date by which your creditors and the the trustees must decide if there is an issue with you receiving a discharge. If no objects to your discharge, the Court will normally send it out shortly after that date. The Court may hold the discharge if there are matters pending in your case such as a reaffirmation hearing.
One requirement to receive a discharge in a Chapter 7 bankruptcy is completing a Personal Financial Management Workshop and filing the certificate of completion with the Court. Another requirement, and one of the main reasons for people not receiving a discharge, is cooperating with the Chapter 7 Trustee's requests for documents or for turnover of property.
Don't lose your discharge because you don't understand what is required. Let us guide you through the process. Contact us today or call us at 757-320-2010.
Can you stop a garnishment in a Chapter 7 bankruptcy?
Yes. When we file a Chapter 7 bankruptcy, any garnishments must be stopped. In addition, we may be able to get back the money that has been withheld from your wages or bank account. Garnishments normally run for 90 to 180 days and at the end of the garnishment period, there is a hearing. If your case is filed before that hearing date, we can normally recover any money that has been withheld during that garnishment period. However, these funds must be protected for you and must come out of your wildcard exemptions which has a lifetime limit on it. For more on protecting assets, check out my article on "Keeping your things in Bankruptcy".
It is important that you meet with an experienced bankruptcy attorney if you are currently being garnished. If not handled correctly, you could lose hundreds of dollars. Contact me or call my office today at 320-2010. I will meet with you and discuss how to stop the garnishment and recover the money for you.
Can I sell or refinance my home in after filing a Chapter 7 bankruptcy?
When you file a chapter 7 bankruptcy, everything you own becomes part of what is called "the bankruptcy estate". The Chapter 7 trustee, who is appointed by the court to review your case, controls the bankruptcy estate. Until the trustee releases his or her interest in an asset, you may not do anything with the asset. This includes selling an asset or borrowing money against the asset such as refinancing a house. There are two ways that the trustee can release the interest in an asset. One is by formally abandoning their interest in the asset. This can be done at the Meeting of Creditors or later through the court. The trustee may also issue a no asset report. This tells the Court and everyone else involved in the case that the trustee has reviewed the case and does not believe that there is anything the trustee wants to take to recover money for the asset. Until the trustee has taken one of these actions, you may not sell anything you own or refinance a loan.
For more information on the trustee's role in a Chapter 7 bankruptcy, read my article on the role of a Chapter 7 trustee.
If you are considering filing a Chapter 7 bankruptcy, do not attempt to do this on your own. Contact me or call me today at 757-320-2010 to schedule a free consultation on how bankruptcy can help you.
How does bankruptcy affect my credit?
A Chapter 7 Bankruptcy will remain on your credit report for up to 10 years. However, you can immediately begin re-establishing your credit after your case is filed. Due to the fact that you are wiping out your debts and cannot file again for 4 to 8 years, credit companies want to be first in line to extend credit to you again. By not filing Bankruptcy, your credit report may show negative information for 7 years from the time you become current. By filing a Chapter 7 bankruptcy, negative reporting stops immediately. This allows you to begin re-establishing credit faster by keeping house, auto or other payments current. One of the best ways to rebuild your credit is by making payments on Student loans.
If you have filed a Chapter 7 bankruptcy, you should check your credit report after your case is discharged to insure that everything has been corrected on the credit report. After that you should check your credit report once a year to make sure that you are getting positive reporting. Normally you should have your credit score over 620 (acceptable credit) within one year after your discharge and you may be able to get your score over 700 within two years after your bankruptcy.
What kinds of debts does Bankruptcy eliminate?
There are some debts that cannot be eliminated or discharged in bankruptcy. For example, child support and spousal support obligations cannot be eliminated nor can arrears on those payments be discharged. Taxes for the most recent three tax years cannot be discharged. Student loans cannot be discharged except under extreme circumstances.
If you have liens on real estate or a vehicle, you will have to deal with those liens. If you have purchased furniture and financed it, you may also need to deal with that debt to keep the furniture.
You should discuss your specific debts with an experienced bankruptcy attorney before you attempt to file a bankruptcy to make sure that you know what debts will not be discharged.
Contact Hampton Roads Legal Services at 757-320-2010 to schedule a free consultation with our exprienced attorney.
Do I have to list all my creditors in a Chapter 7 bankruptcy?
Yes. You must list all creditors when you file a Chapter 7 bankruptcy. There are no exceptions. You must list everyone that you owe money to including taxes and student loans. However if you have a $0 balance on an account, you don't owe that creditor money and they don't have to be listed. If you no longer owe an individual or company money, they are not a creditor. Our office will assist you in obtaining a credit report so that you are certain to list all your creditors. It is important that you review your credit report carefully and list any additional creditors that do not appear on the credit report. There are many companies that do not report to credit reporting agencies, such as medical providers, taxes and pay day loans.
In a Chapter 7 bankruptcy, if you leave off a creditor, like a medical bill, they will still be included in your bankruptcy. However, since they did not receive notification of the bankruptcy, they may still try to collect from you. It is very important to list everyone that you think you owe money to so that you don't have problems later with a creditor trying to collect because they were not notified about your bankruptcy.
Will all of my debts be forgiven if I file a Chapter 7 bankruptcy?
Many people mistakenly believe that filing a Chapter 7 bankruptcy will “wipe the slate clean" and free them of all their debts, but that is not necessarily true. There are some debts that will still be owed after a Chapter 7 bankruptcy. Even if you file, you will still need to pay your child and spousal support and any arrears on the support (late fees, etc), most back taxes, student loans, debts that you agreed to pay in a Separation Agreement or were ordered to pay in a Divorce Decree or criminal fines or restitution payments. In addition, a creditor may seek to have a debt declared non-dischargeable in your bankruptcy under certain circumstances. If you are not clear on which debts will and will not be discharged, speak with an attorney or reputable credit counselor before filing.
If you have debts that may not be discharged, you may have other options. Contact us or call us today at 757-340-3100 to schedule a free no obligation consultation. We will discuss your debts with you and advise you of the best course of action for you based on the debts you have.
What should I know about the bankruptcy hearing?
After your bankruptcy is filed with the Court, a date and time for the Meeting of Creditors, commonly called the 341 hearing, will be set. You must appear at this hearing. If you file a joint case with your spouse, you both must attend. Failing to show up or properly prepare for your hearing will not buy you more time. If you are not present at the time of your hearing, your case will be dismissed, and you will have to either re-file at a future date or seek the Court's permission to have your case reinstated.
If you have filed your case without the assistance of a bankruptcy attorney, you will receive information about documents that must be provided to the trustee assigned to your case before your hearing. You must provide all the requested documents well in advance of your hearing. If you fail to provide the required documents, you will either have to attend a second hearing or your case could be dismissed. If you are represented by an attorney, they will normally have collected these documents or notified you of any additional documents that are required.
You must go through security to enter the Federal Building in Norfolk. If your hearing is there, it is very important to arrive at least 30 minutes before the hearing time to allow sufficient time to get through security. You must bring a valid government issued photo ID to enter the Federal Building. If your hearing is in Newport News, you do not have to go through security to enter the hearing room.
You must also provide a photo ID at the hearing and proof of your social security number. Valid documents to prove your social security number are: Original Social Security Card, Medicaid or Medicare card with your full Social Security Number on it, a W2 or 1099 or a tax transcript from the IRS. A copy of your tax return is not acceptable. Be sure that that the document you want to use has your full Social Security Number on it. Many documents only list the last four of your number.
If you have any questions about your hearing, make sure to contact the paralegal assigned to your case. If you have tried to file without an attorney and you are struggling with how to handle your case, please call our office and ask about your options, and be sure to read Attorney Pfeiffer's book on the subject of filing without an attorney! You can request a copy in the link to the left of this page.