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    Contact: (646)770-4366

Bankrupcty Q&A

Questions About Bankruptcy?

1.) What is the difference between a chapter 7 and chapter 13 bankruptcy?

A chapter 7 bankruptcy filing is a "liquidation" bankruptcy that allows you to discharge your debts that are listed on your petition.  After filing, you will not be required to repay any of the listed debts with certain exceptions.  A chapter 13 bankruptcy filing,  requires you to enter into a repayment agreement in which you pay back a portion or the entire amount of what you owe under much more favorable terms and conditions.  Debtors can file a chapter 13, as opposed to a chapter 7, when they do not pass the means test or are attempting to keep their home and/or other property and repay any mortgage arrears.  The bankruptcy attorney will take your information and advise you of the best option for you going forward!

2.) Will I be required to appear before a judge?

No, if filing a Chapter 7 case, you will meet only with me (always) and the trustee assigned to your case at the Meeting of Creditors where he will ask you questions for a few minutes. I will prepare you for the types of questions beforehand and you be completely ready when you appear before the Trustee.

3.) Home Foreclosure--Can a bank still take my house?

When you file Bankruptcy, all creditors are subject to an "automatic stay" including actions such as foreclosures and sheriff's sales.  The stay prohibits creditors from taking any action to compel payment on the claim.  But, a creditor (bank) can still go into court (make a motion) and ask the bankruptcy judge for a "relief from stay".  If the motion is granted the creditor can proceed with court action to foreclose.  We can discuss home foreclosure in greater detail at the FREE consultation.

4.) Can I pick and choose which debts are to be part of my bankruptcy?

No, you must list all of your debts and assets in your bankruptcy petition. Debtors are not allowed to select which creditors they pay back. Under certain circumstances, you may voluntarily pay back a creditor, including family members, once the bankruptcy is discharged and closed.  However, as long as you list all of your creditors on your petition, you are under no legal obligation to do so.

5.) Can I change my Chapter 7 to a Chapter 13 and vice versa?

Yes, in most cases you are permitted to switch by making a "motion to convert."  Certainly, this would be appropriate if you can no longer afford your chapter 13 plan payments.  If so, you would want to convert your filing to a chapter 7 in order to discharge the debt. A trustee can also make the motion to convert to a Chapter 13 filing should he determine that you have money to pay back some of your debts-this should rarely occur as long as you have a bankruptcy attorney carefully review your situation. However, this is why it is absolutely necessary to disclose everything to your bankruptcy trustee.  There must be no surprises at the time of the Creditors Meeting.

6.) Do my spouse and I have to file jointly?

No, the decision to file individually or jointly depends on your specific circumstances.  situation.  Usually:

  1. If only one spouse owes all or most of the debt then only that spouse should file.
  2. If both spouses owe the debt and want to file a Chapter 7 then both can file.
  3. If you're trying to stop a foreclosure then only one spouse who is on the title to the home needs file a Chapter 13.

However, each situation requires careful consideration and should be assessed by consulting with a bankruptcy attorney.

7.) Will other people (friends, family) find out that I filed for bankruptcy?

It is a matter of public record when any bankruptcy is filed.  But,  usually only your creditors are notified that you filed. Others should not know unless you tell them or they do a search in the public court records.

8.) What does reaffirm mean?

This means you would become personally liable for a debt again even though you could discharge it in the bankruptcy filing. Sometimes you may choose to reaffirm a debt such as a car loan.  The bank may require you to do so or they can repossess your car, even if you are current with the payments. Bankruptcy may be considered a default under your loan terms and some financing companies may repossess the vehicle.


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