Frequently asked Bankruptcy Questions

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How much does bankruptcy cost?

 

In a Chapter 13 bankruptcy, if you have regular income from employment or another source, you don't have to pay any fees up front. We get paid through the Chapter 13 plan after the plan is confirmed. I prefer that my clients pay the filing fee (the fee the court charges to file your case) up front and that fee is $313.00. But if you can't do that, you can pay the filing fee in installments. In Chapter 7 cases, I like to quote a fee after hearing about the case. In simple cases, I want to charge a simple, low fee. I charge more the more complex your case is. However, I will work with you to make sure that bankruptcy is an affordable option for you and we can set up a payment schedule. The filing fee (paid to the court) in Chapter 7 cases is $338.00.​  The other costs you will have will be the CIN Legal Data Services Credit Report which is $37.00 for a single and $74.00 for a joint report and your pre-petition credit counseling and post-petition financial education courses which typically cost a total of $35.00.

 

If I can't pay my bills, how do you expect me to pay the costs of bankruptcy?

 

We will ask what your income and expenses are. If bankruptcy is right for you, we will tell you what you can safely stop paying in preparation for filing bankruptcy. You should NEVER, NEVER, borrow money to pay your bankruptcy lawyer. In a Chapter 13, if you have regular income from employment, you don't need any money down.  I'll work with you on fees in a Chapter 7.  If you need bankruptcy relief, we'll figure out how to get it for you.

 

Do I have to go to Court?

 

It's possible, but most of our clients only attend a single Section 341 Meeting of Creditors. Although the meeting is sometimes held in the court house, it's not court. At the Meeting of Creditors, the Chapter 7 or Chapter 13 Trustee will be able to ask you questions about your petition, schedules and, in Chapter 13, proposed plan. Sometimes creditors attend the meeting and sometimes they do not. I will attend the meeting with you and I will answer all of your questions about the meeting before we go.

 

How often can I file a bankruptcy case?

 

If you previously filed a Chapter 7, you have to wait eight (8) years from the date of filing to be eligible for a discharge in another Chapter 7 case. If the first case was a Chapter 7, then you have to wait four (4) years for a discharge in a case filed under Chapter 13. From Chapter 13 to Chapter 13 is two (2) years. From Chapter 13 to Chapter 7 the time period is six (6) years, but there are two exceptions: If you paid unsecured creditors in full or if you paid at least 70% of the claims and the plan was proposed in good faith and was your best effort. So, to recap: 7 to 7 is 8 years; 13 to 13 is 2 years; 7 to 13 is 4 years; 13 to 7 is 6 years. However, there might be times that you would want to file a Chapter 13 even if you were not eligible for a discharge. You may need the immediate protection of bankruptcy.  Also, if you filed a case but did not get a discharge (uncommon in Chapter 7, but common in Chapter 13) then the case doesn't count against you for discharge eligibility.  And remember, the date you are interested in is the date the case was filed - not the date of discharge.  

 

If I'm married, do both spouses have to file bankruptcy?

 

No. A married person can file independently of their spouse. We do have to schedule the income of a spouse that you are living with (but not if you are separated and maintaining separate households); however, they do not have to file bankruptcy. The question would be whether the spouse was also obligated to the debts that you are obligated to.

 

Will I lose all of my stuff if I file a Chapter 7?

 

In most of our cases (and I mean the vast majority of our cases) our Chapter 7 clients do not lose anything.  Oregon allows you to choose between the State property exemptions and the Federal property exemptions. As long as we can fit your property within those exemptions, and we usually can, you don't lose anything. You also need to realize that we do not need to use an exemption on encumbered property. So, for instance, if you have a car that's worth $15,000.00 but you owe $12,000.00 on the car, we only need to use $3,000.00 of an exemption on that vehicle. The homestead exemption in Oregon is $40,000 for a single or $50,000 for a joint case.  If you select Federal exemptions, you will have $27,900 for a single or $55,800 homestead exemption in a joint case. The same rule applies - we only need enough exemption to cover the unencumbered portion of the house or mobile home. If we did not have enough exemptions to cover all of your property, then we would discuss Chapter 13.  Pension and retirement benefits (401(k), IRA, etc.) are absolutely exempt in any amount.  The personal property exemptions are different depending upon whether you select the State or Federal exemptions and the Federal exemptions allow you to use any unused portion of the homestead exemption up to $13,950 along with another $1,475.00 as a wildcard to apply to any property.  What we do is analyze your case and pick the exemption schedule that is best for you.

 

Will my bankruptcy case be reported on my credit report?

 

Yes. The fact that you filed bankruptcy will be reported for up to 10 years on your credit report. However, typically your credit score will actually go up after you file bankruptcy. Why is that? In a Chapter 7 case, creditors will know that you have discharged all of your debts and that you will not be eligible for Chapter 7 again for eight years.  Caveat:  If you have a pretty good credit score when you file bankruptcy, typically we see those scores go down after filing.

 

Are there any types of debts that can not be discharged in bankruptcy?

 

Yes. Student loans are typically not dischargeable in bankruptcy and some taxes (depending on the type of tax and when it was due) are not dischargeable.  Domestic support obligations should be thought of as non-dischargeable, but the obligation and who holds will be considered relative to your specific case to determine dischargeability.  There are other debts which may not be dischargeable as well, such as debts founded upon fraud. When you meet with us, we are interested in the nature of your debts and the date they were incurred. We will advise you of which, if any, of your debts may not be subject to discharge.  The law on student loan discharge is evolving.  However, to obtain a discharge for a student loan usually requires a separate lawsuit called an adversary proceeding filed in the bankruptcy court.  The creditor has to prove that it is a type of loan that is not subject to discharge and if the creditor meets that burden of proof, the debtor has an opportunity to prove that excepting the loan from discharge would create an undue hardship.  

 

How long does it take to file a bankruptcy petition?

 

We can get your petition ready as fast as you can get us the information we need to complete the petition. Generally, it takes about a week from the first meeting to the day we sign and file your petition.

 

How does bankruptcy stop creditors from calling me, suing me, garnishing my wages or repossessing my car?

 

From the very second that you file a bankruptcy petition, the automatic stay goes immediately into effect. The automatic stay prohibits creditors from doing anything to collect a debt or the collateral securing a debt. A creditor that ignores the automatic stay is in contempt of the orders of the Bankruptcy Court and can be punished accordingly.

 

What if I file a Chapter 7, but want to keep a car that I owe money on?

 

In most cases, that is not a problem. The creditor (car loan company) will want you to keep insurance on the vehicle and to enter into an agreement reaffirming the car. As long as we can show the bankruptcy court that the payments will not be unduly burdensome on you, you can keep the debt. The better question is, many times, should you keep the debt. It depends upon the value of the car, how much you owe and how much the interest on the debt is. 

 

What if I enter into a reaffirmation agreement for my car, but then change my mind?

 

That's okay too, as long as you change your mind soon enough. You can cancel a reaffirmation agreement any time before a discharge is entered in your case. Also, you can cancel a reaffirmation agreement within sixty (60) days of filing the agreement with the Court.

 

What if I have a question that is not listed here?

 

You can call me or send a text message to me at (458)201-5745 or send an email to me at jonathanrbunn@gmail.com.  I don't mind talking to you and answering your questions.