Will bankruptcy discharge all my debts?
• A Chapter 7 bankruptcy will discharge most debts. Exceptions are taxes or student loans. Also, you may choose to keep or reaffirm certain debts in bankruptcy, such as mortgages or car loans, that are secured by the property.
• When are my debts discharged in bankruptcy?
• The day you file bankruptcy, your debts are frozen. About four to five months after filing, you will receive a formal notice from the bankruptcy courts that your debts have been discharged.
• Should I pay bills with money from my IRA?
• Most retirement accounts 401K, IRAs, pensions, ERISA accounts are exempt under bankruptcy laws and protected. Paying debts with money from these accounts is usually not a good idea.
• How does a bankruptcy stop a home foreclosure?
• The same day and minute you file for bankruptcy protection, all debts are frozen and all collections activity must stop. Therefore, if you file bankruptcy the day before a foreclosure sale, the sale must stop. A Chapter 13 bankruptcy then gives you the time to prepare a plan to catch up on house payments over a period of five years.
• If I file bankruptcy will I lose everything?
• No. The bankruptcy code sets forth limits on the amount and value of the type of property you may keep. The type of property you have is divided into different categories. For example, most household assets are exempt with a $10,000 limit.
• Can bankruptcy help with taxes?
• While many kinds of taxes are not dischargeable, penalties and interest are. A bankruptcy filing will stop collection activity for taxes owed. A Chapter 13 bankruptcy will provide an organized monthly payment and may discharge certain types of taxes and penalties and interest that have been due and payable for at least three years.
• What happens to lawsuits and judgments when filing bankruptcy?
• A bankruptcy filing immediately stops or freezes lawsuits, judgment or collection activity. If a creditor has a judgment and is garnishing your wages, the garnishments can be stopped.
• How will filing bankruptcy affect my credit?
• Bankruptcy filing is bad for your credit. However, in many situations it actually improves your credit because of something called “debt to income.” Filing for bankruptcy eliminates your old debt, making it easier for you to take on and pay new debt. Also, you can not file a Chapter 7 bankruptcy again for eight years.
• What is a Chapter 7 bankruptcy?
• A Chapter 7 bankruptcy refers to Chapter 7 of the Bankruptcy Code. Under a Chapter 7 bankruptcy, there is no limit to how much debt a person may discharge. The amount of household income determines if you qualify for a Chapter 7 bankruptcy. A person can file for Chapter 7 bankruptcy once every eight years.
• What is a Chapter 13 bankruptcy?
• In a Chapter 13 bankruptcy, you file a plan that pays off a percentage of your debt in a time span of three to five years. The remaining percentage of your debt is discharged. Two of the factors that determine if you should file a Chapter 7 bankruptcy or a Chapter 13 instead are household income and the amount of assets you have. Many people filing for bankruptcy file a Chapter 13 bankruptcy to save a home or car as the plan gives you time to catch up on payments.
Gene Turnwald is an Okemos attorney specializing in bankruptcy.
• How will filing bankruptcy affect my credit?
• Bankruptcy filing is bad for your credit. However, in many situations it actually improves your credit because of something called “debt to income.” Filing for bankruptcy eliminates your old debt, making it easier for you to take on and pay new debt. Also, you can not file a Chapter 7 bankruptcy again for eight years.
• What is a Chapter 7 bankruptcy?
• A Chapter 7 bankruptcy refers to Chapter 7 of the Bankruptcy Code. Under a Chapter 7 bankruptcy, there is no limit to how much debt a person may discharge. The amount of household income determines if you qualify for a Chapter 7 bankruptcy. A person can file for Chapter 7 bankruptcy once every eight years.
• What is a Chapter 13 bankruptcy?
• In a Chapter 13 bankruptcy, you file a plan that pays off a percentage of your debt in a time span of three to five years. The remaining percentage of your debt is discharged. Two of the factors that determine if you should file a Chapter 7 bankruptcy or a Chapter 13 instead are household income and the amount of assets you have. Many people filing for bankruptcy file a Chapter 13 bankruptcy to save a home or car as the plan gives you time to catch up on payments.
Gene Turnwald is an Okemos attorney specializing in bankruptcy.