Frequently Asked Questions
Bankruptcy can be a complex, confusing, and involved process for those who are already under stress due to financial problems. Contact experienced attorney Kim MacLeod today for a free initial consultation regarding Chapter 7 and Chapter 13 bankruptcy.
Kim realizes that you need relief from your financial burdens and is dedicated to giving you one-on-one attention, providing you with the information to help you make an informed, reasoned decision about filing bankruptcy, and assisting you in filing the type of case that best meets your needs. To help you in this process, here are some answers to questions you may have regarding bankruptcy and related issues.
Does it make sense for me to file bankruptcy?
If you are:
- Stressed out by your financial obligations
- Living paycheck to paycheck or incurring more debt in order to make minimum monthly payments
- Struggling to cover all of your monthly living expenses including credit card payments and medical bills
- Tired of getting aggressive creditor calls at home and at work
- Bombarded with late notices and collection letters
- Dealing with lawsuits, judgments and/or garnishments of wages or bank accounts
- Facing the foreclosure of your home or repossession of a vehicle
- Without a valid driver’s license due to unpaid tickets and court fines
- Realizing it will take many years to repay your debts at the small monthly payments that are all you can afford to pay
- Overwhelmed by your financial situation,
Why should I hire an attorney?
Modern bankruptcy involves many complex variables and may be difficult to navigate on your own. An experienced, caring attorney who can guide you through the process may be the key to accomplishing your debt relief goals.
How long does the whole bankruptcy process take, once my case is filed with the court?
A typical Chapter 7 bankruptcy case, where there are no non-protected assets available for sale or liquidation by the court-appointed Trustee overseeing your case, takes about 90 to 120 days from the time your bankruptcy petition and schedules are filed with the court to the date upon which you receive your discharge.
A Chapter 13 bankruptcy consolidation repayment plan will generally last from 3 to 5 years after the date your bankruptcy petition, schedules and Chapter 13 plan are filed, and the length of your case will depend on a number of factors that an experienced bankruptcy attorney like Kim MacLeod can review with you.
What kinds of debts cannot be wiped out in bankruptcy?
Generally, in a bankruptcy case, you will not be able to discharge, or get rid of:
- Debts for child support and alimony
- Most student loans
- Recent federal, state, and local taxes
- Obligations you fail to list in your bankruptcy schedules
- Debts incurred as a result of driving while intoxicated
- Obligations incurred through fraud
- Criminal restitution, court fines and fees.
All of these debts will survive a Chapter 7 case, but it may be possible for you to file a Chapter 13 repayment plan and pay these obligations back over time. Specifics regarding the debts you will be able to eliminate with Chapter 7 or pay back through Chapter 13 will be reviewed with you when you meet with the attorney.
Will collection efforts stop once I file a bankruptcy?
When you file a bankruptcy case, a blanket protection called an “automatic stay” immediately goes into effect and generally protects you and your property against collection efforts. Creditors are supposed to stop garnishments and collection pursuits and must hold off on any repossessions or foreclosures of your property.
However, under bankruptcy law, the collection of child support and alimony may still be allowed and may not be stayed by your bankruptcy filing. At your consultation, the attorney can elaborate about how each type of bankruptcy will affect the collection of child support and spousal support/alimony/maintenance.
If you are behind on house or car payments, filing a Chapter 7 bankruptcy may only temporarily stop the creditor secured by the property from foreclosing or repossessing, and filing a Chapter 13 debt consolidation plan may be the alternative you need as it will give you time to catch up the past-due amounts.
This office can provide details about your options, and can assist you in determining which chapter could be a solution for your future financial stability.
Will I have to appear in court for my case?
Yes, approximately 4 to 6 weeks after you file a Chapter 7 or a Chapter 13 bankruptcy case, you will have one mandatory appearance at a Section 341 meeting, a hearing also known as a “Meeting of Creditors”. Generally, your creditors do not come to this hearing, but each person filing bankruptcy must be present.
In a Chapter 7 bankruptcy, the Trustee who has been appointed by the bankruptcy court will conduct the hearing, and will ask you some questions under oath about your bankruptcy paperwork. In a Chapter 13 bankruptcy case, an attorney or representative on behalf of the court-appointed Chapter 13 Trustee will conduct the hearing and ask the questions. You will need to bring picture ID and Social Security number proof with you to the hearing to verify your identity.
If you file your case through this office, Kim MacLeod will talk to you about what to expect at the hearing and answer any questions you may have in advance of your hearing date. Kim will also be there at the hearing with you to help you and represent your interests.
Are there any credit counseling requirements I must meet before or after I file a Chapter 7 or Chapter 13 case?
Yes. Within 180 days before filing either a Chapter 7 or Chapter 13 bankruptcy case, you must complete a credit counseling course, which you can take online, over the phone or in person. Once you finish the counseling session, you will need to supply this office with your certificate of completion, which will be submitted with your bankruptcy paperwork when your case is filed with the court.
After you file your case, you are required to complete a second financial management/debtor education course, and can often use the same provider. Once you have completed the second class, you will again need to provide this office with the certificate from the course provider so that it can be filed with the bankruptcy court. If you fail to complete the second course within 60 days of your Chapter 7 section 341 hearing or prior to the completion of your Chapter 13 payment plan, your case will be closed by the bankruptcy court and you will not get a discharge of your debts, so your bankruptcy filing will be in vain. It is vitally important that you complete the second course on time, and our office recommends that you take it shortly after your Chapter 7 or Chapter 13 case is filed so that your certificate of completion can be filed with the court well in advance of any deadline.
Numerous agencies offer the pre-filing credit counseling and post-filing financial management/debtor education courses, but you must choose a provider approved by the United States Trustee, the government agency that oversees all bankruptcy filings. The course providers charge a fee for each class, typically from $10.00 to $50.00 per session, and you will need to pay the providers directly by debit card.
At your free initial consultation, attorney Kim MacLeod will give you information on approved credit counseling providers for this jurisdiction, the Western District of Washington, and will explain the two course requirements in greater detail.
What are the fees and costs involved in filing bankruptcy?
In addition to the fees you will pay directly to the providers of your pre-filing credit counseling and post-filing debtor education courses, you will have to pay a court filing fee totaling $335.00 for a Chapter 7 case or $310.00 for a Chapter 13 case. The court filing fees can usually be paid in installments, with $100.00 due when your case is filed. The balance of the filing fee must be paid in full, either directly to the court by you in a Chapter 7 proceeding, or through the Chapter 13 repayment plan that you will be funding, by a deadline imposed by the court. This office will advise you of your payment options and deadlines once you decide to file a Chapter 7 or Chapter 13 case.
For most Chapter 7 cases, you will need to pay the attorney fees in full before your case can be filed with the bankruptcy court, but you can usually retain this office for as little as a $100.00 down payment. The attorney fees involved in your particular case will be quoted to you at your initial meeting with the attorney, and are based on expected attorney time and the complexity of the issues in your case.
For most Chapter 13 cases, our office is able to include most, if not all, of your attorney fees within your Chapter 13 repayment plan. Chapter 13 attorney fees are set and approved by the bankruptcy court, and this office can usually file a Chapter 13 case for you and stop your creditors’ actions without you having to pay the bulk or any of your attorney fees in advance.
Your first consultation with this law firm is always free, and when you meet, you and the attorney can discuss fees and costs, payment options and alternatives for your particular case in greater detail.
Will I be able to keep all of my property if I file bankruptcy?
This office will review all of your real and personal property information with you and can advise you of the protections, or “exemptions”, available to you. Filing bankruptcy does not mean that you will lose everything. Most clients are able to keep their home, car and personal belongings.
If you are buying a home, vehicle, or other personal property in which a creditor holds a security interest, you will need to continue making payments on the property in order to retain it. The attorney will go over your options with respect to such property when you meet.
If you are behind in making payments on the home, vehicle, or other secured property, you may still be able to keep it if you are able to file a Chapter 13 plan and provide for the maintenance of future installment payments and the cure of past-due payments over the life of a Chapter 13 case.
The attorney can talk to you about these possibilities. Feel free to contact this office today!
How long will my bankruptcy stay on my credit report?
At present, the federal law governing credit-reporting agencies provides that credit bureaus cannot report bankruptcy cases on a person’s credit report after 10 years from the date of the bankruptcy filing. This rule includes the reporting of Chapter 7 and Chapter 13 cases.
You can acquire free credit reports once per year, at annualcreditreport.com. Do so if you need to check your reports for accuracy.
If I filed bankruptcy before, how soon am I eligible to file another bankruptcy case?
You are only allowed one Chapter 7 discharge within 8 years of the date you filed a previous Chapter 7 case. If it has been more than 8 years since a prior Chapter 7 filing, you may be eligible to file Chapter 7 again, and our office can help you in deciding if that option is available to you.
In addition, you cannot file a Chapter 7 case within 6 years of a Chapter 13 petition date unless in the prior Chapter 13 case, you paid allowed unsecured claims in full (100%), or you made plan payments in the prior Chapter 13 case of enough to pay at least 70% of allowed unsecured claims and your prior Chapter 13 plan was proposed in good faith and was your best effort. Furthermore, if you filed a prior Chapter 7 case and obtained a Chapter 7 discharge within 4 years of filing a new Chapter 13 case, you will not be able to get a discharge in the new Chapter 13 case. If you filed a prior Chapter 13 case and obtained a Chapter 13 discharge within 2 years of filing a new Chapter 13 case, you will be ineligible for a discharge in the second Chapter 13 case.
If one of these situations may apply to you, you can discuss it with attorney Kim MacLeod at your free initial consultation.
Can I re-establish credit after bankruptcy?
Filing bankruptcy of any kind will negatively impact your credit rating, but that does not mean that you cannot take steps to re-establish your credit once your bankruptcy case has been discharged.
If you filed a Chapter 7 case, you will not be able to file another such case for 8 years. Future creditors may realize that and may be willing to extend you credit, but possibly at an interest rate higher than normal.
If you have filed a Chapter 13 case, you generally cannot rebuild your credit until after your plan has been completed, but once your case is discharged, you may also have credit opportunities available to you. The attorney may suggest options for credit rebuilding once you have completed your case.
Your goals after bankruptcy should be to use credit wisely in the future, budget your expenses and pay your bills on time.