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Bankruptcy - General Information

The Nielson Law Office can represent most people and businesses throughout the Bankruptcy process, providing you with up-to-date information regarding the ever changing bankruptcy law and rules.

Filing a Bankruptcy Petition is a complex process, tailored to each individual or business.  Although common terms may be familiar to you, such as Chapter 7, 11 or 13, the Chapter that is best for you involves a careful of analysis of your income, debts and assets, and your expected future financial plans.

Making the decision to file bankruptcy is not easy. Getting all the information about bankruptcy and answers to your questions so that you can make an informed decision is very important.

What is bankruptcy?

Bankruptcy is a process under federal law that allows debtors  to get a Fresh Start with their finances.  Those who owe more money than they can pay may either eliminate debts or work out a payment plan to pay a portion (or all) of their debts over time. Often this helps a person keep their home or operate their business.

Will bankruptcy stop all the harassing phone calls and mail from bill collectors?

Yes.  Once the Bankruptcy Petition is filed creditors must stop all collection activity for a time period called the Automatic Stay.  It stops any foreclosure or collection activity. That includes most garnishment of wages, except for things like child support and other types of court ordered domestic support payments.

What does "secured" or "unsecured" debt mean?

Secured debt is debt that allows a creditor to make a claim on an asset (for example, a home, real property or car). Unsecured debt is held by creditors that have no claim to your assets (such as credit cards). Determination of secured and unsecured can be complex, as some credit card transactions may grant a security interest in the asset.  Most unsecured debt can discharged, but generally not loans such as student loan and taxes and some others.

What happens when one spouse files without the other spouse?

You need to discuss this carefully with your attorney. The spouse that doesnt file may end up being responsible for some of the debts.

Can I be held responsible for a debt that I co-signed?

Yes. You can be held responsible for any debt that you signed an agreed that you would pay in the event that someone else failed to make the payments (co-signed).

Will I lose my social security payments if I file?

No.

Am I going to lose my personal property if I file bankruptcy?

There are exemptions, both state and federal, that allow you to keep a certain amount of personal property. Your attorney will explain how these exemptions apply to people who file bankruptcy in your state.

Can I pick which debts to put in the bankruptcy?

No. You must include all of your debts. Sometimes people want to exclude a certain credit card or the like.  That is not possible, and all debt is part of the bankruptcy.  It is important that you tell your attorney about all of your debt, including those debts that are not likely to appear on your credit report such as medical bills and personal loans from family and others.

When will I get my discharge?

Generally a Chapter 7 bankruptcy discharge is received 60 days after the first meeting of creditors is scheduled. In Chapter 13, your discharge will be given to you once you have completed the payments under the Chapter 13 plan.