Bankruptcy Questions and Answers
I am a co-signer for a debt, how does bankruptcy affect my
obligation?
If the debt is a dischargeable debt then
you will not have to pay it. However, the cosigner will become
primarily responsible for the debt. Be sure to list the co-signer as
a creditor in your schedules as they have a contingent claim against
you.
Can I keep my house after bankruptcy?
Depending upon which exemption scheme is selected and your
circumstances, you may exempt up to $100,000 in equity. When
calculating your equity you should use a value that is based upon a
forced liquidation as opposed to the best selling conditions to
arrive at a value for your home. Once you know the value, subtract
the amount owed plus selling and transfer costs from the value to
calculate the equity. In the depressed California market, liquidated
properties are often valued less than what we like to think the
property is worth.
Can I keep my credit cards after bankruptcy?
Under some circumstances you may keep your
credit cards. There are many factors which must be considered. Some
of those include the credit card balance at the time of the
bankruptcy, what the credit card company is willing to do and your
ability to pay the present and future credit card debt.
Will I lose my job?
No. Bankruptcy laws prohibits
discrimination based upon a debtor filing for protection under the
bankruptcy laws.
Can I go to jail if I file bankruptcy?
No. There are no debtor's prisons in the
United States.
Will my employer find out about my bankruptcy?
Under normal circumstances, unless your
employer is a creditor, your employer will not know.
Will bankruptcy stop a wage attachment?
Yes.
Will bankruptcy stop a judgment?
Yes. Most civil judgments are stopped by
bankruptcy.
Will a bankruptcy remove a lien?
Under some circumstances once the
bankruptcy proceedings have started, special motion can be filed to
remove certain liens. It will take a bankruptcy court order to
remove them. This is a complicated area of the bankruptcy law and an
attorney should be consulted.
Will bankruptcy stop an eviction action?
Perhaps. However, this will only delay the
inevitable. The owner is entitled to possession of his property and
at best you will be able to remain in the property until you have
received your discharge from bankruptcy or the landlord obtains an
order from the bankruptcy court. I must caution you that if the only
reason you filed the bankruptcy is to stop an eviction then this
might be considered an abuse of Chapter 7. If the bankruptcy court
finds that this is true then the court can immediately dismiss the
bankruptcy and impose other legal and monetary sanctions on you.
Will bankruptcy stop a foreclosure?
Yes. However, a home is an asset usually
secured by a deed of trust. The mortgage company is entitled apply
to the court for relief from the automatic stay, the order
preventing creditor action by virtue of the bankruptcy. Depending
upon several factors, you may be able to prolong a foreclosure until
you have received your discharge from bankruptcy. Usually, to keep a
home that is in foreclosure you will have to make a deal with the
note holder.
I am divorced, will bankruptcy wipe-out my obligation to pay
community debts?
In general, you will be discharged from
all dischargeable community debts. However, you should discuss this
with your family law attorney to understand the other implications
of the filing of a bankruptcy during the pending dissolution action
(divorce case). Also, remember that if you are discharged from
community debts, your spouse is responsible for the entire balance
owing on the debt. Put another way, they shift the responsibility on
to you.
Are there any debts that I can't wipe out in bankruptcy?
Yes, there are certain debts that are NOT dischargeable in
bankruptcy. Generally speaking, the following debts will not be
discharged: Taxes; Spousal and Child Support; Debts arising out of
willful misconduct and or malicious misconduct by the debtor;
liability for injury or death from driving while intoxicated; non
dischargeable debts from a prior bankruptcy; student loans and
criminal fines, penalties and forfeitures. Those debts which are
secured will be discharged, however, expect the creditor to take the
necessary legal steps to take back the property. In most cases if
the debtor's equity interest in the property is exempt, the debtor
may retain the property by redemption or reaffirmation.
Disclaimer:
This information deals with Chapter 7 consumer bankruptcy. Each state
has its own bankruptcy laws, so you need to check with your state for
details. Information dealing with Chapter 13 bankruptcy and consumer
debt restructuring is not discussed in the above. The information
contained above is provided for general information
purposes only and is not intended to be a legal opinion nor legal advice
nor is it intended to be a complete discussion of all the issues related
to the area of Chapter 7 consumer bankruptcy. Every individual's factual
situation is different and you should seek independent legal advice
regarding specific information. |