Frequently Asked Questions

How long does a Bankruptcy take?

How long will the Bankruptcy be on my credit report?

How long will it be until I can qualify for credit again?

When is a Bankruptcy advisable?

Can I file for Bankruptcy without an attorney?

What about Bankruptcy Petition Preparers?

Will I be able to keep all of my property if I file for Bankruptcy?

What are the eligibility requirements for filing Bankruptcy?

How long does a Bankruptcy take?

A typical Chapter 7 Bankruptcy case lasts approximately three to four months from the filing date until the Discharge.  A typical Chapter 13 case lasts three to five years, depending on the case.

How long will the Bankruptcy be on my credit report?

Your discharged debts will appear as discharged on your credit report for up to ten years.

How long will it be until I can qualify for credit again?

This depends in large degree on your actions after discharge.  It is not at all unusual to get credit card offers immediately after a bankruptcy.  The best advice I can give is to shred these offers as they come in.  The fastest way to ruin your fresh start is to incur new credit card debt.

As for home and car purchases, a number of variables can impact your credit-worthiness after a discharge in Bankruptcy.  You obviously want to keep your interest rates low and re-establish yourself as affordably as possible.  I generally recommend waiting for about 18 months to two years after a discharge before financing a vehicle in order to get a better interest rate.  Many mortgage lenders will advise waiting two to five years before applying for a mortgage to get better rates.

When is a Bankruptcy advisable?

This is very complicated and it depends heavily on the particulars of your financial condition.  Bankruptcy is not for everyone.  It is a very serious matter that should be considered a viable option for those in need.  Not everyone with financial problems needs a Bankruptcy to solve their problems.  I highly recommend that you seek the advice of a qualified attorney to determine whether or not it is advisable for you to file for bankruptcy.

Can I file for Bankruptcy without an attorney?

I do not envy anyone filing a federal case without the knowledge and experience of a qualified attorney representing them.  There can be very serious consequences that may involve the loss of property to liquidation if not adequately protected and/or civil or criminal implications for certain actions that you take or fail to take during your case.  I say this not to scare you or intimidate you, but to impart to you the importance of competent representation.  There are no shortages of perfectly competent attorneys out there to help you.  Make use of them.  I simply must advise that you not attempt this without competent counsel.

What about Bankruptcy Petition Preparers?

They are just what they sound like, for the most part.  The will prepare your Bankruptcy petition with the information you provide for them.  Many of them are not attorneys and cannot legally practice law.  This means they cannot give you any legal advice, they cannot legally advise you on how to exempt and protect your assets from liquidation and they cannot represent in you in court.  If they attempt to do any of these things, they may be acting in violation of the law.  They charge less than attorneys, but their services are also severely limited.  I cannot overstate the caution you should take when working with someone who is not a licensed and practicing attorney.

Will I be able to keep all of my property if I file for Bankruptcy?

In most cases, yes.  In Chapter 7, your ability to retain your assets depends largely on the equity value of the assets and your ability to exempt them from liquidation.  Debts that are secured by property may have to be reaffirmed in order for you to retain the property.  I advise that you seek a qualified attorney to do a liquidation analysis and to discuss the reaffirmation process with you before proceeding.

What are the eligibility requirements for filing Bankruptcy?

It depends on the Chapter you file under.  Chapter 7 has certain eligibility requirements that changed in 2005.  There are limits to the income you can have that vary according to your family size and region in order to be eligible for a Chapter 7 discharge.  Chapter 13 has its own eligibility requirements.  The easiest way to determine your eligibility for Bankruptcy under any Chapter of the code is to consult with a qualified attorney.  One word of caution is needed here:  many attorneys will be very quick to say you are either eligible or not based on your income level.  Bankruptcy attorneys are very familiar with the Means Test and its application and tend to answer this question with only very broad input from you about your income.  The truth is, not everyone with a higher than median income level is ineligible.  The Means Test is actually quite complicated and I would advise that if an attorney is unwilling to perform a full Means Test analysis for you in a free consultation, he probably is not interested enough in helping you to warrant his fee.

In my experience, Chapter 13 eligibility concerns are not typically as problematic as concerns of feasibility.  That is to say, most people are ELIGIBLE for a Chapter 13 bankruptcy.  That does not mean that it will be FEASIBLE or even ADVISABLE to file under Chapter 13.  Before proceeding, make sure that you fully understand what all a Chapter 13 will entail.  An attorney who does not take the time to fully contemplate your feasibility concerns with you should be avoided.  The goal should not be to get your case filed, but to make sure that you can actually meet your obligations and get the fresh start you need.