Bankruptcy-                                   Frequently Asked Questions

1) What exactly is Bankruptcy?

2) What will Bankruptcy Do for Me?

3) What will Bankruptcy Not do For Me?

4) How Often May I File for Bankruptcy?

 5) What types of Bankruptcy are There? 

 6) How do I know which Bankruptcy is Right for Me?

 7) What Property is Exempt from Bankruptcy?   

 8) What May I own after I file Bankruptcy?   

 9) Will Bankruptcy Wipe out All of my Debts?    

 10) Will filing Bankruptcy ruin my Credit?

 11) May I use a Credit Card After I file Bankruptcy?        

 12) Will my Utilities be cut off if I File Bankruptcy?

 13) Will Filing Bankruptcy stop bill collectors from Calling?

1) What exactly is Bankruptcy?                                                                       Bankruptcy is a process by which an individual who finds it difficult to pay his or her bills gets a fresh financial start.  If you file bankruptcy, that will immediately stop all of your creditors from attempting to collect debts from you.  However, it is possible that you could owe on some of those debts at a later time.
 

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2) What will Bankruptcy Do for Me?                                                                           If you file for Bankruptcy, it is possible to:

• Take away most or all of your debts. This is called a "discharge" of debts. It is designed to give you a fresh financial start.
• Stop foreclosure on your house and allow you an opportunity to catch up on missed payments. (Bankruptcy does not eliminate mortgages on property however.)
• Stop repossession of your vehicle or other property.
• Force a creditor to return property that he has repossessed.
• Stop wage garnishment, any type of debt collection, cease harassment, and similar creditor actions to collect a debt.
• Restore your utilities.
• Challenge creditors claims.

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3) What will Bankruptcy Not do For Me?                                                   Bankruptcy will not cure every monetary problem that you have. If you file bankruptcy, it is usually not possible to:

• You cannot eliminate 'secured debt' that is held by a secured creditor.  A secured creditor is a business that has taken a loaned money or sold property to you and taken property as collateral for the loan.  The most common examples of secured creditors are home loans and car loans.  This type of secured debt generally cannot be eliminated in the bankruptcy process, however, most often you will be allowed to keep the collateral if you agree to continue to pay off the debt.
• Bankruptcy will not discharge most of the following- child support or alimony, student loans, court orders, criminal fines, and some taxes.
• Bankruptcy will not protect a cosigner on your debts.  If an individual has co-signed on a loan that you took and the loan is discharged in bankruptcy, the co-signer may still have to repay the loan. 

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4) How Often May I File for Bankruptcy?                                                               You may file for Chapter Seven bankruptcy after six years have passed from the date of your last filing.  You may file for Chapter Thirteen bankruptcy at any time.

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6) How do I know which Bankruptcy is Right for Me?

• Chapter 7- under Chapter 7, you will file a petition that asks the court to take away or 'discharge' all of your debts.  In exchange for discharging all of your debts, you must give up all property that is not 'exempt.' However, unless you are quite wealthy, most all of your property will be exempt.  The non-exempt property is then sold and distributed amongst your creditors.  If you are behind on payments for your car or house, yet want to keep them, chapter 7 will not be a good choice.  Chapter 7 does not eliminate these types of debts.   
• Chapter 13-  Chapter 13 requires a debtor to file a plan to pay his debts.  These debts must be paid off over a series of 3-5 years.  Chapter 13 often allows a debtor to keep his house and his car, which he could have lost had he filed chapter 7.  So, you should consider filing bankruptcy under chapter 13 if you own your own home and/or car but are in danger of losing them because of falling behind on payments, but could catch up if given some time to do so.  

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9) Will Bankruptcy Wipe out All of my Debts?                                                        Yes.  With the exception of certain debts outlined above (student loans, child support, etc.), bankruptcy will wipe out all debts.

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10) Will filing Bankruptcy ruin my Credit?                                                                  If you are behind on your bills, your credit may already be bad.  However, since bankruptcy wipes out all of your debts, you are likely to be in a better position to pay your bills and get a better credit score.  The fact that you have filed bankruptcy may stay on your credit for 10 years.  However, that does not mean you are a bad credit risk.   

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11) May I use a Credit Card After I file Bankruptcy?                                           Yes, it is possible to get a debit or bank card, keep your current credit card if the credit card company allows it, or to receive a secured credit card which is backed by property that you currently own.

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12) Will my Utilities be cut off if I File Bankruptcy?                                              Your utilities cannot be cut off simply you file for bankruptcy.  A utility can require a deposit for future utility services though.  Also, you must pay any and all utility bills that arise after the bankruptcy is file.

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13) Will Filing Bankruptcy stop bill collectors from Calling?                                   Yes. The automatic stay will prevents bill collectors from calling or taking any action in an attempt to collect a debt.

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CALL THE MANNING LAW FIRM TODAY FOR A

FREE CONSULTATION
(214) 823-6600

The Manning Law Firm
4340 N. Central Expressway
Suite 200
Dallas, Texas 75206
Telephone (214) 823-6600
Fax (214) 821-3800

* Jack Manning has received the distinction of "Fellow" by the State Bar of Texas. This rating indicates very high to preeminent legal ability and very high ethical standards as established by members of the State Bar.

Disclaimer: This website is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Persons accessing this site are encouraged to seek independent counsel for advice regarding their individual legal issues.