Articles Posted in Bankruptcy FAQ

Bankruptcy FAQ – there are so many frequently asked questions about filing bankruptcy. Should I file? When should I file? What will it do to me? Will I lose everything? Can I keep my car? Can I keep my home? Will it stop a garnishment? Will it stop a foreclosure? If I’m married, do we both have to file? Will it affect my spouse? I’m behind on child support, can it help me with that? There are two main kinds of bankruptcy that an individual would choose from and they are Chapter 7 or Chapter 13. Both types have pros and cons. And both types definitely have a lot of false information spread out there about them. That’s where bankruptcy FAQ pulled together and in one place for someone to search through the answers helps so much to clarify fact from fiction. The laws in this area have changed over the years. The stigma of filing should not be there but because of the efforts of credit card companies and many other creditors spreading rumor and judgment, it sometimes still is there. Bankruptcy laws were created to protect you. To keep you and your family functioning during and thru hard times. Everyone experiences rough patches to no fault of their own. Death of a spouse, divorce, loss of a job, medical illness, accident, etc – so many things can impact our finances negatively that we had little to no control over. Bankruptcy allows you to regain control of things and get going back in a stable financial direction.

What is considered property of the bankruptcy estate?

Published on: August 14, 2015 | Frank Coxwell

The bankruptcy code defines “property” very broadly. If you are considering filing a bankruptcy, it is important for you to know what all is considered property of the “bankruptcy estate” and whether or not it is covered fully by the allowable bankruptcy “exemptions”. Even the property that is “exempt” is property of the estate until the exemption claims are final (generally 30 days after the bankruptcy 341 meeting).

Property includes all of your legal and equitable interests. For chapter 13 cases filed in Mississippi, all of the debtor’s property, including acquired property and income necessary to fund a chapter 13 repayment plan is considered property of the estate during the entire chapter 13 case.

So what are some examples of property other than the obvious assets such as house, car, clothes, etc? The right to file and settle a lawsuit; stock Continue Reading ›

12 Things You Need to Know Now

Published on: June 23, 2015 | Frank Coxwell

Each one of these things can have serious consequences depending on the plan we develop for dealing with your debt, so:

1. Don’t borrow any more money. Don’t take out a second mortgage.
2. Don’t take money out of your retirement, 401k, or IRA.
3. Stop using your credit cards. Don’t use the convenience checks and don’t take cash advances. Don’t do “balance transfers” from one credit card to another.
4. Don’t keep your money in the same bank or credit union where you owe money. Stop all direct deposits into that account and redirect them to a different bank. Continue Reading ›

How can bankruptcy help me right now?

Published on: May 13, 2015 | Frank Coxwell

The protection available to you when you file bankruptcy is immediate and automatic. The moment you file, whether it is a Chapter 7 or a Chapter 13 bankruptcy case, the court places you under it’s protection. Both your income and property are completely sheltered from any creditor seeking to repossess, foreclose, garnish, or seize them. The court refers to this as “The Automatic Stay”. Any and all collection attempts against your income or your property must stop. If a lawsuit has been filed, it must cease. If a judgment has been issued and a subsequent Writ of Garnishment has gone out, it must cease. If the repossession order has gone out, efforts must cease. If the foreclosure date has been set, it must cease. Also, creditors must stop calling you, sending you letters, calling your family, etc. The Automatic Stay is known as “the protection that halts any and all creditor collection activity”. For more reasons why you may not want to wait, click here. Bankruptcy was created to protect you, your income, your family, and Continue Reading ›

A checklist for “Should I file bankruptcy?”

Published on: May 13, 2015 | Frank Coxwell

I have found it helpful to share this checklist with people who call asking me “Should I file bankruptcy?” In a nutshell, if more than two of the following issues apply to you, it is possible that bankruptcy would be an option worth investigating further:

Debt collectors are calling you at home or at work.
You are utilizing payday loans to make ends meet.
Your wages will soon be garnished or are being garnished now.
Your bank account has been frozen.
The majority of what you owe is unsecured debt like credit cards, medical bills, payday loans, etc.
Your facing the threat of foreclose on your home.
The foreclosure process on your home has already started.
Your facing possible repossession of your vehicle.
You have had a vehicle repossessed.
You want to give up your house or vehicle and walk away without owing any money.
Your bill payments are more than 30 days behind.
You have been sued or are being sued over debt.
You have a significant amount of medical debt that will not be covered by insurance.
You have medical insurance but can’t afford to pay your share of the bills.
You owe income taxes that you cannot afford to pay.
Your total debts (other than house & car) are more than you could pay and still live, even over five or more years
You have high student loan deb, cannot defer payment any longer, and the notes are more than you can pay

What is a bankruptcy discharge?

Published on: January 30, 2015 | Frank Coxwell

I’m sure you are coming across a great deal of unfamiliar terms and phrases while researching the process of filing bankruptcy. This jumble of information may make references to getting a “bankruptcy discharge,” for example. So what is a “bankruptcy discharge”? If your debts are “discharged” through your bankruptcy case, then you are no longer obligated to pay them and your creditors are prohibited from ever making any effort to collect the debt. So receiving a “bankruptcy discharge” is a good thing – it’s what you want to happen – what you want your final result to be.

It’s important to note that if the debt has property that is collateral for the loan, the creditor may still be able to repossess the property if you do not pay. In other words, filing bankruptcy won’t give you a free car. You will either pay for the car or you will surrender it back to the creditor with all responsibility for any difference in amount owed, etc being gone. Any debt of yours that is cosigned or guaranteed by someone else can still be collected from that person (your cosigner or guarantor), but not from you. Your legal obligation to pay has been “discharged”.

Will all debts be discharged? Most of the debts you owe at the time you file your case will be discharged, but certain types of debt cannot be discharged no matter what. These non-dischargeable debts include: income taxes that are less than 3 yrs old, child support, alimony, government fines and restitution, and student loans. Other debts that you may not be able to discharge include debts you may have incurred by fraud or willful or malicious actions.

How long do I have to wait to file bankruptcy again?

Published on: January 29, 2015 | Frank Coxwell

As long as a bankruptcy court has not barred you from filing, you can file bankruptcy again pretty much right away. However, you may not be eligible to receive a discharge. There would be no point to filing a Chapter 7 unless you are eligible for a discharge, but there may be reason to file a Chapter 13 whether you are eligible or not. A discharge means that the bankruptcy court releases you from qualified debts. Your bankruptcy case has gone through and been completed – ie: discharge received.

Let’s assume you want to file another bankruptcy and need to be eligible for a discharge. This table shows the time period that would need to be met in order to be eligible for a discharge in your new case:

If you filed bankruptcy not that long ago and have not hit the time period for you to be eligible to file again, you could discuss with your attorney the benefits of filing a Chapter 13 bankruptcy with a waiver of discharge. This would put you under the protection of the court, allow you to stop any garnishments, repossessions, foreclosures, etc, and pay your debts under a Chapter 13 Plan.

Do I qualify to file for bankruptcy?

Published on: October 12, 2014 | Frank Coxwell

One of the first questions that comes to mind when you are considering options is “Do I qualify to file for bankruptcy?” Let’s look at the eligibility requirements for the two most common types of bankruptcy, a chapter 7 and a chapter 13.

Am I eligible to file a Chapter 7? If you are an individual or a married couple who want to file Chapter 7, your lawyer will review your financial situation to determine if you qualify. Even if you are married, you can still file by yourself. Your spouse does not have to file bankruptcy with you. Your bankruptcy lawyer will use your family financial information to take a test for you called the “Means Test”. This test is designed to keep people with very high incomes from filing Chapter 7 because they have “the means” to pay their debt. Even people with very high income can pass the test if all of their expenses and debts and allowable deductions are taken into consideration. There are exceptions to even taking the means test. If your income is below the established threshold, you are not even required to complete the means test but are immediately qualified to file a Chapter 7 case. If your debts are business related rather than consumer related, this can also be an immediate qualification. The means test is complicated, but I am an experienced bankruptcy attorney who will make sure you get all of the allowances and exclusions on the test that apply to you. If you pass the means test or if you are exempt from taking the means test, then you can file a Chapter 7 case.

Am I eligible to file a Chapter 13? There are two main requirements for a Chapter 13 case. You must have money coming in each month from a job, or Social Security, or something. Then your debts must be under a certain amount. If you add up all your secured debts, like the mortgage, vehicle loans, and furniture notes, the total needs to be under approximately $1.1 million for secured debt. If you then add up what you owe on all your other debts, like credit cards, student loans, taxes, and medical bills you need to be under $383,175.00. (These numbers are current as of April 2013 and go up every 3 years.)

What are secured creditors and unsecured creditors?

Published on: October 3, 2014 | Frank Coxwell

Secured creditors are creditors that have some type of property (ie. security) or collateral for the loan you owe. They have a lien on your property, which is an interest in property that allows a creditor to repossess that property if you don’t pay. Your mortgage company has your house as security for the mortgage loan. The auto finance company has your vehicle as security for the auto loan. The local finance company may have some of your furniture and household goods as security for the money they loaned you. These are all secured creditors.

Unsecured creditors are creditors who you owe money to, but they do not have the right to repossess anything if you don’t pay them. Credit cards, medical bills, signature loans, payday loans are some examples of unsecured debts.

What is the Automatic Stay?

Published on: October 2, 2014 | Frank Coxwell

As soon as you file bankruptcy, an “Automatic Stay” goes into effect and stops all collection activity against you. This happens automatically the second your bankruptcy is filed. All creditors must stop trying to collect from you. They must stop doing anything to get money from you; this includes making calls, sending letters, and filing lawsuits. An automatic stay will also stop foreclosures, repossessions and sales of property from moving forward. Now, if you don’t pay your house notes the mortgage company would have the right to start the foreclosure up again after your bankruptcy case is finished.

There are some important exceptions to the automatic stay. It may not give you protection from some types of domestic support actions and it will not protect you from criminal charges made against you.

The automatic stay is temporary for secured creditors. They must get permission from the court before taking any action. Bankruptcy does not allow you to keep property that is security for a loan without making payments on the loan. You don’t get anything for free. If you don’t pay, a secured creditor may get court permission to seize and sell the property.

I need to file bankruptcy, but what if I’m married?

Published on: September 30, 2014 | Frank Coxwell

Commonly asked questions of married individuals needing to file bankruptcy:

Do married couples have to file bankruptcy together? If you are married there are three options for filing bankruptcy: 1) file together, 2) file alone, or 3) both file separately. There are several factors to consider when deciding if you should file jointly or alone. The biggest factors being how are the debts split between you, how much does each of you make, and who owns the property.

What about joint and co-signed debts? When a debt is joint or co-signed, both spouses owe 100% of the debt. It makes no difference what name comes first or who the debt was actually for. If your name is on the bill, you owe the whole thing. If you file joint tax returns then you both owe the tax debt.