Articles Posted in Frequently Asked Questions

Do only broke or penniless people file bankruptcy? Not at all.  If you decide to file bankruptcy, you will be among many of the rich and even famous that have also faces financial difficulty. Here are a few names of people who filed for bankruptcy that you may recognize. Many of them made the most of their fresh start and went on to make millions after they filed bankruptcy.

Larry King- Popular talk-show host Larry King filed for bankruptcy in 1978, but able to retire with an estimated wealth of about $50 million.

Donald Trump – After filing bankruptcy four times, the Trump name and brand is known throughout the world and Donald remains one of the richest men alive.

Is your water or electric power turned off?  Bankruptcy can help. As soon as you file bankruptcy the utility company must restore your service. If the company is threatening to shNo lightsut off your water, power or gas, then the bankruptcy will stop the cutoff process. The bankruptcy can also wipe out the bills owed to the utility company so you won’t have to make the back payments.

There is one catch.  If you want to continue to receive water, gas, or power in the future the city or company can make you put a deposit for future service. The size of the deposit is dependent on how much your average bills were, but is usually somewhere between $150 and $300.  If you had a water leak and your past due bill is $1,000.00, then posting a new deposit of a couple of hundred dollars is a lot better than paying the old bill.  You will get the deposit back when you move.

Public utilities, such as the electric, telephone, gas, and water cannot refuse you service or cut off their service just because you file for bankruptcy and owe them money.  But 21 days after filing bankruptcy the company can terminate the service if you do not put up a deposit or provide other security to insure that the future utility bills will be paid.

QuestionNo. Although a bankruptcy case is a public record, it is not that easy to find. Bankruptcy information is not published in any Mississippi newspaper that I am aware of. Yes, one of your nosey neighbors could go to the bankruptcy court and ask but that is a lot of effort and most people will not go that far. The bankruptcy court does not contact your employer and neither will your lawyer.

Now there are several situations where you may need your job, friends, or family to be contacted.

  • If you owe money to your employer, your friends, or family members, then they may be one of your creditors and they will be notified of the bankruptcy.
  • If you have a garnishment, then your employer will need to be notified so we can stop the garnishment.
  • If you file chapter 13 the monthly payments to the court will be deducted from your pay check so your employer will be notified to withhold the payment and send in to the Trustee accordingly.

There are very strict laws that prohibit discriminating against someone for filing bankruptcy. An employer cannot fire or demote you because of the bankruptcy filing. The bankruptcy court deals harshly with those who discriminate against someone just because they filed bankruptcy.

No. If you have been convicted of a crime you can still file bankruptcy. The bankruptcy papers don’t ask you questions like that. A criminal record would only be an issue if you were trying to file bankruptcy to get rid of fines or restitution. You can’t wipe out court fines and criminal restitution in bankruptcy. However, a chapter 13 bankruptcy would allow you to make your restitution payments over a 60 month period if you were having trouble making the payments ordered by the court that convicted you.

Of course you can. Just like you can set your own broken leg, deliver your own baby and rebuild the engine in your own car. You can do these things, but do you really want to? Do you have time? Do you have the proper tools, information and knowledge to get it done right?

Bankruptcy laws are complicated and full of traps. Mistakes and errors can cost you your property and your discharge.  Misrepresentation and dishonesty can land you in jail. Let me tell you about preparing and filing a bankruptcy case.

Attorney’s all use software to prepare and print the 50 plus pages that make up a bankruptcy filing just like your tax guy uses a tax program and just like your doctor uses a program to keep up with your visits and medical records. Bankruptcy lawyers put your information into a program that prints the forms and files the papers with the court. This seems simple enough. But once the papers are filed the U.S. Trustee, the case trustee and the court clerks all start going over your papers to see how they can kick you out, deny your discharge or disqualify you from the benefits of bankruptcy.  Do you know how to defend your position? Provide responses to any filed objections?

Definition of StrategyAlthough there is not a limit on the number of bankruptcy cases you can file and no limit to the amount of time in between filings, there are limits to when you are eligible to receive a proper “discharge”.  So why would you want to file a bankruptcy case if you know you cannot receive a discharge?  There are several reasons why this strategy may be utilized.  For example, say that you recently filed a chapter 7 bankruptcy and wiped out your unsecured debt but you have student loan or tax debt that is non-dischargeable.  You could turn around and file a chapter 13 bankruptcy in order to be protected from garnishments, lawsuits, levies, etc relating to the student loans or tax debts for up to 5 yrs even though you would not receive a discharge.

Here are the time frames that must occur between filings for discharge eligibility (Note: the time is counted from date filed to date filed):

8 years between Chapter 7’s. -727(a)(8)

If you are filing bankruptcy as an individual (not jointly with your spouse), yes, you must still report your spouse’s income. However, this in no way includes your spouse in the filing.  The court simply looks at your total household income for calculating eligibility   (Means Test) and for your post-bankruptcy household budget (schedule I and J).   Even though your spouse is not filing with you, it is highly recommended that you both participate in the consultation so that both of you understand the process and requirements. And as mentioned before – have decided that the best strategy for addressing your financial situation is to file individually.

There is an exception to this though if you are married but separated.  If you and your spouse are separated, your total household income is your income.  If your spouse is paying domestic support, you will need to include that in your totals.

No.  There may be reasons why it would benefit you both to file together, but the choice is yours individually to make.  You cannot be forced to file with your spouse and likewise, you cannot force your spouse to file with you.  When you file alone, you are filing “individually”.  When you file together, you are filing “jointly”.  Everyone’s situation is unique and depends on the type of debt you have and whether or not you both are responsible for the debt, etc. It is important to review the possibilities of filing individually vs jointly to see which way would benefit you both the most.

adding timeSomething most people do not realize (including attorneys who are not versed in bankruptcy law), is that if someone has been hurt and there is a statute of limitations governing the timeline the person has to take action upon that injury (using personal injury as one example), filing a bankruptcy will extend such statute of limitations by 2 years as long as the filing of the bankruptcy was before the expiration date of the original statute of limitations.

Bankruptcy Code § 108(a) allows a bankruptcy trustee to commence an action on behalf of a debtor’s estate within the period allowed by state law for such an action, or within two years after the filing of the bankruptcy, whichever is later. Stanley v. Trinchard, 579 F.3d 515, (5th Cir. 2009).

The language about the trustee commencing the action should not raise concern with you or with your personal injury (or other such) attorney.  The trustee will always keep the original attorney that was hired by the client for the associated case. Never do Trustees handle personal injury or other cases themselves.  Being able to have 2 years added to the statute of limitations can be a huge advantage!

Individuals with excessive debt sometimes wonder whether it makes sense to file for bankruptcy.  There are many reasons why people who need financial help should file for Chapter 7 bankruptcy or Chapter 13 bankruptcy.  Making this decision is something you should discuss with a well informed Mississippi Bankruptcy attorney who is an authority in consumer bankruptcy.

Bankruptcy laws are there to help you get a fresh start and relieve you of the burden of overwhelming debt.

When Does Filing Bankruptcy Makes Sense.