Frequently Asked Questions About Bankruptcy
We realize that a web page cannot answer all of the questions that you
may have about bankruptcy, but the following are some of the most commonly
asked questions. Caution: The following are merely examples of common
questions and answers. You should not rely on the information contained
herein, as each set of facts is different, each judicial district has
its own practices and procedures, and each state has different exemption
laws and limitations. These questions and answers are designed solely
for the Central District of California.
What assets can I protect if I file bankruptcy?
Basically, married couples can protect up to $75,000 of equity in their
primary residence when they file bankruptcy. A single person, under
age 65, can protect up to $50,000 of equity. A person or couple over
age 65, or disabled, can protect $125,000 of equity. With regards to
other assets, generally speaking, ordinary household goods, appliances,
clothing and jewelry can be protected. Some equity in a vehicle can
be protected, some cash value in a whole life insurance policy, all
value in a qualified retirement plan, and depending upon the facts and
circumstances, perhaps some or all equity in a self-determined retirement
plan, such as an IRA or SEP IRA.
Do I have to appear in court?
In a chapter 7 proceeding, your appearance will be required once, for
a brief interview with the bankruptcy trustee assigned to your case.
The hearing is not held in a courtroom or before a judge. In a chapter
13 proceeding, in addition to the hearing before the trustee, you may,
depending upon the facts and circumstances, have to appear before the
court at one or more confirmation hearings. In addition, if a creditor
objects to the discharge of your obligation to them, and the matter
is not settled before trial, you may have to appear at trial.
Do I have to list all of my assets?
Yes, including those not in the jurisdiction, such as in other states
or countries.
How long will it take to obtain my discharge?
In the usual chapter 7 case, approximately 120 days from the date that
the case is filed. In a chapter 13 case, which requires monthly payments
to the trustee from future income for a fixed period of time, usually
36 to 60 months, within six (6) months after the last payment is made.
Can I reestablish credit after bankruptcy?
Yes. The credit market is much more competitive than in the past. If
you are employed and have income, and have maintained current payments
on car or home loans through the bankruptcy process, you may be invited
to apply for new credit shortly after your discharge. In some cases,
some credit card companies may offer you a chance to keep a current
card by agreeing to repay some or all of your current balance. Depending
upon the facts, such an offer may be enticing.
Will I discharge all of my debts in bankruptcy?
Generally speaking, there are two categories of exceptions to the general
rule that all debts are discharged in bankruptcy. The first category
of exceptions is statutory exceptions, such as recent income taxes (less
than three years old), obligations to pay child and/or spousal support,
student loan obligations, and damages arising from a drunk driving conviction.
The other category is for "bad act" debts, or those arising
from what a creditor can prove was dishonesty, including fraud or misrepresentation.
How do I keep creditors from bothering me?
The filing of the bankruptcy proceeding with the Court creates an automatic
restraining order, or stay, which prevents all creditors from taking
any further action to collect a debt incurred before the filing of the
bankruptcy case. All creditors will receive a notice directly from the
court clerk within approximately ten days notifying them of the commencement
of the case, other relevant information and deadlines. If a creditor
willfully violates that stay they can be sanctioned.
How do I start the process?
Call or e-mail for an appointment. We will sit down and evaluate your
particular needs, requirements and timing. The cost of the initial consultation,
usually $200.00, will be applied against the cost of the bankruptcy
proceeding, which will vary on a case-by-case basis.
