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RHYMER LAW FIRM |
General Bankruptcy Questions
Bankruptcy is a proceeding under federal law whereby you are granted partial or complete relief from the payment of your debts. This relief is provided in the form of an "automatic stay" issued automatically and immediately upon the filing of the bankruptcy petition which stops all creditor collection activities. The Bankruptcy Court enters an order at the end of the case relieving you from responsibility for paying certain debts. The final order is called the "discharge".
The automatic stay is an order issued upon the filing of your petition that orders creditors to cease all collection activities against you. From the second this stay is issued, you are protected by federal law from creditors trying to collect from you. If you have previously filed a bankruptcy case there can be some restrictions that apply.
What is the difference between Chapter 7 and Chapter 13?
If you want to stop creditor action right away by discharging or wiping out your legal liability for your debts, Chapter 7 may be a solution. Under a Chapter 7 filing, you get to keep your assets - your furniture, clothing, car and home within the framework of your exemptions.
If you have a steady income and want to pay off all or part of your debts, you may choose Chapter 13 - especially if you have many "secured" possessions - home, car, and furniture. Through Chapter 13, you can spread your payments over a period of time that's comfortable for you. When you call for your FREE consultation we will discuss with you and help you decide what is best for you.
What do I need to bring to an appointment?
You will need to bring a written list of all of your creditors and how much you owe them, a recent pay stub, and a written list of your monthly living expenses (rent, food, gasoline, etc.). Also bring any lawsuit or foreclosure related papers that you may have. Click on the link to Appointment Info for convenient forms and additional information.
Once you retain the services of Rhymer Law Firm and your case is filed, the law requires creditors to deal with us and leave you alone.
What are the filing fees and court costs?
The clerk's filing fee for a Chapter 13 case is a total of $281.00. Part of the filing fee may sometimes be paid through your Chapter 13 payment plan. The clerk's filing fee for Chapter 7 cases is $306.00. In most cases, this will need to be paid at the time your case is filed. (Costs are subject to change by the bankruptcy court.)
Can student loans be discharged?
Under a Chapter 13 plan, you repay your student loans along with the rest of your debts. In Chapter 7, student loans may not be discharged except in "extreme hardship" cases.
What happens to guarantors or co-signers?
Under Chapter 13, all consumer co-signers are protected by the courts, but under Chapter 7, they are not, and creditors may try to collect the debt from the cosigner. You may, however, sometimes keep the cosigned debts and make the contract payments so that the creditor will not try to collect from the cosigner.
How does bankruptcy affect my credit rating?
Chapter 13 and Chapter 7 bankruptcies can stay on your credit report for 10 years. By not filing, credit bureaus may show negative reports for 7 years. By filing, negative reporting stops immediately. This allows you to begin re-establishing credit faster by keeping home, auto, and other payments current. You may also obtain a "secured" credit card to help re-establish your credit once your case is over.
How does bankruptcy affect pending lawsuits?
Pending lawsuits, garnishments, or judgment collections are stopped immediately when you file your case.
How are taxes treated in bankruptcy?
Under Chapter 13, you pay most back taxes, without interest, under your plan. Under Chapter 7, secured taxes, such as property taxes, cannot be discharged. Unsecured taxes, such as income taxes, may be discharged if the taxes are more than 3 years old, and you filed timely, and you have not been assessed in the prior 240 days.
Repossession action is stopped immediately when you file your case.
What about garnishment of my wages or bank accounts?
As soon as you file a bankruptcy petition with the Court, it becomes illegal under the automatic stay for creditors to even attempt or continue to garnish your wages or bank accounts.
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