Woman Confused by Bankruptcy Process

A person can become overwhelmed with all of the material that is out there on Chapter 7 and Chapter 13 Bankruptcy. Below are questions that are frequently asked of our Atlanta bankruptcy attorneys regarding importance of bankruptcy and the filing process and procedures.

General Information Regarding the Bankruptcy Process

What exactly is bankruptcy?

Bankruptcy is a process designed to help consumers and businesses repay or eliminate their overwhelming amounts of debts under the protection of the courts

Will bankruptcy wipe out all my debts?

While filing bankruptcy is used to eradicate your excessive amount of debt so that you can get back on a good track to financial freedom, it does not mean that it will wipe out all of the debt that you or your business has created. Working with an Atlanta bankruptcy lawyer will help you gain clarity of what you can file and what you can’t file as well as what you will be obligated to pay and what will be erased from your credit history.

What is the difference between Chapter 7 and Chapter 13 bankruptcy?

When filing for Chapter 7 bankruptcy, you may ask that the courts discharge most, if not all of the debts that you owe. In return, the trustee can take any property that you own that is not exempted from collections.

In a Chapter 13 case, a can request a repayment plan with the bankruptcy court to pay back a portion or all of your debt over a period of time. You lose no property when filing for Chapter 13 because your repayment plan is based off of your current income.

What form of bankruptcy should I use?

When filing for bankruptcy, it is best to select the type of bankruptcy that best fits your debt situation. The new bankruptcy law states that filers who have incomes that are higher than the median income for their size family may not be eligible to file for Chapter 7 while those who have a secured debt of more than 1.1 million dollars cannot use Chapter 13. For more information regarding the right case for you, call one of the lawyers at Clark & Washington today.

Who should I notify if I suspect a possible fraudulent filing?

Because there is a high volume of people submitting requests pertaining to complaints of criminal violations in the bankruptcy system, The U.S. Trustees are asking that you submit a signed letter, which should contain the following:

  • Name and address of the business or person you want to report.
  • Include the bankruptcy case, location of where the case was filed and the case number.
  • Add any additional information that can help identify the individual or business you want to complain about.
  • A brief summary of the alleged fraud.
  • Itemize a list of any asset that was concealed and the estimated dollar value or any unreported income
  • Make sure to write your name, address and email address so that the courts can get in contact with you. While you are not required to identify yourself, it does help so that you can be contacted if there are any further questions that need to be answered.

Once all of this information has been collected, the matter will be sent over to the United States Attorney for review.

Can any qualify for bankruptcy?

For the most part, anyone can apply for bankruptcy, however, not everyone is eligible for a particular form of bankruptcy. Bankruptcy was designed for the honest debtor who has an extensive amount of debt that they can no longer afford to pay their bills of live off of their income. Filing previously for bankruptcy may affect your options too.  To check and see if you are qualified to file for bankruptcy with an Atlanta bankruptcy attorney, contact one of our experience lawyers to help you today.

How long does the bankruptcy process take?

Filing bankruptcy can be a very quick process, only lasting a couple of months. The duration of the case is also determined by the type of bankruptcy that you file.  When filing for Chapter 7, the process normally takes about four to six months while filing Chapter 13 can last between three and five years.

What does my free consultation at Clark & Washington consist of?

Looking for helpful and honest advice about your bankruptcy case?

Well, you are in the right place. When you come into our Atlanta office, you will have a one on one with one of our Atlanta bankruptcy lawyers who will advise you towards the course of action that is best for you. You will not need any forms or documentation, just yourself for your initial meeting.

Will I be able to obtain a mortgage after filing for bankruptcy?

If you have just filed bankruptcy, you will not be barred from obtaining a mortgage loan again in the future.

However, you may not be able to get one immediately.

When you are again eligible for a mortgage will depend the type of loan you want, the type of bankruptcy you filed and how good your credit is at the time you want the loan.

Here are the details:

FHA Loans and VA Loans

To obtain an FHA (Federal Housing Administration) loan or a VA (Veterans Affairs) loan after a Chapter 7 bankruptcy, you must wait two years from the date your Chapter 7 is discharged.

You can obtain an FHA loan during a Chapter 13 bankruptcy as long as you have made 12 months of satisfactory Chapter 13 plan payments, but you must have bankruptcy court approval to get the loan. In the case of either an FHA loan or a VA loan, you must provide an explanation of the bankruptcy.

USDA Loans

 If you want a USDA (United States Department of Agriculture) loan, you must wait three years from the date of a Chapter 7 discharge or after 12 months of making Chapter 13 plan payments, with court approval, or at least one year after the Chapter 13 is discharged.

Conventional Loans

Conventional loans have the longest waiting periods. If you want a conventional loan, you must wait four years after receiving a Chapter 7 discharge and two years after receiving a Chapter 13 discharge. If your Chapter 13 case was dismissed without a discharge, you must wait four years from the date of the dismissal.

Meeting Other Loan Criteria

Once these time periods pass, you will then be able to qualify for a mortgage loan, but you must still meet all the typical qualifications for obtaining a mortgage loan. You must be creditworthy, and you must be able to prove that you have a sufficient and reliable source of income.

If you have further questions about filing for loans after bankruptcy, please contact us today.

How does bankruptcy affect senior citizens?

An increasing amount of elderly Americans are seeking bankruptcy relief due to decreasing pensions and rising health costs. Luckily, senior citizens are having an advantage over other debtors when filing for bankruptcy. For more information regarding the issues that may affect senior citizens applying for bankruptcy, read below.

Using Bankruptcy Lawyers in Atlanta to Eliminate Your Medical Bills

Medical bills are one of the leading causes of debt for the elderly.

Fortunately this form of debt is the easiest type of debt to get discharged in the bankruptcy process.  Actually, applying for Chapter 7 with a bankruptcy attorney in Atlanta can eliminate outstanding medical bills within months. While filing bankruptcy can remove your medical debt, it will only eliminate debt that you have at the time of filing. If you feel that you are going to accrue more medical debt, you may want to consider filing once you are able to include all of your medical bills.

Home Equity Protection When Filing for Bankruptcy

Many senior citizens would consider their home as their retirement palace.  If you are building equity or have equity in your home, it is best to make sure that it will be safe if you decide to file for Chapter 7 bankruptcy. During the bankruptcy process, the fiduciary is authorized to take your nonexempt property, including any built up home equity, and use it as payment to your creditors.

Luckily, many states offer a homestead exemption that is used to protect a certain amount of equity in their home. Some states offer a higher homestead exemption than other states for senior citizens, however, the amount of your homestead does depend on the laws in your current state.  If you are considering filing for bankruptcy in Atlanta, make sure to talk to an attorney and discuss your states bankruptcy exemption laws.

Exempt Your Retirement Accounts in Bankruptcy

Besides home equity, many seniors have a significant amount of money saved in their retirement account.  Federal bankruptcy law states that majority of tax exempt retirement accounts, which includes 401k, 403(b)s and profit sharing, can be exempted in the bankruptcy process. IRAs and Roth IRAs are also exempted up to $1,245,475. This means that your retirement funds are safe when filing for Chapter 7 bankruptcy in most cases. It is best to keep in mind, however, that the bankruptcy law only protects valid retirement funds but your money must be in a legitimate retirement account.

Social Security Benefits Are Not Included in the Bankruptcy Means Test

While senior citizens may have an advantage over other filers, they must pass the bankruptcy means test to qualify. A means test will compare your average monthly income against the median required for your state to decide if you are eligible for Chapter 7. If you have a high income you will be disqualified from the bankruptcy process, however, under the same bankruptcy law, any benefits that you are currently receiving under the Social Security Act are not included as income for the means test. If you have a separate income in addition to your Social Security, you may still be eligible to file for bankruptcy. However, keep in mind that you must divulge these earnings to prevent disqualification.

What do I need to do to get my life back on track after my bankruptcy?