What You Need to Know
If you are struggling to pay off your debts, you are probably considering bankruptcy as an option to obtain financial relief. However, you probably have a lot of questions about it and how it will impact your financial future. To help you understand if bankruptcy is the right option for you, we compiled a list of frequently asked questions. Of course, the best way to know for sure if bankruptcy is the right course of action is to consult with an experienced bankruptcy attorney. Contact Fridman Legal today at (847) 278-0665 to schedule a free consultation.
Answers to the Most Frequently Asked Questions
Filing for bankruptcy is a major, so it is crucial to learn as much as you can about this option before moving forward.
Here is a list of some of the most frequently asked questions regarding bankruptcy:
- Can anyone file for bankruptcy? Almost any eligible person or business can file for bankruptcy. That said, even if you are eligible, it does not necessarily mean you can file under any chapter. If you are unsure which type of bankruptcy you can file for or if you are eligible, consult with an attorney.
- What is the difference between a Chapter 7 and a Chapter 13 bankruptcy? In a Chapter 7 bankruptcy, most debts, such as credit card balances, personal loans, and medical bills, can be discharged. To qualify, you must pass the means test. If your income is too high to pass, you can still file for a Chapter 13 bankruptcy. If you want to keep your car or home, this might be a more suitable choice. However, you will need to earn enough income to pay off a 3 to 5 year repayment plan.
- Which debts are not dischargeable? Even if you file a Chapter 7 bankruptcy, some debts are generally not dischargeable. You will still be responsible for student loan debt, unpaid child support, alimony, and tax debt. If these are the type of debts you are trying to wipe out, filing for bankruptcy will not resolve this issue.
- What property can I keep when I file for bankruptcy? You are allowed to keep exempt property when you file for bankruptcy. Exempt property includes clothing, household furnishings, tools you need for your business or trade, household goods, pension and retirement accounts, and some jewelry.
- Can I keep my home? You can keep your home when filing for bankruptcy if you meet certain criteria. If filing for a Chapter 7 bankruptcy, you will need to be current on your home payments and you will have to continue to make these payments after filing for bankruptcy. If you are filing for a Chapter 13 bankruptcy, you will also likely be able to keep your home if you have the income to pay for your monthly payments and can pay off overdue payments.
- Can I file for bankruptcy more than once? The short answer is, yes, you can file for bankruptcy more than once. However, there are some restrictions. If you filed a Chapter 7 bankruptcy, you will have to wait 8 years before filing again. If you filed a Chapter 7 bankruptcy and would like to file for a Chapter 13 bankruptcy, you must wait more than 4 years. If you filed for a Chapter 13 bankruptcy and wish to file for a Chapter 7 bankruptcy, you must wait 6 years. However, if you paid 100% of the debt owed to unsecured creditors or at least 70% of the claims in your Chapter 13 case, you can file right away. Lastly, if you filed a Chapter 13 bankruptcy and want to file again, you must wait 2 years.
Before moving forward with this process, make sure to seek the legal guidance you need to avoid making any unnecessary mistakes.
Schedule a Free Consultation with an Experienced Bankruptcy Attorney
At Fridman Legal, our bankruptcy attorney has been helping clients resolve their financial issues for over 17 years. If you are considering bankruptcy, do not hesitate to reach out to our law firm.
Request a free consultation at (847) 278-0665.