Frequently asked bankruptcy questions

On this page, we offer short, succinct answers to some of the most commonly asked questions about bankruptcy. As with all information on this website, it is not to be considered as legal advice. Each person’s situation is different, and it is important to discuss your specific situation with an experienced attorney before making vital decisions about your financial future. You can call to set up your free appointment with me at 225-771-8220, 337-347-9919 or 504-912-3805. I hope you find this information helpful.

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

There are many differences between Chapter 7 and Chapter 13. A Chapter 7 is a liquidation of assets, whereas a Chapter 13 is a reorganization of debt. In Chapter 7, there is no payment plan, whereas in Chapter 13, you are in a three- to five-year payment plan. Chapter 7 cases last approximately three months, and Chapter 13 case usually last the full five years if they are successful. All fees and costs in a Chapter 7 are due before filing, but in a Chapter 13, you only pay a portion of your fees up front. You do not need an income to file Chapter 7, but an income is required to proceed in a Chapter 13.

As you can see, the differences are numerous. In most cases, it is clear which chapter will best suit your needs. This is something that we can discuss in detail at your initial consultation.

What will filing bankruptcy do to my credit?

Odds are that if you are seriously considering filing for bankruptcy protection, then your credit report is probably not looking too good. Lawsuits, judgments, late payments, collection accounts and charge-offs reflect negatively on your credit. A bankruptcy is just another credit event that appears on your report. Bankruptcy does not destroy your credit score forever.

Will I be able to get credit again?

In a word, yes. Many of my clients have received financing for homes and cars within a couple of years after filing bankruptcy. There used to be a stigma attached to filing bankruptcy, but that is a thing of the past. With so many people and businesses filing for bankruptcy, we can't imagine that banks and lending institutions go more than a few days without seeing a bankruptcy on the credit report of a potential borrower.

Will I lose my house or my car?

The Bankruptcy Code is designed to provide you with a fresh start. Your home and your car are vital components to utilizing that fresh start and to reestablishing yourself as a productive member of the economy. One of the main reasons to hire an attorney to navigate you through the bankruptcy process is to avoid the loss of assets. Each case is different; in most cases, it is possible to keep your house, car, home furnishings and appliances through the appropriate use of exemptions, as well as with careful bankruptcy planning and strategy. If any of these items is encumbered by a loan, it is also vital that the payments are made – either directly or through a Chapter 13 plan – and that you maintain insurance on the property.

What is the cost?

Down payment on Chapter 13 cases starts at $500.00, depending on case complexity. Chapter 7 fees are due before filing and depend upon the type of case. Please see our Fees page for more details.

What happens after I file a Chapter 7?

After your Chapter 7 bankruptcy case is filed, you will be required to attend a creditors meeting. This meeting will occur roughly a month after the case is filed. Prior to this meeting, you will receive a notice from the court and a letter from Andress Law Firm notifying you of the court date and time. You will also receive a letter from your trustee, asking you to turn over certain documentation. You must comply with the requests of your trustee. Attendance at your creditors meeting is mandatory, and you must bring your original driver’s license and Social Security card. We will be there with you. The trustee will swear you in, turn on his or her tape recorder and ask you a series of specific questions that you must answer truthfully, under oath. The meeting usually lasts about five to 10 minutes, and after the meeting is concluded, you are free to leave.

You will be scheduled to receive your discharge approximately 60 days after the creditors meeting. Between the meeting and your discharge date, you must complete your financial management course and sign any reaffirmation agreements. If your case is an asset case, you will also receive additional correspondence from the trustee. If you have an asset case, you will need to coordinate with my office and trustee to retain your assets and pay the balance due to the trustee.

Once you receive your discharge, your case is usually closed, unless the trustee is administering assets. The administration of assets usually does not delay the discharge of your debts.

What is a reaffirmation agreement?

A reaffirmation agreement is an agreement between you and one of your secured creditors that is signed by both parties and filed with the court for the judge’s approval. Under the terms of the reaffirmation agreement, the creditor is agreeing to allow you to keep collateral, such as a car or a house, as long as you make the payments and keep the property insured. Signing a reaffirmation agreement excludes that particular debt from discharge.

What happens after I file a Chapter 13?

After your Chapter 13 bankruptcy case is filed, you will be required to attend a creditors meeting. This meeting will occur roughly a month after the case is filed. Prior to this meeting, you will receive a notice from the court and a letter from Andress Law Firm notifying you of the court date and time. Attendance at your creditors meeting is mandatory, and you must bring your original driver’s license and Social Security card. We will be there with you. The trustee will swear you in, turn on his or her tape recorder and ask you a series of specific questions that you must answer truthfully, under oath. The meeting usually lasts about five to 10 minutes, and after the meeting is concluded, you are free to leave.

Plan payments to the Chapter 13 trustee are due 30 days after the case is filed and direct payments to secured creditors are due on the next due date after the case is filed. Failure to make these payments could result in the dismissal of your case or the lifting of the automatic stay that protects your property.

After the creditors meeting, the trustee will usually want some additional documentation. If so, you will need to provide that information to me so I can turn it over to the trustee. Also, you must turn over all check stubs and all proof of mortgage payments to my office until your case is confirmed. Failure to do so could harm your case.

There is a second hearing in Chapter 13 cases called a confirmation hearing. This is the hearing where the judge reviews your proposed payment plan for approval, or confirmation. Once your plan is confirmed, you just need to make sure that you timely make all of your payments in order to successfully complete your case. Between the confirmation hearing and your discharge date, you must complete your financial management course. Failure to complete your financial management course will prevent you from receiving your discharge.

Will I lose my tax refund?

Your tax refund is property of your bankruptcy estate and should be turned over to your trustee immediately upon receipt. In a Chapter 7 case, you will usually have to give up your tax refund for only one year. In Chapter 13 cases, your tax refund will go to the trustee during the entirety of your case (three to five years). The trustees use the tax refund money to distribute to creditors.

 

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Andress | Inzina
218 Rue Louis XIV, Suite A
Lafayette, LA 70508
Telephone: 337-347-9919
Fax: 337-541-2553
Andress | Inzina
343 N. Third Street, Suite 307
The Roumain Building

Baton Rouge, LA 70801
Telephone: 225-771-8220