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6151 Lakeside Dr.,  Suite 2100
Reno, NV  89511

Reno Bankruptcy Attorney

Stephen R. Harris, Esq.

“Providing Financial Protection for 46 Years”

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Frequently Asked Questions

Popular Question Categories

General Bankruptcy Questions

Chapter 13 Bankruptcy

Chapter 7 Bankruptcy

Creditor Harassment

Discharge of Debts

Marriage & Divorce

Choosing The Best Type of Bankruptcy 

Property & Income

Consequences of Bankruptcy

General Bankruptcy Questions

Q.: Can my creditors continue to contact me after I file bankruptcy?

It depends on the situation. Some secured creditors, for debts related to home and vehicle loans, will want to know if you intend to continue paying on your loan or if you are going to surrender the collateral instead. If you’ve retained an attorney, your attorney will be contacted about whether you plan to keep the home or vehicle. The majority of creditors with unsecured loans, such as credit card debt and medical bills, are not allowed to contact you again regarding that specific debt once you file bankruptcy.

Q. Will I lose all my property if I go bankrupt?

All states have bankruptcy exemptions that allow you to protect all or a portion of your property. If your exemptions do not cover the entire value of the assets you are claiming and you file under Chapter 7, you could lose whatever you could not exempt or you would have to pay the non-exempt value back to the bankruptcy estate. If you file under Chapter 13, you get to keep all your property, but your repayment plan must pay your non-priority unsecured creditors the value of your non-exempt assets (or, in other words, as much as they would have received if you had filed under Chapter 7).

Q. What if I forget to list a debt on my bankruptcy petition?

A debt that is not listed on your bankruptcy petition will not be discharged. Therefore, when in doubt about owing a creditor money, list that creditor, it’s better to be safe than sorry.

Q. What common mistakes do debtors make before filing for bankruptcy?

Some common mistakes made by debtors before filing bankruptcy include:

• Using their credit cards and cash advances to purchase items in the three months before filing bankruptcy. This will backfire. Although credit card debt is normally dischargeable, this debt may not be.

• Selling off an asset for less than market value or transferring assets out of their name to avoid the property going to the bankruptcy estate. All sales and transfers of property must be reported to the court in your bankruptcy petition and the trustee will ask about property transfers at the creditor’s meeting as well. The trustee may be able to void these transfers and then sell the property for your creditors’ benefit.

• Getting married right before filing bankruptcy. A marriage immediately before bankruptcy can have unintended consequences which might include the debtor not being able to file the same chapter anymore. Your spouse may not be on your debts, but he or she can affect your qualifications for filing Chapter 7, the shortest and simplest form of bankruptcy. It is best to consult an attorney if you plan on getting married right before filing bankruptcy.

• Many debtors wait too long to file bankruptcy. As a result, their situation changes and it affects their ability to file or maybe their ability to protect assets in the same way. Most attorneys who practice bankruptcy will tell you that the procrastinating debtor will end up in a worse situation as a result of procrastination. Bankruptcy is a fluid area of law and a case’s facts change at the worse times for the debtor. If you know you need to file bankruptcy and qualify at that moment, waiting might weaken your case. While some debtors’ situations require patience, the majority of cases are stronger when they first meet the requirements of a bankruptcy.

Q. What can I expect at a the 341 meeting of creditors?

One of the parts of the process of filing for a Nevada bankruptcy is something which is known as a 341 meeting. Named for the part of the US bankruptcy code which mandates that this meeting take place. This meeting is where the debtor’s identity will be verified and creditors will have an opportunity to find out more about the debtor’s assets as well as their level of debt. Your lawyer will be with you during the meeting and you will be prepared to the degree that you shouldn’t be too concerned or anxious.

However, attending a 341 meeting is mandatory if you’re seeking the protection of Chapter 7 or Chapter 13 bankruptcy in the state of Nevada. If you fail to attend this meeting or to supply the trustee who conducts the meeting with the appropriate paperwork, you’ll be denied the opportunity to have your debt discharged through this bankruptcy proceeding. It’s also important to remember that any statement you make during your 341 meeting will be under oath. Any false statements made during this meeting will not only bar you from receiving the protection that bankruptcy provides, but can also lead to penalties for perjury including fines and/or imprisonment.

Before your 341 meeting, you’ll have to provide your most recent tax return to the trustee. This document is necessary in order for your income to be verified. During this meeting with your creditors, they may ask about your income as well as what kind of assets you hold and what other debts you may currently be obligated to pay. If you have any kind of secured debt (such as a mortgage or auto loan), then these creditors may ask you how you plan to keep paying on these debts in order to retain the property which secures these debts.

Depending on the type of bankruptcy you’re filing and your individual circumstances, you may be required to have these assets liquidated by the trustee in order to partially pay your debts or you may be able to keep them through entering into a payment plan with your creditors. The exact details of your bankruptcy will be determined later when a bankruptcy judge examines your case and decides how your debts will be discharged.

In most cases, debtors can have most of or all of their debt discharged through a Nevada bankruptcy proceeding, though there are types of debt that cannot be dealt with through the bankruptcy courts. Regardless of the type of bankruptcy protection, you happen to be filing for, attending a 341 meeting is an absolute must and is a necessary step in seeking relief from your debts through the courts.

Q. Once a Chapter 7 or Chapter 13 case is completed, are there other requirements before I receive a discharge?

Before the discharge of your case, you must complete an instructional course in personal financial management from an approved agency, with limited exceptions. In a Chapter 13 case, if you owe domestic support obligations such as alimony or child support, you must also certify to the court you have paid all amounts due.

Q. Isn’t a “credit repair” company a better option than bankruptcy?

Some situations might call for a credit repair or consolidation choice as opposed to bankruptcy. If you make too much money to file a Chapter 7 or feel like you could pay off your debt without having to file bankruptcy, there are some good companies out there to help you. However, make sure you do your research before agreeing to a contract with certain companies as many debtors have found themselves worse off than they were prior to retaining a credit repair or management company. If you have awful credit and debt that you can’t pay off in a reasonable amount of time, there may not be any better options than the fresh start that bankruptcy provides.

Q. Is there a limit to how many times I can file for bankruptcy?

You can only file for Chapter 7 once every eight years and you are allowed to file for Chapter 13 more frequently than that if necessary.

Q. Is it true that I can’t file for bankruptcy since the new law went into effect?

This is not true. In fact, nearly everything that could be done under the old law can be done under the new law.

Q. Is it true that a corporation cannot discharge its debt in a bankruptcy?

Yes, but the trustee in a Chapter 7 bankruptcy closes the business and sells the assets.

Q. I’ve heard that I have to take an approved credit counseling course before I can file bankruptcy. How do I find one? How long does it last? Do I have to follow the counselor’s recommendations?

A. The requirement of credit counseling and debtor education classes is not difficult to fulfill. Every person who files bankruptcy is required to take two classes. The first class, to be taken prior to filing, is called Credit Counseling. It focuses on your personal debt situation and gives you tips on how to balance your budget going forward. It is normally an hour long and can be taken online.

The second class, which can also be taken online, is called Debtor Education and it is a little more in depth. The class normally lasts two hours and attempts to educate you on debt management and how to avoid filing bankruptcy in the future. At the end of each course, you will be given a certificate that must be filed with the court to show that you have taken the required classes.

If you retain an attorney, your attorney should be able to assist you in finding an approved class. If you are filing on your own, you should have no trouble searching online for approved classes.

Class materials will not be looked at by attorneys or the court. You are not required to follow any recommendations, but you should be open to any tips and suggestions the counselor or class may have for you.

Q. How will I know when I need to file bankruptcy?

There are three common situations in which people decide to file for bankruptcy:

1. A creditor has taken action to collect a debt that threatens the individual’s livelihood. Examples include wage garnishments, vehicle repossessions, home foreclosures, or frozen bank accounts.

2. A traumatic event has happened that has dramatically reduced the person’s income or increased the person’s debts and bankruptcy is the best option to pick up the pieces. Some examples include divorce, long-term unemployment, serious medical issues, or the death of a family member.

3. The person has become overwhelmed with debt and has no reasonable prospect of improving his or her credit and debt situation other than filing bankruptcy, basically needing a fresh start.

Q. How often can I file for bankruptcy?

You can file Chapter 7 every eight years with the time starting at discharge (the end of your case) as opposed to the filing date. You can file a Chapter 13 four years after receiving a discharge from Chapter 7. If you previously received a Chapter 13 discharge, you cannot get another Chapter 13 discharge within two years. If you filed a Chapter 13 and want to file a Chapter 7, the wait time is six years from the Chapter 13 discharge.

Q. How long does a bankruptcy case take?

A Chapter 7 case normally takes three to four months from filing to discharge. Cases can stay open longer if the bankruptcy estate recovers any assets, but the discharge will still arrive around the same period. The average for the length of a Chapter 13 bankruptcy is three to five years.

Q. How Does Bankruptcy Work?

Depending on the type of bankruptcy filed, whether you are attempting to either discharge or reorganize your debt. If you are filing a successful Chapter 7 bankruptcy, almost all of your debts will be discharged and you will not be responsible for any longer. The only debts that normally can’t be discharged are student loans, child support/alimony debts, some tax debts, and debts related to criminal matters. If you don’t qualify for a Chapter 7 bankruptcy your debts can still be reorganized by forming a payment plan that will last three to five years. In that period of time, creditors with priority will collect some or all of their debt from you; this is called a Chapter 13 case. Whether you file a Chapter 7 or 13 you will find instant relief from creditors. They are not allowed to attempt to collect on their debt the moment the case is filed. Therefore you will not have to worry about receiving harassing or unsolicited calls from your creditors while you are in bankruptcy.

Q. How do I know when my bankruptcy case is completed?

At the conclusion of an individual’s bankruptcy case, the court enters an order closing the case, and a copy of this order is sent to you. Unless the trustee has assets to distribute to creditors, case closing takes place rather quickly in chapter 7 cases. In chapter 13, the court will not close the case until after you finish making payments under the plan or the court dismisses the case. A court will dismiss your case if you do not make payments to the trustee on time.

Q. Filing for bankruptcy seems overwhelming, is the process really that difficult?

It really isn’t. The process is fairly straightforward, but it can be difficult to understand at times since most people haven’t had experience with the bankruptcy proceedings before. It does require attention to details, timing, and gathering all the pertinent information. That is why it is highly recommended that a person hires the services of an experienced bankruptcy attorney who also knows Nevada law.

Q. Do you have to have a certain amount of debt to file?

In Chapter 7, you do not need a certain minimum amount of debt to file a bankruptcy. In Chapter 13, there are debt ceilings for unsecured and secured debt that you must not exceed.

Q. Do I need a lawyer to file for bankruptcy?

You are not required to retain an attorney to file a bankruptcy. Many filers file “pro se” or on their own. A percentage of these filers will have issues that they may not be prepared for and they might end up retaining an attorney or wishing that they had. Bankruptcy can be a complicated process that makes it very hard for a non- attorney to navigate through without trouble or confusion. Some cases are simple and an attorney may not be needed to the same degree.

As a general rule, you will probably benefit from having an attorney if you are going to file under Chapter 13 or if you have a complicated Chapter 7 case (e.g., you must complete the Means Test or you have significant non-exempt property or one or more of your creditors allege fraud). The best option is to consult with an attorney and see what type of case you have.

Q. Can I sell or give away my assets before I file bankruptcy?

There are of course rules against this. Any sale, gift, or transfer of an asset must be disclosed in the bankruptcy filings if it was made within two years of filing. There are also state laws that allow a bankruptcy trustee or creditor to go back four years to recover assets.

Q. Can I keep using by credit cards if I’m planning to file for bankruptcy?

You should not continue to use your credit cards once you make the decision to file a bankruptcy. The court has implemented a 90-day presumption of abuse on all credit card debt, which means any charges made on your credit card 90 days prior to filing are considered fraudulent by the court and those particular debts may not be discharged.

Q. Can I change from one chapter of bankruptcy to another? Why might I want to do so?

A. Yes, many people convert their cases from Chapter 13 to Chapter 7. Normally, a person might choose this option if he or she can no longer afford the Chapter 13 monthly payment. If that occurs and the person is able to qualify for Chapter 7, then this will be the best option. These situations can occur for different reasons, but the main one is normally suffering a loss of income during the timeline of the Chapter 13 bankruptcy.

Once it becomes impossible to make the payment, the debtor will be better off converting to Chapter 7 and ensuring that the initial filing was not for nothing. Some debtors may have initially filed a Chapter 13 to save their property and something occurs to change their minds later on. If that happens and they qualify for a Chapter 7, it is smarter to convert than stay in Chapter 13.

Conversion from Chapter 7 to Chapter 13 is usually forced by the court. The most common reason this occurs is that the court finds the debtor does not qualify for Chapter 7 because he or she has too much income. If the debtor was not truthful on his or her petition or attempted to abuse the system, the case could be converted into these situations as well. Occasionally, a debtor converts from Chapter 7 to 13 because the debtor did not realize how much he or she would have to pay to retain non-exempt assets in Chapter 7. If the trustee doesn’t object, the conversion should be possible.

Q. Can creditors object to my filing for bankruptcy?

Yes, creditors can object to your bankruptcy filing. Their objections will normally be to oppose their debt being discharged by the bankruptcy court. They would have to prove that your debt is non-dischargeable or that you engaged in a fraudulent act that makes the debt unable to be discharged.

Q. Are my assets protected if they are in my living trust?

A revocable living trust created by you does not provide relief against your own creditors.

Chapter 13 Bankruptcy

Q. Will I need to go to court?

You will have to attend the 341 meeting of creditors presided over by the trustee. You will also have to attend a confirmation hearing at which you ask the bankruptcy court to approve your repayment plan. Outside of that, there are certain situations where a debtor will have to attend court, but they are not common.

Q. Who qualifies to file for Chapter 13?

Any person can file a Chapter 13 as long as she has a source of income to fund a repayment plan and debts that are less than a specified amount which is adjusted periodically for inflation. As of 2016, your unsecured debts must be less than $383,175 and your secured debts must be less than $1,149,525.

Q. Who are the best candidates for Chapter 13?

The best candidates for Chapter 13 are people who can afford to be in Chapter 13. If they do not qualify for Chapter 7, then Chapter 13 is their only choice. Homeowners who want to save their homes are always in a better position to do so by filing a Chapter 13. If a debtor owes recent taxes or other taxes not dischargeable by bankruptcy, Chapter 13 will provide a more affordable and less stressful path to settle those debts.

Another debtor who is better off in Chapter 13 is one who will lose assets in Chapter 7. Chapter 13 will allow the debtor to pay them off during the timeline of their case, which will be much more affordable than if they attempted to do so in a Chapter 7 bankruptcy.

Q. What problems can arise at the creditors’ meeting?

Normally a creditors’ meeting in a Chapter 13 bankruptcy proceeds smoothly. Sometimes creditors attend and raise objections to your plan, especially secured creditors. You or your attorney (if you have one) may decide to negotiate with creditors over the objections. If you reach a compromise, you will need to modify your plan so that the creditors do not raise objections at the confirmation hearing.

Q. What is considered a reasonable expense during the life of a repayment plan?

In determining how much income you have each month to devote to your repayment plan, you are allowed reasonable expenses. Generally, reasonable expenses include any normal expenses made during daily life that a debtor needs. This can range from grocery bills and pet food costs to car payments and health insurance.

In general luxury items or services are not considered reasonable. For example, gardening services may be considered a luxury and thus not allowed. Loan payments for a luxury car will be reduced to the level of a standard car. Voluntary contributions to a retirement plan are generally not allowed unless you are approaching retirement age.

Q. What is Chapter 13 bankruptcy?

Chapter 13 bankruptcy is a plan that allows the debtor to reorganize his or her debt. Debtors with regular incomes can develop a plan that pays all or a portion of their debts back to the creditors in a defined time frame, which normally is anywhere from three to five years.

Q. What happens if I fall behind in payments after filing a chapter 13 case?

The terms of a confirmed plan legally bind you and each creditor. If you have an unexpected financial problem during your Chapter 13 case, you should immediately consult with your attorney. It is often possible to deal with changed circumstances by amending the chapter 13 plan. It is sometimes possible to add debts that you incurred after filing chapter 13 to the plan so that they will be discharged with other debts at the completion of the plan.

Q. What happens if I fall behind in making my plan payments?

Your case can be dismissed if you fall behind in payments or your case could be converted to Chapter 7. The dismissal can happen very fast so it is best to keep up with the payments.

Q. What happens after I file for bankruptcy?

Upon filing the Chapter 13 petition, your creditors are not allowed to collect from you unless authorized in the bankruptcy payment plan or if they receive permission from the bankruptcy court. You will have to file a payment plan, which the court will confirm. You will immediately be required to begin making monthly payments to the trustee based on the plan. This payment will be required every month for the duration of the bankruptcy.

Q. What does the Chapter 13 trustee do?

The trustee oversees the Chapter 13 case. You make your monthly payments under your plan to the trustee who disburses the money to the creditors.

Q. What documents do I need to file in a Chapter 13 bankruptcy?

Most debtors will be required to provide bank statements for the previous three to six months, their last three or four tax returns, proof of income from pay stubs for the previous six months, and any titles/deeds for property owned.

Q. What debts must be repaid in Chapter 13?

Priority claims are unsecured debts that must be repaid first in Chapter 13. Back taxes incurred in the last three years and child support arrearages owed to a child or ex (not a government agency) are the most common priority debts that must be paid in full.

Your Chapter 13 repayment plan must also provide that you will stay current on your secured debts that will last longer than your plan (e.g., mortgage). During the life of the plan, you must also pay off any arrearages you owe.

All other secured debt must be paid in full under the plan. Examples are tax liens and car loans.

Your plan must propose payments to your non-priority, unsecured creditors (credit cards, medical bills, lawsuit judgments, etc.) that are at least equal to the value of your nonexempt property. In other words, your creditors must receive at least as much as they would if you had filed under Chapter 7.

If you are incapable of paying these mandatory debts during your plan, you may have to give up some property. Alternatively, you will need to reduce your living expenses.

Q. What can I expect at the 341 meeting of creditors?

The meeting is rather informal and lasts about 15 minutes normally. You will be under oath and are required to attend. No judge will be present. The trustee will review your paperwork, especially your proposed plan. The trustee will want to make sure your plan meets legal requirements and that you have sufficient income to make the payments. The trustee will also want you to confirm that you have filed tax returns for the preceding four years.

Q. What are the most common reasons for choosing Chapter 13 bankruptcy?

The most common reason for most debtors filing Chapter 13 is that they have too much debt and make too much money to file Chapter 7. Chapter 7 has an income requirement; there are no such requirements in a Chapter 13 bankruptcy. Another common reason for filing Chapter 13 is to prevent foreclosure and save your home. Lastly, many debtors file Chapter 13 to be able to keep assets they can’t fully protect (assets that are not exempt and could be liquidated to pay creditors) if they filed a Chapter 7.

Q. What are the key events in the Chapter 13 bankruptcy process?

Some key events in the Chapter 13 bankruptcy process include the 341 meeting of creditors, the confirmation plan hearing, and any objections a creditor might make to the plan in question. Outside of those situations (and others that could come up in more specific settings), the most important event is ensuring your monthly payment to the court is made on time every month.

Q. What are the disadvantages of a Chapter 13 filing?

The biggest disadvantages to Chapter 13 are that it takes a long time and it costs significantly more money than Chapter 7 in most situations.

In addition:

• You must pay a trustee’s commission of roughly 10% of the plan disbursements over the three or five-year life of the plan.

• Attorney’s fees are higher for Chapter 13 than for Chapter 7.

• For the duration of your payment plan, the bankruptcy court will review your financial life.

• If your income or assets increase during the plan, creditors can seek increased payments.

• If you fail to make a payment, the trustee and creditors can seek to dismiss your case and thus block your discharge.

Q. What are the advantages of a Chapter 13 filing?

Some advantages of Chapter 13 are:

• It allows you time to repay creditors so you ensure you can keep all your assets as long as you fulfill the terms of your repayment plan.

• It allows you time to work out a mortgage modification and catch up on any delinquent mortgage payments so you can save your home.

• If you have multiple mortgages and your home is worth less than your first mortgage, you can use Chapter 13 to convert the additional mortgages to unsecured debts which don’t have to be repaid in full.

• Some types of secured claims can be modified. For example, if you owe $12,000 on a car now worth$9,000, you can reduce the amount owed $9,000 and pay it off over the life of the plan so long as the car was purchased more than 2-1/2 years before your bankruptcy filing.

• If you have an unincorporated business, you may continue to operate your business but include the business’ debts in your Chapter 13 plan.
• Cosigners are protected by your automatic stay.

• It tolls interest on back taxes owed so you can better afford to make those monthly payments.

Q. How long will it take?

The Chapter 13 process is normally three to five years. The length of time depends on your income as debtors with family incomes below the median income for their state normally make payments for three years only, while debtors over the median income make payments for five years. There are unique circumstances that can shorten that timeline, but most cases last three to five years.

Q. How does a Chapter 13 repayment plan work?

The court must approve your repayment plan at a plan confirmation hearing and you must make payments on a regular basis to the trustee. The funds received by the trustee are then dispersed to the creditors. The plan allows for some creditors to be paid less than what they are owed. Most unsecured creditors fall into this category. Secured debts, such as loans for cars and homes, must be paid on a regular basis at the regular amount unless certain situations apply.

Q. How does a Chapter 13 case help me with my secured debts?

In chapter 13 you must pay your home deeds of trust loan in full. The good thing is that this type of filing gives you time to pay this off over the original term of your deeds of trust. You must pay any overdue payments over the course of the three to five-year plan, but you must make your regular monthly payments on time. This means that if you were behind on your mortgage payments when you filed for bankruptcy, you will be making a larger payment during your plan to make up for the past due debt.

You will not be allowed to reduce the interest rate on your deeds of trust loans. If you took out a loan to buy a car for your personal use within 910 days (approximately 2.5 years) before you file for bankruptcy, you must pay that loan in full in your chapter 13 plan. If you gave any other property to a lender as collateral for a loan that you obtained within a year before filing for bankruptcy, you must also pay that loan in full in your chapter 13 plan. You may be able to reduce the interest rate and thereby lowering your payment amount somewhat on these secured debts.

Q. Can creditors object to my repayment plan? What are the most common objections?

Yes, creditors can object to your repayment plan. The most common objections include:

• Your plan was not proposed in good faith.
• Your plan is not feasible.
• Your plan does not commit all your projected disposable income to pay creditors.
• You do not pay your creditors as much as they would receive in a Chapter 7 liquidation.
Your plan does not properly treat creditors’ claims according to their priority.

Secured creditors might also make minor objections to your plan: your proposed interest rate is too low, the schedule takes too long to pay your arrearage, or, if you are proposing a cram down (a reduction in debt to the value of the property securing it), that the value you assigned the collateral is wrong.
If they object, there will be a hearing where the judge will make the final decision on whether the objection should be sustained or overruled.

Chapter 7 Bankruptcy

Q. Will I need to go to court?

Usually you will not have to appear in a courtroom before a bankruptcy judge. However, you will have to attend the 341 Meeting of Creditors, which is typically held in the trustee’s offices or a conference room.

Q. Who can qualify for Chapter 7?

The majority of people who qualify for Chapter 7 are debtors whose household income is at or below the median income level of their state. If your income is higher than the median for your state, you will have to go through the Means Test. The Means Test will determine if you can qualify for Chapter 7 or need to file a Chapter 13. The Means Test can be complicated and an attorney’s help might be needed in that situation.

Q. Who are the best candidates for Chapter 7?

There are numerous people who make great candidates for Chapter 7. The most common candidates have income at or below the median income for the state they are filing in so that they automatically qualify for Chapter 7. People who have been laid off or out of work for a while are also great candidates as they will have an easier time qualifying. Debtors who are going through a divorce or have recently been divorced make good candidates due to the change in income that normally occurs after a divorce. People who have been through costly medical issues or lost income due to an injury are normally good fits for Chapter 7. Other good candidates include:
• Debtors who have had cars repossessed.
• Debtors in foreclosure or already foreclosed on.
• Debtors currently being sued by creditors or who already have been found liable for the debt by the court.
• Debtors who may not have lost their jobs but have lost income due to a pay cut or taking a different job.
• People in need of financial fresh start.

Q. What should I expect at the Meeting of Creditors?

A. The 341 Meeting of Creditors is a key event in a Chapter 7 bankruptcy. You are required to appear at the meeting before the trustee appointed by the court. Your creditors are given notice of the meeting and may attend, although seldom do.

The creditors’ meeting typically occurs about a month after you file. The trustee will place you under oath and ask you some questions. The atmosphere is less formal than a trial. The judge is not present and no one will cross-examine you.

Most debtors are only in front of the trustee for five to ten minutes. Typically, the trustee will ask you whether the information you provided in your bankruptcy paperwork is correct and whether anything has changed since your filing. The trustee may ask you if you have listed all your property and provided accurate values for each item. The trustee may ask how you arrived at the values you listed for your assets. The trustee may also ask you to affirm that you have not transferred money or property improperly to a third party to shield it from creditors.

The trustee will also ask questions designed to discover if you are expecting to receive any money or assets that are property of the bankruptcy estate and could be used to pay creditors. Some examples include life insurance proceeds, inheritances, and money awarded in a recent lawsuit. The trustee will also state a claim for any assets that are not exempt. Most Chapter 7 filers do not have any non-exempt assets. Your attorney should prepare you thoroughly for the meeting so you are ready to answer the trustee’s questions.

Q. What problems can occur at the meeting?

The vast majority of meetings go smoothly. When problems do arise, they usually fall into these categories:

1. Transfers of cash or property to family members or friends within two years before filing. Pre-filing transfers for less than the property is worth is often treated as fraudulent. The trustee can seize the property and sell it to pay creditors.

2. Large payments to one creditor near in time to the petition filing. The trustee does not want one creditor favored over another, and so may redistribute large payments made prior to filing. If you borrowed money from family and have made loan payments, the trustee can force the recipient to give up the payments. The money is then distributed to creditors.

3. Loan application values differ. If you or a loan broker pumped up asset values on a loan application, a creditor could ask you some embarrassing and troublesome questions. Blaming the loan broker will not get you past the fact that you signed the application.

4. Challenges from the US Trustee regarding Chapter 7 eligibility. The biggest problem will be if the United States Trustee, not to be confused with the Chapter 7 Trustee, shows up and challenges whether you belong in a Chapter 7 case. While your attorney should be aware of a situation like this prior to the meeting, there are cases where you will have to answer numerous questions and provide a large amount of documentation to ensure that you are in the correct chapter.

5. Creditors show up. A creditor may show up to ask additional questions. While it may be harmless in the long run, it can be stressful at that moment to have to answer questions from someone you owe money to.

6. Unprepared debtor. Another common problem that occurs is a debtor not being prepared for being told that he or she owes money for an asset or that the trustee is going to seize an asset. A good attorney will have you prepared for this type of incident.

Q. What other problems can occur in a Chapter 7 bankruptcy?

Other problems that can arise can include adversarial proceedings brought by creditors to recover fraudulent debt, trustees seizing property, or cases not closing on time because the debtor has not completed the required debtor education course. Audits occur in a small percentage of bankruptcies. If you have an expensive home but put a low value on your furnishings, the trustee may send an auditor to your home. A random audit may require you to submit bank statements with explanations of large deposits and withdrawals.

A creditor may challenge your discharge if you went on a spending spree prior to filing. Maybe you took an expensive vacation or bought some price personal items. Creditors can challenge these debts.

Occasionally a purchaser of your debt may try to collect post-bankruptcy. Sometimes a lender will refuse to grant a loan unless you can prove that a prior debt was discharged in bankruptcy. Providing a copy of your discharge letter and petition will usually resolve these issues.

Q. What is the Means Test?

A. The Means Test was designed by Congress to prevent people who are capable of repaying at least a portion of their debts from filing under Chapter 7. You or your attorney will complete a form called Statement of Current Monthly Income and Means Test Calculation, which will analyze your income and permitted deductions from your income to determine what can be paid to creditors.

This form examines your average income from all sources for the last six months. If both you and your spouse are filing for bankruptcy, both of your incomes are counted. If only you are filing, your spouse’s income will be included subject to some setoffs.

Q. What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is a process that when completed will discharge (eliminate) all of your debts that are eligible for discharge. It is the most common type of bankruptcy relief. You are telling the Court that you are unable to pay your debts and need assistance from the court. Chapter 7 is normally a quick process and eliminates the vast majority of debts including credit cards, medical bills, repossessions, foreclosures, utility bills, cash advances, and loans.

Most student loans are not dischargeable and some tax debts might not be as well. You also cannot discharge alimony and child support payments. You are required to list any assets you own on your bankruptcy petition. Every state has different bankruptcy exemptions that serve to protect your assets from creditors. On filing your petition and attending the meeting of creditors, your case will close and your debts will be discharged.

Q. What happens after I file Chapter 7 bankruptcy?

An automatic stay issues, which is a court order forbidding your creditors from contacting you. This means the collection calls and letters will immediately cease.

This relief comes with a pitfall. If you want to stay current on a particular debt, say a car loan, you will no longer receive a monthly statement reminding you to make the payment. You will need to set up your own reminder system for each debt you want to continue timely paying.

You will get notice of your 341 meeting, which should be scheduled 4 to 6 weeks after you file. Upon completing the process, your debts will be discharged and you will have a fresh start.

Q. What does the Chapter 7 trustee do?

The trustee is an official appointed by the court to oversee the bankruptcy case. The trustee’s job is to represent the interests of the creditors. The trustee runs the 341 Meeting of Creditors. If you have any non-exempt assets, the trustee collects them and sells them for the benefit of your creditors.

Q. What documents do I need for a Chapter 7 bankruptcy?

If you retain an attorney, your attorney will let you know what is required. Most courts require proof of income (pay stubs) for the last three months prior to filing. Your tax returns for the last three years are usually required as well. The majority of trustees will also want to see your bank statements for the last three months prior to filing. If you own a car, you are normally required to show your title and proof of insurance. Divorce decrees are normally required if you are recently divorced. You will also need to bring your social security card and driver’s license to the creditor’s meeting.

Q. What are the most common reasons for filing Chapter 7?

Some of the most common reasons for filing Chapter 7 include loss of income, unemployment, medical debt, divorce, foreclosure, and issues with spending.

Q. What are the key events in a Chapter 7 bankruptcy?

Some key events in Chapter 7 include the date of filing, the 341 meeting of creditors, and the discharge date. The filing date is important because the bankruptcy process doesn’t start until that point and no debts can be discharged that are accrued after that date. The meeting of creditors is the only time you will normally be required to attend a hearing and is where creditors have a chance to confront you (although that is a rare occurrence). The discharge date is important because your creditors cannot object after that date to the discharge of the debt. It is also important because you will receive an order of discharge to keep as a record.

Q. If I file a Chapter 7 bankruptcy for my corporation will it discharge my personal guarantees?

No, you would need to file personal bankruptcy usually Chapter 7 or 13 depending upon which you can qualify for.

Q. How long does a Chapter 7 Bankruptcy take?

The Chapter 7 process normally takes 3 to 4 months to be completed. If you are required to make payments to the court, the process can be significantly longer, but your discharge will be entered at the normal time.

Creditor Harassment

Q.: Can my creditors continue to contact me after I file bankruptcy?

It depends on the situation. Some secured creditors, for debts related to home and vehicle loans, will want to know if you intend to continue paying on your loan or if you are going to surrender the collateral instead. If you’ve retained an attorney, your attorney will be contacted about whether you plan to keep the home or vehicle. The majority of creditors with unsecured loans, such as credit card debt and medical bills, are not allowed to contact you again regarding that specific debt once you file bankruptcy.

Q. What if a credit card company calls after I file a Chapter 7 case?

It may just be disorganization on their part. Tell them you have filed a chapter 7 bankruptcy and kindly instruct them to not call again.

Q. What creditors can get the stay lifted and how do they do so?

A. Any creditor with a secured debt can file a motion with the bankruptcy court to have the automatic stay lifted. If you own a home or vehicle and are not making payments, creditors have the right to secure their collateral if they are not being paid. Lifting the automatic stay allows them to do that. Outside of a situation like that, most creditors would not be able to have the stay lifted unless they were collecting on a fraudulent debt or a debt that was unable to be discharged.

Most mortgage companies will file this motion if they are in the process of foreclosing on your home. If you are in the process of eviction, landlords can file a motion and have their issue heard very quickly. The automatic stay is not impenetrable and can be lifted under the right circumstances.

Q. What can I do if a creditor continues to make demands for payment of their debt even after I have filed bankruptcy?

If you have an attorney, notify him or her immediately and your attorney will resolve the situation. You can try warning the creditors once and making sure they have notice of the bankruptcy filing. If the creditor continues to harass you, you can sue the creditor for violating the automatic stay.

Q. How will my creditors know that I have filed bankruptcy?

Your creditors will know that you filed bankruptcy because you are required to list all creditors, along with their contact information, on your bankruptcy petition. There is a schedule in the petition specifically for listing creditors. If you forgot to list any the petition, you will want to amend your petition and add the missing creditors to ensure they are aware of your filing. All creditors who are listed on a bankruptcy petition receive a notice from the court informing them that the debtor who owes them money has filed bankruptcy.

Q. How much can a creditor attach of my wages with a judgment?

The “applicable nonbankrupt law” of the federal Consumer Credit Protection Act, 15 U.S.C. sections 1671 – 1673, protects 75% of net pay from garnishment. NRS 21.090 provides that 75% of an individual’s net pay is exempt from execution unless the order is for the support of another person or for any debt due for any state or federal tax.

Q. How long does the automatic stay last?

The automatic stay lasts for the entire duration of an open bankruptcy case unless a creditor has filed for a motion to lift the automatic stay and that motion has been granted by the court.

Q. How long after I file bankruptcy will my creditors stop calling me?

A. Your creditors should stop contacting you almost immediately upon filing. Most of them will receive notice electronically, so a 24 to 48-hour window should be the most given to creditors to update their records and cease the phone calls. If you receive a call or letter from a creditor asking for money, report that to your attorney immediately as it is a violation of the automatic stay imposed by the court upon filing bankruptcy.

Q. How does the automatic stay stop foreclosures and repossessions?

If you file a bankruptcy prior to the sale date in foreclosure or before the creditor has repossessed your vehicle when you are behind in payment, the automatic stay keeps you in your home or vehicle for the duration of the bankruptcy or until the creditor files a motion to lift the automatic stay and the court grants the motion. Unless a motion to lift the automatic stay is filed, you will be able to maintain possession of your property and work on settling with the creditor so you can keep the debt.

The foreclosure or repossession situation will freeze immediately upon filing and the only ways a creditor can proceed with the foreclosure or repossession will be to wait until your case closes or file a motion with the bankruptcy court and get it to lift the stay.

Q. How does the automatic stay stop evictions?

The automatic stay will freeze the eviction process and buy you time in your home as long as you file before you are fully evicted by the landlord. If you have received an eviction notice, but have yet to go to court or a court hasn’t ruled on your issue yet, you can still file bankruptcy and buy some time to either settle with the landlord or get your affairs in order so you are able to move. It will only buy you so much time though.

The bankruptcy court will hear motions to lift the automatic stay in eviction situations much quicker than in the normal process. Once the automatic stay is lifted, the eviction process can resume. If the landlord has already obtained a judgment of possession or is trying to evict you because of drug use or endangering the property, the automatic stay will not help you.

Q. How does bankruptcy stop my creditors from harassing me?

Filing bankruptcy is the best way to stop creditor harassment. As soon as your case is filed, creditors are not allowed to contact you for the duration of the bankruptcy unless they receive permission from the court. If you are in the process of filing bankruptcy and have an attorney, then you can tell any creditors who are contacting you that you are going to file and give them your attorney’s information so they can verify that you are indeed going to file bankruptcy soon.

If you are not filing bankruptcy and can no longer stand the harassing phone calls from the creditors, you can write creditors a letter asking them to no longer contact you unless it is through the mail only. They are required, upon receiving written notification, to stop calling immediately.

Q. Are all creditors and debts subject to the automatic stay, or are there exceptions?

There are very few exceptions to the automatic stay. The collection of child support and alimony can continue. The IRS can demand payment of taxes, but can’t seize property or income or place a lien on the property. Money can still be withheld from a paycheck to repay a loan from an ERISA retirement plan.

Discharge of Debts

Q. Will my student loan go away in bankruptcy?

Absent an undue hardship that is very difficult to establish, the answer is simply no.

United Student Aid Funds v. Espinosa decided 12-1-09 set forth those very difficult guidelines.

Q. Will my debt to the IRS go away in bankruptcy?

Generally, not. Tax liabilities can be paid over a period of time usually up to 60 months in Chapter 13, and certain older taxes may be dischargeable under certain circumstances.

Q. Will all my medical bills go away in bankruptcy?

Absolutely yes.

The issue is when do I file bankruptcy, trying to make sure my medical condition has been resolved.

Q. Will a judgment against me be discharged in bankruptcy?

A judgment will normally be discharged, but you cannot argue about the amount of the debt. If the judgment is recorded in the county in which you have a home, it will be a lien against your home and that makes it more expensive to remove in the bankruptcy court. Removal of a non-consumer judgment recorded on your residence is a realistic option. Even more awful, is if you have signed a confession of judgment or stipulated judgment, your homestead exemption will not allow that judgment recorded against your residence to be removed.

Q. Which debts are not discharged in bankruptcy?

These debts cannot be discharged in bankruptcy:

• Child support and alimony are not discharged. Other debts related to divorce cases are very often not able to be discharged due to court orders.

• Taxes that were due less than three years before you filed for bankruptcy. In addition, any tax debts related to fraud or withholding information cannot be discharged. Credit card debt used to pay tax debt is non-dischargeable as well in Chapter 7.

• Debts that arise due to criminal activity cannot be discharged. Government fines penalties cannot be discharged.

• Personal injury debts that arose from a DUI case cannot be discharged.

• Debts that are not listed in your bankruptcy papers may not be discharged in most situations and debts that the creditor objects to being discharged (usually because of fraud) will also not be discharged if the court agrees.

• HOA fees and similar type fees accrued after filing Chapter 7 cannot be discharged in a Chapter 7 bankruptcy.

• Student loans are not dischargeable, outside of extremely unique situations.

Q. Which debts are discharged by bankruptcy?

The most common debts discharged by bankruptcy are unsecured debts, such as:

• Credit card debts;
• Cash advances;
• Medical bills;
• Legal judgments;
• Collection accounts; and
• Personal loans not secured by any property.

Secured debts are also dischargeable. Some examples of secured debts are home loans, home equity loans, vehicle loans, and loans extended by retailers so that property, such as electronics, appliances, and furniture, can be purchased in installments. With secured debt, the debt will be discharged but the creditor can take possession of the secured property. To keep the property you will need to keep up with the payments and probably sign a reaffirmation agreement. Or, in Chapter 7, you may be able to redeem the property (buy it back) from the trustee for its replacement value.

Other debts that can be discharged range from most fees related to services (attorney fees, installation fees, etc.) to fees related to landlord/tenant debt and bills related to utilities.

Q. What is the difference between secured creditors and unsecured creditors?

A “secured creditor” is a creditor that has a lien on an item of your property. A lien is an interest in property that allows a creditor to have your property sold to satisfy your debt to that creditor. Deeds of trust and car lenders are secured, creditors. They have voluntary liens on your property, meaning you voluntarily allowed the lien to secure the asset you purchased.

An “unsecured creditor” is a creditor who has no interest in your particular property. Most credit card issuers are unsecured creditors. Outside of bankruptcy, there are only two ways an unsecured creditor can get paid. First, you can pay the debt voluntarily; this is the way most of those debts are paid. The other way unsecured creditors get paid is much harder. They must sue you, get a judgment against you, and ask the sheriff to seize your particular property and sell it to satisfy the creditor’s claim. When the sheriff seizes your property for an unsecured creditor, that unsecured creditor has an involuntary lien and becomes a secured creditor for bankruptcy purposes. Even in bankruptcy, the secured creditor has greater protection because its lien on your property is usually honored; the bankruptcy does not remove it.

Q. What is the best way to make sure I list all my debt on the bankruptcy petition.

Get a credit report from all three credit reporting agencies. This may seem like overkill, however, you want to make sure you don’t fail to list all of your debts. Some debts you may have forgotten about because the creditor may not be actively attempting to collect the debt. The saying, “out of sight, out of mind” may be appropriate here. Remember a debt not listed will not be discharged in bankruptcy.

Q. What is debt settlement?

This is when a certain cash payment less than the debt owing is accepted by a creditor as full payment of the debt.

Q. What is a reaffirmation agreement?

A reaffirmation agreement is a document that keeps certain debts (normally secured debt like home and car loans) active post-bankruptcy. The creditor will send the agreement to your attorney if you retained one. This agreement, if signed by both parties and filed with the court prior to the case closing, would bind you to the debt and allow you to keep your home or vehicle as well as build credit back up. Most creditors do not require these agreements to be signed, but there are some (credit unions are a great example) who do require they be signed if you want to keep the collateral.

Q. What is a reaffirmation agreement and how does it help me?

A reaffirmation agreement is an agreement that you will pay a creditor’s debt even though the debt would otherwise be discharged in bankruptcy. Your creditor must agree to the reaffirmation, and the debt may be renegotiated, but most reaffirmation agreements simply require you to pay the debt as originally agreed. People usually reaffirm a debt so that they can keep the property that they gave as collateral for the debt. Thus, most reaffirmation agreements deal with secured debts, and Chapter 7 debtors enter them to keep the creditor from repossessing or foreclosing on the property securing the debt.

A reaffirmation agreement puts you under a legal obligation to repay the otherwise dischargeable debt. If you default on the payments required under the reaffirmation agreement, the creditor can repossess or foreclose on the property and seek a personal judgment against you. In order for a reaffirmation to be valid, you and your creditor must sign the agreement and file it with the court before you receive a discharge. In addition, either your attorney or the court must determine that the agreement does not impose an “undue hardship” on your family.

The Bankruptcy Code contains many other requirements for reaffirmation agreements. If you and your creditor do not comply with all the requirements for a reaffirmation, the agreement may not be binding. In that event, you would have no personal obligation to make payments under the agreement. As a rule, you should think very carefully about whether to reaffirm a debt, as this limits your bankruptcy discharge.

Q. What do I generally get to keep if I file bankruptcy?

You get to keep your exempt assets such as equity in a car that is equal to or less than $15,000, household furniture equal to or worth less than $12,000, equity in a primary residence equal to or worth less than $550,000, one gun, and Individual Retirement Accounts or Qualified Retirement Plans with a value of equal to or less than $500,000. A full exemption list per Nevada Law is set forth at NRS 21.090, see Resources for the actual link to the full exemption statute.

All non-exempt assets like children’s cars, rental properties, tax refunds, rental deposits, money in bank accounts, and airline tickets will be listed as assets of the estate at fair market value.

Q. What do I do with my expensive jewelry in my Chapter 7 case?

Sell it and keep the receipt and a list of where you spent the proceeds from the sale. Then go get a cheap watch, however, your wedding rings are exempt.

Q. What are priority debts?

In a Chapter 7 case, priority debts are debts that must be paid first if you have non-exempt assets that the trustee can liquidate to produce money to pay your creditors. In a Chapter 13 case, priority debts must be paid in full through your repayment plan. Some examples are tax debts that accrued less than three years before filing; child support and alimony; and wages and commissions owed by employers.

Q. Under what circumstances can I discharge my student loans in bankruptcy?

Student loans are very difficult to discharge in bankruptcy. You must show that the payment of the student debt “will impose an undue hardship on you and your dependents.” Typically, this test requires you to show that you cannot maintain even a “minimal” standard of living if you have to pay your loans and this situation is likely to continue for a significant part of your repayment term. Outside of these extremely unique circumstances, you will be unable to discharge student loans in bankruptcy.

Q. Does a bankruptcy get rid of a deficiency on my real property?

Yes, the contingent liability of a deficiency from a lender on either a short sale or a foreclosure is dischargeable if listed on your bankruptcy petition.

Q. Do I have to file for bankruptcy on all my debts and credit accounts or can I keep some open?

While certain debts can be kept post-bankruptcy filing, most credit accounts will close. Mortgages, vehicle loans, and installment payments for items such as furniture, electronics, and appliances can usually be kept by reaffirming the agreements with the bankruptcy court. A reaffirmation agreement means that the debtor and creditor will continue with the debt post-bankruptcy as if the bankruptcy never occurred. The majority of credit accounts, however, will be closed as soon as the case is filed. Creditors are automatically notified of the bankruptcy filing and have a strict policy that requires they close the accounts.

Q. Can I run up my credit cards before I file my Chapter 7 bankruptcy?

No, under section 11USC 523, consumer debts owed to a single creditor and totaling more than $500 for luxury goods or services incurred by an individual on or within 90 days before the order for relief under this title are presumed to be non-dischargeable. Cash advances of more than $750 that are extensions of consumer credit under an open-end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title are presumed to be non-dischargeable.

Q. Can I make payments on a discharged debt without a reaffirmation agreement?

Yes, you can voluntarily pay a debt. Often people voluntarily repay debts to family members or friends. However, the key to this kind of payment is that it is entirely voluntary; you have no legal obligation to pay a discharged debt, and the creditors can take no action to pressure or persuade you into making the payments.

Q. Can I make payments on a discharged debt if I haven’t signed a reaffirmation agreement?

Yes, despite not reaffirming the debt, you can still pay on a discharged debt and, in most situations, you will be able to keep the property associated with the debt as long as you stay current. If the debt was not secured, it would not be wise for you to pay on the debt and the creditor should not accept payment.

Q. Can I eliminate back income taxes by filing bankruptcy?

Yes, some back income taxes can be eliminated in a bankruptcy proceeding. Certain requirements must be met:

• You must have filed a tax return for the taxes in question at least two years before you filed for bankruptcy.

• The return must have been due at least three years before you filed.

• No fraud or intentional wrongdoing can be associated with the tax debt.

• The IRS or state tax authority cannot have assessed the taxes in the last 240 days from the date you filed for bankruptcy.

If the taxes are discharged, the taxing authority cannot go after your wages or bank account. But if it placed a lien on your real estate, the lien will remain and will need to be paid off when the property is sold.

Q. Are some debts dischargeable in Chapter 13 that are not dischargeable in Chapter 7?

The most common debts that can be discharged in a Chapter 13 bankruptcy, but not in a Chapter 7 bankruptcy are marital debts that arose out of a divorce or marital settlement agreement. While you can’t discharge credit card debt used to pay the tax debt in Chapter 7, you can discharge the same type of debt in Chapter 13. HOA fees and similar types of fees can be discharged despite accruing after the filing date in Chapter 13. Debts that were unable to be discharged in a previous filing can also be discharged in Chapter 13.

Marriage & Divorce

Q. If we are thinking about a divorce, is it better to file for bankruptcy before we get divorced or wait until after the divorce is final?

Every situation is different and the circumstances must be evaluated to determine if it is better to file divorce prior to or after bankruptcy. Certain issues that help determine when it is better to file include the following:

• Child support & alimony can increase household income for a party, which might make it more difficult to file Chapter 7 after being divorced. In those situations, filing before the new income is established can save the debtor thousands of dollars.

• If both parties are hotly contesting the marital debt, it might be best to wait until after the divorce to determine what each party will be responsible for.

• Divorce may create some debts that are not dischargeable: child support and alimony are the obvious debts, but judge-ordered debt payment to the former spouse for marital debt or attorney fees might not be dischargeable, at least in Chapter 7.

Outside of these types of situations or any situation where a lump sum payment is received by one of the parties (such as a portion of an ex’s retirement account), the timeline between divorce and bankruptcy does not matter. The debts owed by each party will always be their debts unless they are discharged.

Q. If our divorce decree made my spouse responsible for some of our debts, can my spouse discharge those debts in bankruptcy? Can the creditor then come after me? And if I pay the debts will I be unable to get reimbursement from my spouse?

While your spouse will be able to discharge the debt in bankruptcy as it relates to the creditor that was owed money, you can still sue him or her for violating the divorce decree. Creditors can come after any party who signed an agreement to borrow money from them. As a result, the creditor can still come after you, even if your ex was ordered to pay that specific debt. If you (the spouse who was supposed to be relived of the debt by the divorce) pay the debt, you can sue your former spouse to reimburse you for any payments made on the debt he or she was obligated to pay.

Q. Can my spouse and I file for bankruptcy together if we are in the process of getting a divorce? Can we use the same lawyer?

Many spouses file bankruptcy prior to their divorce. The most common reason is that they save money by filing together (most firms charge less for a joint bankruptcy than they do for two separate cases). It might also simplify their divorce proceedings by eliminating any arguments stemming from debt accrued during the marriage. Both parties can use the same lawyer whether they decide to file together or not.

Q. What are some situations in which filing a joint bankruptcy with my spouse would be beneficial?

Some reasons to file jointly with your spouse include:

• If most of your debts are joint, filing together will eliminate these debts. If just one of you files, the other spouse will still be liable on joint debts and on his or her separate debts.

• Every state uses its own bankruptcy exemptions or federal exemptions, which allow you to keep certain types of property up to certain values when you file under Chapter 7. In some states, when you file jointly, these exemptions are doubled so you have twice the amount of exemptions to protect your assets. This can be beneficial to certain couples so they don’t lose assets or owe money in their bankruptcy.

• If any debts are joint, exemptions that protect the non-filing spouse’s shared assets with the filing spouse may not be permitted and the spouse will be better off filing in those cases.

Q. What are some situations in which filing a joint bankruptcy with my spouse might not be a good idea?

Some reasons not to file jointly with your spouse include:

• You are solely legally responsible for most of the debts. You can file alone to eliminate your debts and your spouse will preserve the option to file bankruptcy later should the need arise.

• Your spouse owns a significant amount of nonexempt separate property. If you file alone, your spouse’s separate property is not available to creditors in your Chapter 7 bankruptcy.

• You live in a state that excludes property held in tenancy by the entirety from the bankruptcy when only one spouse files. If you and your spouse own your home as tenants by the entirety, you may be able to keep it if only one spouse files. If you file jointly under Chapter 7 and the homestead exemption doesn’t cover your equity, you might lose your home.

• You live in a community property state and your state’s law provides that community debts are discharged even when only one spouse files. As long as you remain married, creditors of the discharged debts cannot get at community property. However, the separate debts of your non-filing spouse will not be discharged.

Q. If my spouse files for bankruptcy and I don’t, how will my spouse’s bankruptcy affect me and my credit?

Unless the debt is shared between spouses and negative history has stained that specific debt, then the credit of the non-filing spouse should not be affected. Bankruptcy affects married couples in a different way. Some spouses need the other spouse to gain credit for certain items, such as a house or car, and the filing spouse’s bankruptcy history could affect the loan early on after discharge. If the non-filing spouse has no income or poor credit, the filing spouse’s bankruptcy history will hurt the non-filing spouse’s chances of getting a loan. It may mean some non-filing spouses will have to get credit on their own while the filing spouse’s credit gets some time to be repaired.

Q. If I file for bankruptcy, does my spouse have to file as well?

No, you are not required to file bankruptcy if your spouse files bankruptcy. However, it could be in your best interest to do so. If you share multiple debts with your spouse or have debt issues of your own, it might better to file with your spouse than to file later on your own.

Q. I am engaged. Should I file for bankruptcy before I get married? Will my spouse be responsible for my debts (or vice versa) if I get married?

Normally, it is a better option to file bankruptcy individually in situations where a marriage is pending. The reason for this is that the new spouse’s income does not have to be included in your means test until you are married. That makes it significantly easier to qualify for Chapter 7 and lowers your disposable income in Chapter 13.

In addition, bringing in another party could increase the assets you have to include. The only debts either party will be responsible for are the debts that both parties have signed an agreement stating they would be responsible for. Your new spouse will not be held liable for any debts that were accrued solely by you or vice versa.

Q. Does my spouse’s income affect my ability to file for bankruptcy even if my spouse does not also file?

Yes, this is one of the main causes of people having to file Chapter 13. Many people are under the assumption that if their spouse isn’t filing, then they don’t have to include their spouse’s income or shared assets when they file. This is a false assumption that can have severe consequences if not addressed right away. Although a spouse may not be filing, the non-filing spouse’s income is a part of the household and must be included in the household income gross that is calculated to see if the debtor qualifies for Chapter 7.

It is important to remember that some of the non-filing spouse’s expenses can also be included in the means test qualification. However, if you and your spouse are separated and living apart, then the income of your non-filing spouse does not have to be included. That is the only time the income of a spouse does not have to be included in the petition.

Q. Can my spouse and I file for bankruptcy together with a joint petition?

Yes, a joint petition is the recommended way to do things. It is usually a cost-effective strategy for spouses to file jointly. However, there are some circumstances in which both spouses do not need to file or individual cases may be a better option.

Choosing the Best Type of Bankruptcy

Q. Who are the best candidates for Chapter 7?

There are numerous people who make great candidates for Chapter 7. The most common candidates have income at or below the median income for the state they are filing in so that they automatically qualify for Chapter 7. People who have been laid off or out of work for a while are also great candidates as they will have an easier time qualifying. Debtors who are going through a divorce or have recently been divorced make good candidates due to the change in income that normally occurs after a divorce. People who have been through costly medical issues or lost income due to an injury are normally good fits for Chapter 7. Other good candidates include:
• Debtors who have had cars repossessed.
• Debtors in foreclosure or already foreclosed on.
• Debtors currently being sued by creditors or who already have been found liable for the debt by the court.
• Debtors who may not have lost their jobs but have lost income due to a pay cut or taking a different job.
• People in need of financial fresh start.

Q. Who are the best candidates for Chapter 13?

The best candidates for Chapter 13 are people who can afford to be in Chapter 13. If they do not qualify for Chapter 7, then Chapter 13 is their only choice. Homeowners who want to save their homes are always in a better position to do so by filing a Chapter 13. If a debtor owes recent taxes or other taxes not dischargeable by bankruptcy, Chapter 13 will provide a more affordable and less stressful path to settle those debts.

Another debtor who is better off in Chapter 13 is one who will lose assets in Chapter 7. Chapter 13 will allow the debtor to pay them off during the timeline of their case, which will be much more affordable than if they attempted to do so in a Chapter 7 bankruptcy.

Q. What are the main differences between Chapter 7 and Chapter 13?

There are many differences between Chapter 7 and Chapter 13 bankruptcies. The biggest difference is that Chapter 7 acts as a complete discharge of the debtor’s debts while Chapter 13 reorganizes the debtor’s debts. A large percentage of filers in Chapter 7 don’t have to pay any money to the court outside of their court costs and legal fees. Every filer in Chapter 13 will be required to pay something to the court.

Another big difference between the two chapters is the duration of the case. The vast majority of Chapter 7 bankruptcies are open for three to four months. If a debtor has to pay to keep an asset or surrenders an asset to the court, the case might be open for eighteen months to two years. The standard length of time in a Chapter 13 bankruptcy is three to five years. Payment is made to the court every month of that timeline, unlike in a Chapter 7 asset case where the payment will only be 12 months at most.
A Chapter 13 case is significantly more costly than Chapter 7. If the debtor retains counsel, the fees paid will be for the duration of the bankruptcy, which will be much higher than a standard Chapter 7. The debtor will have to make monthly payments that cover court fees, attorney fees, a trustee fee, and any amount paid to creditors.

However, it is much easier to keep property in a Chapter 13 case. Chapter 7 debtors who have assets worth more than their available exemptions will either have to pay for their assets in a short term payment plan or surrender them. Chapter 13 debtors will be able to pay for assets over the duration of the case, making it significantly easier to afford. In addition, homeowners who are trying to save their homes and prevent foreclosure have a much higher success rate in Chapter 13 bankruptcies than they do in Chapter 7 bankruptcies.

Q. Can I change from one chapter of bankruptcy to another? Why might I want to do so?

A. Yes, many people convert their cases from Chapter 13 to Chapter 7. Normally, a person might choose this option if he or she can no longer afford the Chapter 13 monthly payment. If that occurs and the person is able to qualify for Chapter 7, then this will be the best option. These situations can occur for different reasons, but the main one is normally suffering a loss of income during the timeline of the Chapter 13 bankruptcy.

Once it becomes impossible to make the payment, the debtor will be better off converting to Chapter 7 and ensuring that the initial filing was not for nothing. Some debtors may have initially filed a Chapter 13 to save their property and something occurs to change their minds later on. If that happens and they qualify for a Chapter 7, it is smarter to convert than stay in Chapter 13.

Conversion from Chapter 7 to Chapter 13 is usually forced by the court. The most common reason this occurs is that the court finds the debtor does not qualify for Chapter 7 because he or she has too much income. If the debtor was not truthful on his or her petition or attempted to abuse the system, the case could be converted into these situations as well. Occasionally, a debtor converts from Chapter 7 to 13 because the debtor did not realize how much he or she would have to pay to retain non-exempt assets in Chapter 7. If the trustee doesn’t object, the conversion should be possible.

Q. Are Social Security Benefits Included in Disposable Income for Means Testing?

Chapter 13 debtors cannot be compelled to include social security benefits in the computation of their disposable income, and thus in their projected disposable income. Given the Bankruptcy Code’s explicit exclusion of social security income from the statutory definition of “current monthly income.”

A New York bankruptcy court found itself “simply without discretion” to alter the treatment afforded to social security income under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), “regardless of how unfair the outcome may seem in any particular case.” Under the BAPCPA amendments to the Code, the court indicated, social security income “enjoys complete protection from the reach of unsecured creditors” in bankruptcy.

Property & Income

Q. What should or can I do to prevent foreclosures and repossessions?

Soon after filing the petition, you must declare whether you will return the property, purchase the property from the creditor, or enter into a Reaffirmation Agreement with the creditor. However, if you do not do one of these things, the stay will terminate, and the creditor may take the property.

With Chapter 13 filing In most cases, you will be able to keep property even if you have given it as collateral for a loan. Your plan can modify some loan obligations by stretching out payments and reducing interest rates. If you make payments under your plan, your lenders will not be able to foreclose on or repossess your property.

Q. What property will I lose and what will I get to keep if I file for bankruptcy?

In Chapter 7, the bankruptcy trustee will sell your non-exempt property to pay your creditors. You get to keep all your exempt property. Most people who go through Chapter 7 have no non-exempt property and get to keep everything they own.

All states have exemption laws that allow you to keep a significant amount of property. Federal law also provides exemptions. In some states, you can choose either the state or the federal exemptions. In others, you may use only the state exemptions.

The specific type and value of property that is exempt varies from state to state. As a general rule, you will be able to keep such necessities as clothing, furniture, appliances, and other household goods. Most pensions and retirement accounts are also exempt.

The two assets people are most worried about losing are cars and homes. To keep a car or home you must keep up with the loan or mortgage payments. And your equity in the property must not exceed the applicable exemption.

Exemption amounts for cars and homes differ from state to state. Typically, you can keep a car of modest value. Some states exempt only a few thousand dollars of equity in a home, while others exempt tens of thousands. A few states have virtually unlimited homestead exemptions, while several have no homestead exemption.
If you have non-exempt property that you hope to keep, Chapter 13 may be a better choice. Chapter 13 allows you to keep all your property as long as you complete your repayment plan.

Q. What is lien stripping?

Many people have multiple liens on their properties. Since the economic downturn, however, the value of houses has gone down dramatically, leaving many junior mortgages (the subsequent mortgages) unsecured. The priority of a lien against other liens is based on the date that the lien was recorded, with the earliest recorded lien or first mortgage holder taking priority over the subsequent liens.

Liens can be stripped off of the debtor’s assets in Chapter 11 or Chapter 13 when there is not enough equity in the asset.  After deducting senior liens from the property’s current market value, to secure the unsecured in whole or in part, where the lien exceeds the value of the debtor’s property. Section 506 of the Bankruptcy Code acknowledges that a lien is only a secured claim to the extent there is value in the asset to which it attaches.

To the extent that the claim exceeds the value of the collateral, your home, for example, that portion of the claim is unsecured. In Chapter 11 or Chapter 13, even voluntary liens, such as deeds of trust, and security interests, can be stripped down to the value of the collateral. Unfortunately, Congress has thus far failed to change the bankruptcy law to allow the modification of the deed of trust on a primary residence.

Q. In simple terms, what are my options for keeping my house?

If you are faced with a foreclosure, the bankruptcy can stop the foreclosure temporarily, but you will be required to become current on at least the first deed of trust in order to keep it, or you must have the lender modify the loan.

Q. How much property can I keep after filing bankruptcy?

Regarding Chapter 7 bankruptcy every state has exemption laws that allow you to keep some necessities, even if you do not pay your creditors. The idea is that it would do little good to take all of your assets because you would not have a place to live, clothes to wear, or a way to get to work. Most exemption laws allow you to keep clothes, household goods, a car of some limited value, tools of your trade, as well as other property. Some exemptions allow you to keep some equity in a house.

In addition, bankruptcy law contains its own set of exemptions, which you can use when you are in bankruptcy, at least in some states. One process may be great for one person, but horrible for another. An experienced bankruptcy attorney will be able to help you choose the appropriate exemptions. As we described above, you must give all your non-exempt assets (the ones that do not fit within the exemptions) to the bankruptcy trustee. The trustee will then sell these assets to pay a portion of your pre-petition debts. However, many people do not have property in excess of the allowed amount of exempt property, therefore you do not need to surrender any property.

Despite the exemptions, you always need to pay debts owed to Secured Creditors in order to keep the collateral, such as a car or residence, securing the debt. Your exemptions do not affect their claims. In Chapter 13 most people keep all of their property. In exchange for keeping their property, however, they commit to repaying a portion of their debts under a three- to five-year repayment plan. The plan will include payments to your secured creditors. You may use chapter 13 to save your home from foreclosure.

The automatic stay stops the foreclosure proceeding as soon as you file bankruptcy. Chapter 13 allows you to catch up on overdue pre-petition filing payments over time while keeping up with current payments.

Q. How does the automatic stay stop foreclosures, repossessions or other collection efforts from taking place?

Just by filing a bankruptcy petition, an “automatic stay” against all collection efforts goes into effect. Creditors must stop all efforts to collect from you. Creditors must stop making calls to you, stop sending letters, stop all lawsuits to collect, and stop doing everything else to make you pay. The automatic stay also stops foreclosures, repossessions, or sales of property from going forward. If you do not pay your house payments, however, the creditor will have the right to continue the foreclosure after your bankruptcy case is finished. Thus, the benefits of the automatic stay may be temporary when the creditor is a secured creditor. There are several exceptions to the automatic stay.

Two important exceptions are attempts to establish or collect alimony or support obligations criminal suits. Remember that to secured creditors, the automatic stay is temporary. It means only that creditors must ask the court before acting. No bankruptcy filing allows you to keep property that is security for a loan without making payments on the loan. If you are behind on the payments and the property is of insufficient value to satisfy the debt, or there is a risk of loss of the property, a secured creditor may obtain court permission to seize and sell the property.

In addition, in a chapter 7 case, as soon as the bankruptcy case is closed, the automatic stay terminates, and the secured creditor can proceed with foreclosure or repossession if you are behind on the payments. If your largest debts are secured debts, you may be better off filing a chapter 13 case. The chapter 13 will allow you to pay off the past-due secured debt over time. In chapter 13, the automatic stay also protects people other than you who are “co-debtors”.

Co-debtors are people who also have an obligation to pay the same consumer debt as you do. That includes people who have guaranteed the debt for you, such as cosigners.

Q. Does bankruptcy automatically remove liens, such as deeds of trusts against my property?

No, not at all. Secured creditors get extraordinary rights in a bankruptcy case. Bankruptcy may temporarily delay secured creditors, but most voluntary liens, such as those held by deeds of trust and your car lender have to be satisfied by either paying the creditor or surrendering the property to the creditor.

However, you have some opportunities to remove involuntary liens and a small category of voluntary liens.

With Chapter 7 bankruptcy you can remove involuntary liens (except for liens securing alimony or support obligations) and some voluntary liens on property that you could exempt. For these voluntary liens, you can only remove liens on certain household goods (for example, clothing, one radio, one television, one VCR), “tools of the trade” and professionally prescribed health aids (such as a wheelchair or a hearing aid).

If you file chapter 13, you have the additional ability to remove liens by completing payments under the plan. In some cases, the plan will reduce the amount that you must pay or change the time period over which you must pay the debt.

Q. Can I wipe out the second mortgage on my house in bankruptcy?

This is possible in a Chapter 13 bankruptcy if it is your primary residence and there is absolutely no equity in your home after considering the first trust deed. This is called lien stripping.

Q. Can bankruptcy help me if my wages have been garnished?

Many debtors who owe money are sued by their creditors. These creditors then get judgments that they will attempt to collect on. The primary way creditors collect is by garnishing the wages of the debtor. The creditor can garnish your wages through the court and your employer will be ordered to withhold a certain percentage of your paycheck and pay that money to your creditors. This process will continue until the debt is paid off or you leave that specific place of employment.

Having your wages garnished can be a backbreaking experience as any slight change in income can make it difficult or impossible to meet your monthly obligations. In this situation, the best option might be to file a bankruptcy. If you file a Chapter 7 bankruptcy, the wage garnishing will stop immediately and, at the conclusion of the bankruptcy, the debt should be discharged.

While wage garnishing will also cease in a Chapter 13 bankruptcy, some of the debt might have to be paid as part of the debtor’s repayment plan. There are not many options outside of bankruptcy that can stop a wage garnishment. Most people having their wages garnished are not in a position to settle debts owed. As a result, it would be smart to consider bankruptcy in these situations so no more monthly income is wasted on an old debt.

Q. Can bankruptcy help me if I am behind on my mortgage or my home is in foreclosure?

A. The vast majority of people in foreclosure should at least consider bankruptcy as an option. Both Chapter 7 and Chapter 13 offer advantages depending on individual circumstances. Some people are in homes that are upside down and have no equity. If you are in that situation, you might not want to save your home. However, you may want to stay in the home as long as possible.

Filing a Chapter 7 bankruptcy may be the best option as immediately upon filing, the bankruptcy creates a freeze (called an automatic stay) which stops creditors from continuing their foreclosure efforts. Many debtors wait until their house’s sale date to file their bankruptcy, which can substantially extend their time in the house.

If you have already lost your home to foreclosure Chapter 7 can provide the closure you need to get the foreclosure off your credit and any deficiency debt discharged as well.

Some debtors want to keep their homes, but they are significantly behind in their mortgage payments. If this is your situation, you might be best served by filing Chapter 13. Chapter 13 reorganizes your debt and like Chapter 7, creditors are stopped from collecting immediately upon filing. You then must come up with a repayment plan to catch up on the late payments, as well as make your current mortgage payments in a timely manner. In addition, the bankruptcy court offers a Bankruptcy Mediation Modification Program, which has a high success rate and allows a much more streamlined modification process than the one that you attempt outside of bankruptcy. Chapter 13 is known as the chapter of bankruptcy where people save their homes and it can be very effective.

Q. Can bankruptcy help if I am behind on my car payments or if my car has already been repossessed?

Vehicle repossessions are a common reason for filing bankruptcy. Many people fall behind in their car payments and lose their cars as a result. To make matters worse, the creditor auctions the repossessed vehicle off for a significantly lower price than the actual value of the vehicle and then pursues a deficiency judgment against the debtor for the remaining balance owed after the auction.

People who could not afford their car payments to begin with now face owing money on a car they don’t even own anymore.

Chapter 7 bankruptcy can eliminate that debt and help you recover. If bankruptcy is not filed in this situation, your creditors can get a judgment against you and will start trying to collect on it by garnishing your wages or seizing your bank accounts. Seeking bankruptcy prior to the lawsuit process will be much easier for you than the stress that will ensue upon being served.

Chapter 13 is also an option for the debtor who is behind with car payments. However, you’ll want to consult with an attorney prior to making that choice strictly based on a vehicle as chapter 13 bankruptcy lasts for awhile. The filing will freeze the creditors before they are able to seize the car and you could propose a repayment plan that if accepted by the court and not objected to by the creditor, could save the vehicle and be a good solution for all parties involved. Chapter 13 can also, in certain situations, lower the balance owed or interest rate on the vehicle.

Q. Are there any down sides to short sales?

Yes, there can still be debt forgiveness resulting in a taxable income or a lender may expect you to waive your defenses to the note which may give them a longer period to sue you on a deficiency. Here are two resources that will give you more information relating to short-sales and filing bankruptcy.

https://www.thebalance.com/short-sales-are-no-bargain-for-buyers-1798170

https://www.nolo.com/legal-encyclopedia/selling-a-home-in-a-short-sale.html

 

 

Consequences of Bankruptcy

Q. Will I ever be able to apply for credit again?

Yes, in fact, the opposite might be closer to the truth. We see many clients who start receiving credit offers shortly after they receive their bankruptcy discharge. The terms aren’t the best, and interest rates may be higher, but it can be the beginning of rebuilding your credit.

Q. What steps can I take to repair my credit after bankruptcy?

The best step you can take post-bankruptcy is to manage your finances better going forward. One of the most important aspects of your fresh start in repairing your credit rating. Every situation is different and some situations make it easier for a credit rating to be repaired.

If you own a home or vehicle, or both, you might be able to reaffirm the debt in your bankruptcy. Reaffirming a debt means you intend to continue paying on the debt and will treat the debt as if it was never involved in a bankruptcy. You can reaffirm a debt by signing a reaffirmation agreement with the creditor and having it filed with the bankruptcy court. The agreement serves as proof and permission that the creditor is still able to collect the debt from you. In return, you can keep your car or home and continue making monthly payments which will build up your credit over time.

Outside of debts that are reaffirmed, most of the improvements in your credit rating will come in small steps. As soon as your bankruptcy is over and your debts have been discharged, expect to receive many credit card offers. It will be up to you to determine if a credit card is more of a temptation and risk than a reasonable decision to build up your credit score. If the card is used correctly and responsibly, it will help build up your credit over time. Don’t use the card unless you can afford the purchase and pay the balance off in full and on time every month. If you use the card when you don’t have the money to pay for something, there is a good chance you will be filing bankruptcy again when you are eligible to do so.

Keep in mind that having a plan for rebuilding credit step-by-step is better than signing up for every new line of credit that might be offered. And review the offers carefully. Because banks will likely view you as a poor credit risk, expect the terms to include a higher interest rate and even an annual fee.

Another option is to get a secured credit card that you have to put money in the account to use, which takes the risk of mismanagement out of the equation. A secured credit card is the safest way for you to build credit and stay out of trouble with creditors, but it also will require patience.

In the end, your income and debt will always be the most important factors in determining whether you can get credit. Creditors will want to know that you make enough money to afford the items you need credit for and they will also want to see that you don’t have a lot of outstanding debt.

Q. What are the long-term effects of bankruptcy; will I ever be able to get a loan again?

Your credit report will state that you filed for bankruptcy. A bankruptcy will stay on your credit report for seven years if you filed for Chapter 13 and ten years if you filed for Chapter 7. Lenders use credit reports in deciding whether to make loans. A bankruptcy does not mean you will never be able to borrow money again, but at first, it may be harder to get a loan at a good interest rate with acceptable terms.

Q. If I file for bankruptcy, will other people, like my employer, landlord, friends and neighbors find out?

Probably not, unless you tell them or they are listed in your bankruptcy papers as creditors. Bankruptcy filings are public records. Anybody who wants to investigate you will be able to find the records by making a trip to the courthouse or looking them up on the court’s website. But most people will have no reason to do so.

All your creditors will receive a notice that you have filed for bankruptcy. Your landlord will be included if you have a lease or owe back rent. If you have a month to month tenancy and are current, your landlord need not know about your bankruptcy.

If you file under Chapter 7, it’s very unlikely your employer will find out unless your wages have been garnished. In this case, your employer will be notified because your bankruptcy filing will stop the garnishment. If you file under Chapter 13, your employer will probably learn of your bankruptcy because the bankruptcy court will probably order that the monthly payments on your plan be deducted from your paycheck and sent to the court.

Q. How do I get a Bankruptcy removed from my credit report in a timely manner?

The Bankruptcy Court has no jurisdiction over credit reporting agencies. The Fair Credit Reporting Act, 6 U.S.C. Section 605, is the law that controls credit reporting agencies. The law states that credit reporting agencies may not report a bankruptcy case on a person’s credit report after ten years from the date the bankruptcy case is filed. Other bad credit information is removed after seven years.

The larger credit reporting agencies belong to an organization called the Associated Credit Bureaus. The policy of the Associated Credit Bureaus is to remove chapter 11 and chapter 13 cases from the credit report after seven years to encourage debtors to file under these chapters. You may contact the Federal Trade Commission, Bureau of Consumer Protection, Education Division, Washington, D.C. 20580. The telephone number is (202) 326-2222. That office can provide further information on reestablishing credit and addressing credit problems.

Q. Can my landlord evict me if I file for bankruptcy?

Your landlord cannot evict you just because you have filed for bankruptcy. Landlords, like employers, are prohibited by law from discriminating against tenants who file bankruptcy. If you have a lease, your obligations under it will be eliminated by your bankruptcy and your tenancy will become month to month.

After your bankruptcy, the landlord may ask you to sign a new lease, but you aren’t obligated to sign it. So long as you are current on your rent, continue to pay your rent on time, and are otherwise a good tenant, your bankruptcy should not cause problems with your landlord.

Q. Can I lose my job if I file bankruptcy?

It is not common to lose your job due to filing bankruptcy. Most employers will probably not even be aware of the filing. As a general rule, both private and government employers are prohibited by law from discriminating against a person who files for bankruptcy. However, some jobs require a certain security clearance. While most of these jobs will not terminate your employment, there are some security clearance level positions that could terminate you for filing bankruptcy.

If you are employed at a company or in government and need certain security clearances, it is best to investigate whether bankruptcy will affect your employment. Outside of those situations and certain financial positions, your job should not be in jeopardy due to filing bankruptcy.

Q. Can I be evicted from my apartment if I file for bankruptcy?

Not immediately. In most cases, the automatic stay will prevent your landlord from evicting you. You will be required to assume your lease, however, which means that you must promise to both make up any missed payments and make all future payments on time. To avoid losing your apartment, you must make all payments when they are due.

However, there are two exceptions to the rule that your landlord cannot evict you upon filing for bankruptcy. If the landlord has already sued you for eviction and the court has given your landlord the right to take possession of your apartment, your landlord will be able to evict you 30 days after you file for bankruptcy. Also, if your landlord has already started eviction proceedings because you endangered the property or used illegal drugs on the property, your landlord will be able to continue those eviction proceedings fifteen days after you file for bankruptcy.

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