General Bankruptcy Questions (cont.)

Usually, your attorney deals with all creditors.

No. There are no debtor’s prisons in the United States.

Under some circumstances you may be able to keep a credit card. But think seriously about whether keeping a credit card is in your best interest, given where you currently find yourself financially. There are many factors which must be considered. Some of those include the credit card balance at the time of the bankruptcy and the real need to preserve that particular credit line.

Probably. A new Chapter 7 petition can be filed only after 8 years from the previous one. However, relief may (and probably is) available under Chapter 13 of the Bankruptcy Code.

Probably none. You generally can keep your 401k, thrift savings and other ERISA qualified (i.e., federally protected) retirement savings, regardless of how large they are. “Straight IRAs” and other retirement savings plans can be protected up to certain, generally pretty high, limits. Your attorney can advise you of the specifics. If you file for Chapter 13 protection, you will not be allowed to continue contributing toward retirement savings during the course of the Chapter 13 plan. This makes sense–the law did not intend for a debtor to be putting money into his or her personal savings accounts which otherwise could have been paid to the creditors.

No, so long as you continue paying the regular monthly payment to the creditor who has the lien on the house, car or furniture (or appliances, etc). Reasonably priced cars or houses and similar secured items (furniture, appliances, etc.) which, if sold, would not generate any “real” money to benefit your creditors are given special treatment under bankruptcy. They are generally seen as essential to a debtor’s reorganization. If the debtor can afford to pay for the item, the debtor will be given that opportunity. (If there is a lot of equity in the house or car, this could present a special problem. See your attorney to discuss the options that exist.)

Generally not, regardless of how long ago the loan was incurred. Ask your attorney for more details if your situation presents an unusual hardship that might justify requesting a special exception to this rule. Simply not having enough money is not an unusual enough hardship to justify the exception.

Yes. (If we attempt to offer a further explanation, the reader may think there are exceptions. Be advised. There are no exceptions. You may wish to read the answer to the next question nevertheless.)

No. Just the opposite. You must give us a list property so that we can protect it. If you list it, and we protect it, the trustee won’t take it. If you don’t list it, we cannot protect it and the trustee, therefore, can take it. It is against the law not to list all of your property and all of your assets in your bankruptcy paperwork. Intentional failure to list all of your property and all of your creditors in your schedules constitutes bankruptcy fraud. You can go to jail for bankruptcy fraud. Don’t play around with this stuff. Make sure to give us the information we need. If, for some reason, we feel that a piece of property you listed is “at risk” for being claimed by the trustee, we will let you know in plenty of time to simply stop the process, if that is your choice. But if you didn’t tell us about a piece of property until after the filing, it is too late.

They have their ways. We are not going to debate this with you.

The general rule is that you cannot favor one creditor over another in bankruptcy. There is a procedure where a debtor can choose to “reaffirm” (continue to pay) one or more creditors with the court’s approval. Anything you decide to do after the bankruptcy is concluded (such as repay a creditor) is not of concern to the court (unless the money used to pay the creditor existed before you filed bankruptcy, and you failed to disclose it).

Not likely. There is a hearing which you must attend called the “First Meeting of Creditors,” but this is not a court hearing before a judge. Rather, it is an administrative proceeding at which the Trustee (an official appointed by the courts to administer your case) has a chance to ask you questions about your paperwork and for creditors to appear to inquire about matters of concern to them. The Trustee’s questions are usually quite simple. Creditors rarely show up.

Yes, at least temporarily, but if you cannot catch up on the payments during the automatic stay period, you could still lose it. If you arrange to catch up with your payments inside of a Chapter 13 plan, and keep your regular payments current, you should be allowed to keep the house “forever.” See Frequent Questions asked about Chapter 13 Bankruptcy.

If you think that we can be of service, please call our office at (757) 877-2244 to schedule an appointment to speak with one of our attorneys. Even though you may have carefully read the information on this site, there is much more that an attorney will need to discuss with you before a final decision can be made on which course you should pursue.