postheadericon Uniontown Bankruptcy FAQ’s

The answers to these frequently asked questions are meant as a general guide and are not intended to be legal advice. The specifics of your case may be different. Contact Uniontown Bankruptcy Attorney Kim Kovach to discuss your specific case.

What is bankruptcy?

Bankruptcy is a legal proceeding designed to help consumers eliminate their debts or organize a plan to repay them. Filing for bankruptcy immediately stops all of your creditors from seeking to collect debts from you and will stop most foreclosures, repossessions and utility shut offs.

How do I know what type of bankruptcy to file?

Choosing the best chapter of bankruptcy will depend on what kind of debts you have, whether you are behind on secured debts, and whether you have the regular income necessary to fund a Chapter 13 Reorganization Plan.

Every case is different and Uniontown bankruptcy Attorney Kim Kovach will help you determine what is best for you and may be able to save you thousands of dollars. Most people will file either a Chapter 7 or a Chapter 13 bankruptcy.

What is Chapter 7 Bankruptcy?

In a bankruptcy case under chapter 7 you file a petition asking the court to discharge your debts. The basic idea in a chapter 7 bankruptcy is to wipe out (discharge) your debts in exchange for you giving up property, except for “exempt” property which the law allows you to keep. In most cases, all of your property will be exempt. However, property which is not exempt is sold, with the money distributed to creditors.

If you want to keep property like a home or a car and are behind on the payments on a mortgage or car loan, a chapter 7 case probably will not be the right choice for you. That is because chapter 7 bankruptcy does not eliminate the right of mortgage holders or car loan creditors to take your property to cover your debt.

What is a Chapter 13 Bankruptcy?

Chapter 13 is an individual reorganization similar a consolidated repayment plan. The debtor keeps their property and makes regular payments to the Chapter 13 trustee out of future income. The trustee uses these funds to pay creditors over the life of the plan (3-5 years). The amount of the monthly payments to be made into the Chapter 13 plan depends on a variety of factors. Uniontown bankruptcy Attorney Kim Kovach can help determine if Chapter 13 bankruptcy is right for you.

Chapter 13 could be helpful to individuals who are behind in their home or car payments and wish to save them from foreclosure or repossession. It may be possible to lower your payments and interest and eliminate some late fees.

What happens during the bankruptcy process?

When filing under Chapter 7, you file several forms with the bankruptcy court listing income, expenses, assets, debts and property transactions for the past two years. A court-appointed trustee is assigned to oversee your case. About a month after filing, you must attend a meeting of creditors where the trustee reviews your case and asks questions. The meeting typically lasts about 10 minutes, and creditors rarely attend. Bankruptcies are typically discharged three to six months later.

When filing under Chapter 13, you file all the same forms plus a proposed repayment plan, in which you describe how you intend to repay your debts over the next three to five years. A trustee is assigned to oversee the case, and you will be required to attend a meeting of creditors about one month after filing. Often one or two creditors attend this meeting, especially if they don’t like something in your plan. After the meeting of the creditors, you attend a hearing before a bankruptcy judge who either confirms or denies your plan. If your plan is confirmed, and you make all the payments called for under your plan, you often receive a discharge of any balance owed at the end of your case.

Can I put my assets in someone else’s name before filing?

No. Transferring your assets to someone else prior to bankruptcy does not prevent the trustee from reaching out and bringing those assets back into the bankruptcy estate.

A trustee can recover assets that were transferred within one year of the bankruptcy filing where the debtor did not get reasonably equivalent value for the asset, or where the transfer was made with the intent to hinder or defraud creditors.

If you have more assets than you can protect with the available exemptions, consider filing Chapter 13.

Will I have to give up all my assets?

Generally, No. The Bankruptcy Code provides that a debtor filing for bankruptcy can keep certain assets for a “fresh start” by exempting property from the estate. Most bankruptcy cases are “no asset” cases, in which the debtors have claimed an exemption in everything they own; there are then no assets from which to pay creditors.

Can I Save my House From Foreclosure?

The filing of bankruptcy triggers the automatic stay, which stops all creditors from any action to collect their claim including foreclosure.

In Chapter 7, the stay lasts only as long as the property is not abandoned by the trustee as either valueless to the estate or as exempt, or until the case is closed. A creditor secured by the house can seek relief from the stay to complete the foreclosure if there is danger that the security will lose value during the bankruptcy. Since the creditor’s lien is not eliminated by the bankruptcy, Chapter 7 provides temporary relief from foreclosure, but no lasting solution.

Chapter 13 is designed to allow debtors to cure defaults in their home mortgages by paying the arrearage over as long as 3 to 5 years.

Can I keep my car?

Generally, Yes. What you must do to keep the car varies depending on whether there is non-exempt equity in the car.

If there is no equity in the car, after subtracting any car loan and exemption from the car’s present value, the bankruptcy trustee will not take the car. If there is equity in the car over and above the value of the exemptions available, a debtor can usually buy any unprotected equity from the Chapter 7 trustee.

If you still owe money on the car, you can choose to reaffirm the debt to the secured lender, keep the car, and continue paying under the existing terms; or you can buy the car from the secured creditor in a single payment for its present value (redemption). In some jurisdictions, like Pennsylvania, you don’t even have to reaffirm the debt: you can keep the car if you continue to make the payments called for in the contract. If you choose, you can surrender the car and be free of any obligation to pay for it.

Can you stop auto repossession?

Chapter 7 – The bank cannot repossess your car once you file bankruptcy. You must, however, get the payments current before the case is finished or before the bank receives permission from the bankruptcy judge to repossess the vehicle.

Alternatively, if the bank has repossessed your vehicle prior to filing bankruptcy, then if you are able to pay your arrears and storage fees to bring your obligation current, you may retain your vehicle.

Chapter 13 – You can cure defaults on your car loan or even lower the payments on your car loan in Chapter 13

Can I discharge my student loans?

Student loans are no longer dischargeable in any chapter of bankruptcy unless you can prove that repaying the loan creates a hardship on you or your family. Prior law allowed their discharge once they had been in pay status for 7 years. The law changed in the fall of 1998.

Proving hardship usually requires showing that you can’t provide a minimum standard of living for yourself and your dependents if you have to repay the loan. Some courts will discharge part of the loan.

Will my employer find out I filed for bankruptcy?

Unless the employer is also a creditor, generally, the employer will not know an employee has filed for bankruptcy. The Bankruptcy Court does not notify your employer that you have filed for bankruptcy.

In a Chapter 13 Bankruptcy, however, the court requires a wage attachment to be entered to fund the plan, and thus, an employer will find out about the bankruptcy.

Can I be fired for filing Bankruptcy?

NO! Federal Bankruptcy law specifically prohibits discrimination based on an employee’s filing for protection.

Must my spouse file with me?

If you are married, you are not required to file a joint petition. However the spouse that does not file will not receive the benefits of bankruptcy. In other words, if the non-filing spouse is jointly liable on certain debts, he or she will remain liable for those debts if the filing spouse files for a Chapter 7 bankruptcy. He or she will also remain liable for any amount not paid for in the filing spouse’s Chapter 13 plan. On the other hand though, the non-filing spouse will not have bankruptcy noted on his or her credit report.

Therefore, if the debts you owe are also owed by your spouse, or co-signed by your spouse, it would probably be to your benefit to file a bankruptcy together as a married couple. If most of the debts are in your name only, you may want to consider filing a bankruptcy as the only debtor.

Do I have to list all my debts?

Yes, you must list all of your debts on your bankruptcy schedules.

Will filing bankruptcy stop harassing phone calls?

Creditors usually stop calling as soon as you can give them the name and phone number of Uniontown bankruptcy Attorney Kim Kovach. Once your bankruptcy is filed, creditors must stop calling.