Bankruptcy – FAQs

Where do I start?

If you are overwhelmed with debt and harassing phone calls by creditors, we recommend that you come in and talk to one of our friendly and knowledgeable paralegals. There is no cost for your initial visit, so you have nothing to lose. We can steer you in the right direction and help put your mind at ease. To schedule your free consultation, call our office at 423-244-0009

What is a Chapter 7 Bankruptcy?

A chapter 7 bankruptcy is ideal for people whose debt is mainly unsecured debt. Most unsecured debts can be discharged through chapter 7, with the exception of some taxes and student loans. If you are burdened with unsecured debt, such as credit cards, also known as consumer debt, a chapter 7 bankruptcy will discharge, or cancel, the bulk of those debts. If you have secured debts, such as mortgaged property and financed cars, you can continue to make the scheduled payments or return the property to the securing party. For many people, relief from unsecured debts provides the necessary breathing room to catch up on payments on secured items.

Who can file for Chapter 7 bankruptcy?

In order to qualify for relief under chapter 7 of the Bankruptcy Code, the debtor must be an individual, a partnership, or a corporation. An individual cannot file under chapter 7 or any other chapter, however, if during the preceding 180 days a prior bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court or comply with orders of the court or the debtor voluntarily dismissed the previous case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens.

What is a Chapter 13 Bankruptcy?

Chapter 13 is often referred to as a “wage earner” plan because you must be earning an income to participate in a chapter 13 plan. In a chapter 13 bankruptcy, rather than cancelling your debts, you will receive additional time to pay off your debts. In most cases, your debts can be paid off during the established time at a substantially lower interest rate. At the end of the plan, whatever debts you have remaining may be cancelled. A chapter 13 plan is ideal for people whose debt is mostly secured, such as mortgaged homes and financed cars, because chapter 13 allows you to keep your property while making planned payments.

Who can file for Chapter 13 bankruptcy?

Any individual, even if self-employed or operating an unincorporated business, is eligible for chapter 13 relief as long as the individual’s unsecured debts are less than $290,525 and secured debts are less than $871,550. A corporation or partnership may not be a chapter 13 debtor.

How long will the bankruptcy show on my credit report?

A Chapter 13 bankruptcy will show up on your credit report for seven years (starting from the date it’s discharged). A Chapter 7 bankruptcy stays on your credit report for ten years.

If I come in for a free consultation, what can I expect?

We want your initial visit to be as stress-free as possible. You can expect to be treated with respect and to have your information kept confidential. You will likely be meeting with one of our paralegals, rather than an attorney, on your first visit. Our paralegals are friendly, understanding, and very knowledgeable about bankruptcy law. They meet with people just like you every day and can help assess your circumstances and determine if bankruptcy is right for you.

Thank you, and we look forward to seeing you.

Will my information be kept confidential?

Absolutely. We understand the sensitive nature of filing bankruptcy and are dedicated to keeping your information strictly confidential.

How much does it cost to file bankruptcy?

Currently, the filing fee for a Chapter 7 is $338.00, and the filing fee for a Chapter 13 is $313.00.

How do I get the creditors to stop calling?

Filing bankruptcy will put an immediate stop to all harassing phone calls and letters from creditors.

How long does a typical bankruptcy last?

A Chapter 7 is typically a four month process during which all of your dischargeable debts are cancelled, and you are given a fresh start.
A Chapter 13 is a repayment plan lasting from 3 to 5 years where a Chapter 13 Trustee disburses payments to your creditors.