Frequently Asked Questions About Bankruptcy
Q: I heard bankruptcy laws have changed. Is it harder to file bankruptcy than it used to be?
A: While it’s true that bankruptcy laws changed with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, the changes are not as drastic as you might think. Generally, more paperwork and documentation is required, and you will be required to participate in debt management classes. Your attorney can explain these requirements to you in more detail. The truth is, most people who previously qualified for chapter 7 bankruptcy protection still do.
If you want to find out whether bankruptcy might work for you, give us a call to schedule a consultation. You’ll get the answers and information you need to make the best decision for you and your family.
Q: What is the “means test” and how does it work?
A: The means test is a formula that compares your income to the median income for your state. It takes into account your dependents and expenses, and produces a result that determines which type of bankruptcy you may file. If the means test indicates that you must file a chapter 13 bankruptcy, it can also calculate the portion of your income that should be paid into the plan each month.
The means test isn’t a “Pass or Fail” type test, and having an income level above the median for your state and family size doesn’t necessarily mean that you won’t be able to file a Chapter 7 bankruptcy if that’s the best option for you. An experienced attorney can review your income and expenses to determine your options.
Q: Can I keep my house/car/boat when I file bankruptcy?
A: Usually, yes. But every case is different. Generally, the bankruptcy code allows individuals to keep personal household belongings–things like clothing, kitchen goods, bedding , furniture, and any tools needed to make a living. Your vehicle and home are also protected in most circumstances, up to a certain dollar amount.
The property you can protect from your creditors is determined by the exemptions applied in your case. In Oregon, you may have an option between Oregon or Federal exemptions. If you recently moved to Oregon, your options may be different. Differences between exemptions can be significant, so it’s very important to discuss all of the property you own with your attorney to determine the best option for your case. For that reason, we strongly recommend that you seek the advice of an experienced attorney who can help you determine how to best protect your assets.
Q: What if I don’t want to file bankruptcy on my house or car?
A: When your bankruptcy is filed with the court, it will list every debt you owe, including home mortgages and vehicle loans. You may continue making payments on those debts after your case is filed if you want to keep the property. In many cases, a creditor will offer an opportunity for you to reaffirm on an auto loan, which creates a new contract between you and the lender. The process for a home or land is a little different, but still allows you to continue payments and keep the property if you choose.
Q: How much does bankruptcy cost?
A: Our fees are reasonable and competitive. Because our goal is to tailor a solution specific to your needs, fees vary. Please call us for a free, confidential consultation. We can discuss your needs and quote you a price at that time if it appears that bankruptcy is an appropriate solution for you.
A note about why we don’t have a “one price for everyone” quote available: cases vary from one to the next, and some are more complicated than others for reasons that are not immediately apparent to someone unfamiliar with how bankruptcy works. A short discussion with an attorney will provide enough information to give you an accurate price quote so you know how much it will cost if you decide to move forward with the process. You won’t be overcharged if your case is simple and straight-forward, and we’ll give you a fair price quote if your case is more complex.
Q: What kinds of debts can I discharge through bankruptcy?
A: Normally, you can discharge credit card debt and charge accounts, medical bills, repossession deficiencies, personal loans (including payday loans,) and under some circumstances, even taxes. Other types of debt may also be discharged in bankruptcy–check with your attorney. Some types of debts are generally not dischargeable in bankruptcy, for example: most student loans, child support payments, and some taxes.
Usually, if a debt is of the type that can be discharged in bankruptcy, it can still be discharged if it’s become a lawsuit, judgment, or garnishment against you. Immediately after your case is filed, we contact any creditor who has filed legal action against you to make sure they know you’ve filed bankruptcy and they must stop any collection action immediately.
Q: What if I want to pay back a debt? Can I leave it out of my bankruptcy?
A: When your case is filed, you must disclose every debt you owe as of that date. That includes loans from family members or friends, credit cards, and anything other debts you might have. After the bankruptcy has been completed, you may repay a debt if you choose to do so. However, creditors listed in your case may not take any further collection action against you and may be unwilling to provide account statements or accept payments–talk to your attorney about any debts you want to repay, so you can discuss the possible benefits and disadvantages in your situation.
Q: Why do I need an attorney to file bankruptcy? Can’t I do it myself?
A: While it is legally possible to file without the assistance of an attorney, we don’t recommend it. The bankruptcy code is complex, and we think a bankruptcy lawyer is well worth the cost. It’s possible that the advice of an attorney can help you retain your possessions and negotiate the best deal with creditors. Also, only an attorney can provide representation at required court hearings and appearances.
It’s important to note the differences between an attorney and a document preparer. Document preparers may provide bankruptcy forms and fill them out using the information you provide, but they are not attorneys. In other words, a document preparer cannot provide legal advice or representation, cannot answer questions about your case, and cannot represent you at required court appearances. That means that a document preparer cannot tell you which exemptions to use, how to list or value your property, or whether a particular item is likely to create a problem with your creditors, the bankruptcy trustee, or the court. Additionally, if a problem arises with your case and you haven’t hired an attorney, you’re on your own.
Bankruptcy can be a stressful, emotional process. Let us put our experience to work to help you through it.
Do you have questions, or would you like to set an appointment for a free, confidential consultation with an attorney? Just fill out the information below, or call us at (541) 683-6652.