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Answers To Frequently Asked Bankruptcy Questions

Will I Lose All Of My Property?

People who file a liquidation or Chapter 7 bankruptcy case are able to exempt property and thus keep it. Exemptions and their limits are different for every state so you should discuss your situation with an experienced bankruptcy attorney.

Can I Get Rid Of Any Mortgage Liens?

As a general rule, if a planned bankruptcy is filed, any secondary mortgage liens can be eliminated if your first mortgage exceeds the value of your property. In most cases, only a small percentage of the mortgage debt is then repaid.

Can I Reduce My Car Payment?

This may be possible. It depends on a number of factors, including whether you file liquidation or planned bankruptcy, whether the payoff of the loan exceeds the value of the car, and when you bought the car.

What Debts Can I Get Rid Of?

Most of them! You can even get rid of taxes some of the time. Among the debts that are very difficult, if not impossible, to get rid of are alimony, child support, student loans, and criminal fines.

Will I Lose My Job?

It is against the law for an employer to fire you solely because you filed for bankruptcy.

What About My Security Clearance?

We are unaware of any case we have handled where a client’s security clearance has been negatively impacted by bankruptcy. As a practical matter, your security clearance probably should not be a significant factor in making your decision about whether to file bankruptcy. The amount of your unpaid debts, by itself, may jeopardize your clearance, even if you don’t file bankruptcy. In that sense, not filing for bankruptcy may make you more of a security risk due to the size of your outstanding debts.

Will Bankruptcy Affect My Spouse?

Married couples may, but do not have to, file bankruptcy together. If a spouse chooses not to file, his or her credit will not be impacted by the other spouse’s bankruptcy filing. If only one spouse files, he or she cannot get rid of debt jointly owed by the non-filing spouse or liens (mortgages and other secured debt) attaching to joint property. A spouse owing joint debt will receive notice of a filing spouse’s bankruptcy case. It can create problems if a non-filing spouse who lives with a filing spouse does not cooperate in supplying necessary information.

Are Most People Who File Bankruptcy Cheats Or Deadbeats?

No! Bankruptcy is most often caused by a catastrophic event such as an illness, job loss, business failure, investment failure or divorce. Of course there are cases involving unintentional financial mismanagement as well. Deceptive practices by lenders involving adjustable rates (low initial rates which rapidly increase) cause many bankruptcy filings. Most bankruptcy filers are honest people who simply need to regain control of their finances.

May I Exclude Some Debts From Bankruptcy?

All debts are required to be listed when a bankruptcy case is filed. However, you can continue to pay secured debt such as house and car loans. If unsecured debt (such as credit cards, medical bills and loans from friends or family members) is paid after a bankruptcy filing, this may jeopardize your case. Some debts such as student loans and some taxes, is nondischargeable and must be paid.

What Does Bankruptcy Do To My Credit?

Bankruptcy is one factor that lenders consider when deciding to loan you money. Other factors such as your income, the property you own and the debt you currently have also come into play. Different creditors make the decision to loan money differently, and the factors they consider and the weight given to these factors are in constant flux. However, bankruptcy filers have historically been able to obtain credit. Sometimes the ability to obtain credit improves after a bankruptcy filing when individuals reduce debt load and eliminate judgments.

Will Everyone Know I Filed For Bankruptcy?

A bankruptcy filing is a public record you can find upon investigation. Almost no one will bother incurring the time and expense of conducting such an investigation, other than a prospective lender. If you did conduct such an investigation, you might be surprised by the number of people whom you know that have filed for bankruptcy.

Will I Have To Pay My Creditors In Full After Filing Bankruptcy?

Almost no one pays their creditors in full. Most people who file bankruptcy have the option of not paying any of their creditors back any money at all, aside from the exemptions mentioned above.

Can My Creditors Continue To Try To Collect Money From Me After I File?

By law, none of your creditors can contact you to demand repayment when you file. At a certain point after filing most people receive a discharge, which prohibits contact by all their listed creditors, except creditors owed for nondischargeable debt such as some taxes and student loans.

What Should I Tell Creditors That Constantly Call Me?

If you cannot pay your debts that is what you should tell them. Do not lie to them or make promises you cannot keep. Collection agencies must stop contacting you if you give them written notice and tell them to cease contact. Once our firm is hired, tell them to contact us. They will almost always do that and stop bothering you.

Why Do I Need A Lawyer?

Our firm has handled hundreds of bankruptcy cases and can shepherd you through the many pitfalls that exist in bankruptcy. Internet petition prepared often charge as much or more than attorneys and do sloppy and unacceptable work. Our fees are a small fraction of the debt that is eliminated and is well worth the investment.

What Is The Difference Between Chapter 11 And Chapter 13 Bankruptcy?

Both Chapter 11 and Chapter 13 bankruptcies are planned bankruptcies. In other words, you will make payment through a plan that you propose and which must be confirmed by the court. Most people who file a planned bankruptcy file a Chapter 13 bankruptcy. A Chapter 13 bankruptcy involves much less expense that a Chapter 11 bankruptcy. If a business entity such as a limited liability company or corporation wants to continue operating while resolving its debt problems, it must file a Chapter 11 bankruptcy. Also, if your debt exceeds limits set for a Chapter 13 bankruptcy, you can still file a Chapter 11 bankruptcy.

What Is A Liquidation Bankruptcy?

Liquidation bankruptcy is also known as Chapter 7 bankruptcy. This type of filing allows you to get rid of all dischargeable debt, which includes a majority of all debt. However, Chapter 7 bankruptcy does not necessarily get rid of home or car liens. Secured debt payments such as these have to be made if you want to keep these types of property. Otherwise, as long as you are able to exempt your property, you are able to keep it. Thankfully, a vast majority of consumers who file a liquidation bankruptcy keep all of their property.

Is There Anything I Should Not Do If I Am Going To File Bankruptcy?

You should not make any charges on your credit cards or run up debt. You should not try to give away property and valuables to friends or relatives. You should never be untruthful in the information you provide to your attorney or the bankruptcy trustee. You should not refuse to cooperate with the trustee if he or she asks you to do something or provide information. You should not try to represent yourself or use the assistance of anyone other than a qualified, experienced law firm and an attorney who is admitted to practice in the state where the case is filed.

Contact Us To Discuss Your Options

Contact Wampler & Souder, LLC, for more information and an initial consultation . Call us at 301-732-7675 or email us your contact information to get started. We have offices in Silver Spring, Frederick and Upper Morlboro.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

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