BANKRUPTCY FAQ’S

Q. Who can file for Chapter 7?

       Whether you will be able to obtain a discharge of  your debts will depend upon many factors
and is subject to federal and state law. Most individuals or businesses who cannot meet their
debt obligations may file for Chapter 7 bankruptcy but you should speak to attorney to determine
whether your particular situation will be improved by filing for bankruptcy.

Chapter 7 will “discharge” most unsecured debts such as credit cards or signature loans. Loans
secured by collateral such as cars etc. may be able to be retained and payments continue to be
made. The collateral may be able to be retained so long as the payments are current.

Other chapters available to you under the bankruptcy code may be preferable or necessary
such as Chapters 11, 12 or 13 if you wish to continue in business or are in arrears on real estate
payments and wish to bring the loan current over a period of time.  

Chapter 13 will require the repayment of some or all of your debt over a 3 to 5 year period
depending upon your financial situation.  

Q. Can I file for bankruptcy under the new law?

       The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCA) created
a “means test” that requires debtors in bankruptcy to meet maximum income requirements
subject to statutory expenses. Individuals whose incomes are above the state median income as
determined by the IRS will need to “qualify” based upon allowable expenses.

Q. Will filing for bankruptcy affect my credit rating?

       Filing for bankruptcy will not have a severe long term adverse affect on your credit rating. In
fact FICO scores often improve after filing Chapter 7.  

Q. How do I know whether filing for bankruptcy will improve my situation?

       Filing for bankruptcy has numerous advantages and disadvantages and filing will
necessarily require some trade offs. An analysis of your situation with the assistance of an
attorney should be made to assist you in determining whether to file.

Q. How much does it cost to file Chapter 7 bankruptcy?

       Costs and filing fees vary under the different chapters of the bankruptcy code. There is a
filing fee of $299.00 imposed by the court for a Chapter 7 bankruptcy and legal fees will vary
depending upon the complexity of the case. Most attorneys’ fees will be in the range of $1000 to
$2000 for chapter 7. Very simple cases or more complex cases may fall outside the range.
Business bankruptcies will cost more.   


Q. Do I need to list all my income, assets and debts?

       Yes.

Q. What if I’ve filed for bankruptcy before?

         Time frames between filings vary under Chapters of the Bankruptcy Code but you may file
a Chapter 7 bankruptcy 8 years after obtaining a discharge in a prior bankruptcy.