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What Is Bankruptcy? - 2023 Rundown
If you don't know how bankruptcy works, this is the right place to start. You'll learn what bankruptcy is and the differences between Chapters 7 and 13. You'll also learn whether filing bankruptcy will erase your debt and if you can keep your property.
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What to Do If You Can’t Pay Bills Due to the Coronavirus
Conserve funds and prioritize debts using a COVID-19 financial action plan.
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What Happens to Mortgages in Bankruptcy
A major concern for most homeowners contemplating Chapter 7 or Chapter 13 bankruptcy is how the bankruptcy will affect their mortgage. Although your mortgage company can’t raise your interest rate or change other loan terms, some homeowners filing for Chapter 7 bankruptcy will lose their homes if they’re behind on mortgage payments or can’t protect all home equity with a bankruptcy exemption. If you’re behind on your mortgage, consider Chapter 13. Chapter 13 bankruptcy helps filers bring homes out of foreclosure by providing a way to catch up on missed mortgage payments.
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Student Loans in Bankruptcy: The Brunner Test
Getting student loans discharged in a Chapter 7 bankruptcy case is very difficult. For the most part, you must show that repayment would cause you "undue hardship."
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Debt Discharge in Bankruptcy: Nondischargeable Debts
You can wipe out or “discharge” most debt types in Chapters 7 and 13, including credit card balances, medical and utility bills, home and car loan payments (if you return the house or vehicle to the lender), and personal loans. But bankruptcy doesn’t discharge all obligations. Nondischargeable debts include most student loans and taxes; fines, penalties, and criminal restitution; and domestic support obligations. Debts incurred through fraud; obligations the filer didn’t list correctly; some loans owed to stock, bonus, profit-sharing, and retirement plans; and debts related to operating a vehicle under the influence of drugs or alcohol also are nondischargeable in bankruptcy.
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Will Filing For Chapter 7 Bankruptcy Remove A Tax Lien?
Although you can get rid of some tax debts in Chapter 7 bankruptcy, if a tax lien has been recorded against your property, you are unlikely to be able to remove it in Chapter 7 bankruptcy. There are a few exceptions, however. Read on for details.
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How Medical Bills Are Treated in Chapter 13 Bankruptcy
Although you must repay some of your medical debts in Chapter 13 bankruptcy, you do this through the protection of your Chapter 13 repayment plan.
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Will I Lose My Checking or Savings Account if I File Bankruptcy?
If you file for Chapter 7 or Chapter 13 bankruptcy, will you be able to keep your savings, checking, or other bank accounts? The answer depends on what you mean by "keeping." While most banks won't close an account in good standing, you'll have to cover the balance with a bankruptcy exemption. Otherwise, you'll likely lose it. Other bankruptcy checking and savings account issues include losing funds to setoff and difficulties opening new accounts after a bankruptcy filing.
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Can You Keep Your Retirement Accounts in Bankruptcy?
Under most circumstances, you can keep your retirement accounts, such as 401ks and IRAs, if you file for Chapter 7 bankruptcy. However, for some accounts, the protected amount may be capped.
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Will Chapter 7 Bankruptcy Prevent a Car Repossession?
If you are not making timely car loan payments, Chapter 7 bankruptcy cannot permanently prevent a car repossession. However, Chapter 7 can temporarily delay the lender from repossessing your car and allow you more time to negotiate or cure your default.
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Is Bankruptcy a Good Option for Struggling Small Businesses
Each bankruptcy chapter offers unique benefits that will differ depending on whether you or your company files for bankruptcy. Understanding these dynamics will help you choose the best solution for your small business needs during the coronavirus pandemic.
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What Is a Plan of Reorganization in Chapter 11 Bankruptcy?
Chapter 11 bankruptcy can be a good option for debtors who want to reorganize their debt in order to keep their assets. A key part of any Chapter 11 case is the debtor’s plan of reorganization. The plan of reorganization outlines how the debtor will pay back creditors over time.
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The Chapter 7 Bankruptcy Process
A typical Chapter 7 bankruptcy case is relatively straightforward. You will spend most of your time completing the bankruptcy petition, schedules, and other forms, which will require you to list your debts, assets, financial transactions, and so on. Once you've filed your paperwork, the bankruptcy trustee takes over your case.
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Typical Lawyer Fees in Chapter 7 Bankruptcy
Although attorney fees vary significantly, the average bankruptcy lawyer charges $1,200 to $2,000 for Chapter 7 bankruptcy services. The actual cost you'll pay a Chapter 7 attorney to prepare your bankruptcy will depend on three primary factors: the area you live in, the complexity of your case, and the experience level of the lawyer you hire.
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Bankruptcy Chapter 7 Means Test
If you want to file for Chapter 7 bankruptcy, you must pass the means test. The means test looks at your income, and perhaps your expenses and debts, to determine whether you could afford to pay back at least some of your debts. If so, you might not you won't be allowed to use Chapter 7; instead, you could will have to use Chapter 13 if you want to file for bankruptcy.
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Debts You Can Wipe Out in Chapter 13 Bankruptcy
Many debtors file for Chapter 13 bankruptcy to reorganize their debts and catch up on their missed mortgage or car loan payments through an affordable repayment plan. If you successfully complete your repayment plan, you will receive a bankruptcy discharge that wipes out your personal liability.
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How to Calculate a Chapter 13 Monthly Payment
In Chapter 13 bankruptcy, you'll pay money to your creditors through a three- to five-year repayment plan—but calculating a plan payment can be complicated. We provide a simple shortcut that gives you a ballpark amount you can expect to pay. For a more accurate answer, start by determining the value of your nonexempt property, your disposable income, the total amount of debt you must pay, and the required plan length.
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How Long Will Chapter 13 Bankruptcy Take?
If you file for Chapter 13 bankruptcy, your case will most likely last between three and five years, depending on the length of your repayment plan. But there are some instances when your Chapter 13 case will fall outside this standard three to five year period.
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Bankruptcy Chapter 7 Means Test
If you want to file for Chapter 7 bankruptcy, you must pass the means test. The means test looks at your income, and perhaps your expenses and debts, to determine whether you could afford to pay back at least some of your debts. If so, you might not you won't be allowed to use Chapter 7; instead, you could will have to use Chapter 13 if you want to file for bankruptcy.
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The Chapter 7 Bankruptcy Process
A typical Chapter 7 bankruptcy case is relatively straightforward. You will spend most of your time completing the bankruptcy petition, schedules, and other forms, which will require you to list your debts, assets, financial transactions, and so on. Once you've filed your paperwork, the bankruptcy trustee takes over your case.
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Is Bankruptcy a Good Option for Struggling Small Businesses
Each bankruptcy chapter offers unique benefits that will differ depending on whether you or your company files for bankruptcy. Understanding these dynamics will help you choose the best solution for your small business needs during the coronavirus pandemic.
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A judgment lien is a type of security interest that a judgment creditor can obtain against your property. Below you can learn how a creditor gets a judgment lien, what property the lien can affect, and more.
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When Is My Bankruptcy Case Over?
Most debtors file for bankruptcy relief to "discharge" or wipe out their debts. But your bankruptcy doesn’t end when you receive your discharge. Your case is not officially over until the court closes it by entering a final decree or order. Until your case is closed, you must continue cooperating with the bankruptcy trustee appointed to oversee your bankruptcy case. If you make an error, the court can close your case by dismissing it without issuing a discharge order.
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California Bankruptcy Exemptions
Like all states, California has its own set of exemptions you can use when filing for Chapter 7 or Chapter 13 bankruptcy. California bankruptcy exemptions help you keep the property you'll need, like a home, car, instrument, retirement account, and furnishings. You'll use California bankruptcy exemptions to help you determine the property you can keep in a Chapter 7 bankruptcy, and how much you'll pay to creditors in Chapter 13 bankruptcy.
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New York Bankruptcy Exemptions
Like all states, New York has its own set of exemptions you can use when filing for Chapter 7 or Chapter 13 bankruptcy. New York bankruptcy exemptions help you keep the property you'll need, like a home, car, instrument, retirement account, and furnishings. You'll use New York's bankruptcy exemptions to help you determine the property you can keep in a Chapter 7 bankruptcy, and how much you must pay to certain creditors in Chapter 13 bankruptcy.
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Like all states, Florida has its own set of exemptions you can use when filing for Chapter 7 or Chapter 13 bankruptcy. Florida bankruptcy exemptions help you keep the property you'll need, like a home, car, instrument, retirement account, and furnishings. You'll use Florida bankruptcy exemptions to help you determine the property you can keep in a Chapter 7 bankruptcy, and how much you'll pay to creditors in Chapter 13 bankruptcy.
