FAQ
FAQ
Q: What is bankruptcy?
A: Bankruptcy is a legal process where debtors (those who owe money) are able to get most, if not all, debt discharged (wiped out). Depending on the case, the debtor can keep property and extend time to pay the debts. Once the bankruptcy has been filed, creditors can no longer contact the debtor, attempt to collect on the debt, or take legal action.
Q: Why would someone need to file bankruptcy?
Q: Will I lose everything?
A: Generally, no. That is why there are lawyers – to make sure you do not do it wrong and lose everything! Bankruptcy is not solely designed to cancel debt but can improve payments on assets, reducing interest rates, and restructure payments that is more feasible. Diment & Associates can help you plot a course to get out from under your pile of bills toward a healthier financial future. The solution is often a matter of restructuring debts and changing some spending habits.
Q: What can the bankruptcy protections do for me?
A: The protections of bankruptcy only begin when a case has been filed. The magic case number stops creditors from harassing you via phone, email, text and mail. It will cease a garnishment, sheriff sale, repossession, and further legal action.
Q:I don’t want my friends or family to find out about my bankruptcy. Is that public information?
A: While bankruptcy filings are public, someone would have to go out of their way to get it. Bankruptcy is more common than people think. Chances are that someone you know has filed bankruptcy in the past. Negative connotations associated with bankruptcy are mainly due to outdated and false information.
Q: How does the bankruptcy process work?
A: The first step is to call our office to schedule a Case Evaluation. In that meeting, you will be able to explain your situation and we will provide you with options that will be available to you. When you are ready to move forward, an agreement to retain counsel is completed and we can get started on your case. You will need to submit documents through our online portal, review the documents and information with our staff and complete a Credit Counseling Course. Once everything is prepared and ready, we will have a signing appointment in which you and the attorney will review the case and sign the paperwork. The case is then filed with the court and the bankruptcy protections will begin. Approximately 30 days after filing, there will be a hearing in which the Trustee will review the case. All parties on the filing will be required to attend. Please note, our service is all inclusive, meaning there are no additional fees or charges you will incur for filing
Q: How long does it take to file a bankruptcy?
A: Once a client has retained our office we reach out to that person within one business day to begin the process. Two-way communication is key to move a case along. The most important task for a client is to provide the necessary documents needed for the filing. Our office cannot prepare a filing without the requested information. While the client does play a role in the speed of the case, our office strives to get the case filed within 1-2 weeks of retaining. Other factors also contribute to the advancement of a case such as sheriff sale, repossession, garnishment, etc.
Q: Is bankruptcy fraud a thing?
Q: What are the different types of bankruptcy?
Q: How much does a bankruptcy cost?
A: Unfortunately, it is not possible to provide a menu of the cost for a bankruptcy. The many factors that are considered must be done so carefully and tailored to each case which is done in the free Case Evaluation.
Q: Are there alternatives to bankruptcy
A: There are a few options you can do instead of filing for bankruptcy. However, most of these do tend to have a high failure rate rather than filing bankruptcy with a lawyer. Alternative options can include out of court settlement, reduction of payment, help from consumer credit counseling services, or payment of debts by selling or borrowing against property. It is important to note that these options do require cooperation from creditors and are more likely to succeed right after the financial difficulties begin.
Q: Does bankruptcy ruin my credit?
A: While bankruptcy does have an immediate impact on your credit core, it is not what you would expect. For many people, their credit score is actually improved because it removes many of the “derogatory” marks – the things that lower your score – from your credit report.
Q: Will I be able to purchase a house or car?
A: Yes, you are able to purchase a house or car in bankruptcy. There are additional steps involved and would require court approval.
Q: How will it affect my spouse?
A: This can be a complex question that does not have a straightforward answer. It would require more information and can vary case-by-case.
341Meeting – A mandatory meeting of creditors at which the debtor is questioned under oath by creditors, a trustee, examiner, or the United States trustee about his/her financial affairs. Typically, only the trustee will ask questions.
Adversary proceeding – a lawsuit arising in or related to a bankruptcy case that is commenced by filing a complaint with the bankruptcy court.
Automatic stay – an injunction that automatically stops lawsuits, foreclosures, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed.
Chapter 7 – A type of bankruptcy usable by consumers and business. It is the most common type of bankruptcy. Your debts are mostly wiped out and, while you can hold on to a few essential assets, the rest can be sold to pay off creditors.
Chapter 13 – A procedure that allows an individual to keep all of their assets by reorganizing their debts into a payment plan, based upon how much they can afford to pay back over 3 to 5 years. If all payments are made timely, the remainder of eligible debts will be discharged.
Creditor – A person or business to which an individual owes money.
Debtor – The person or business seeking protection from creditors under the bankruptcy laws.
Secured creditor – refers to the company or person that holds a lien against somebody’s property to ensure repayment of the secured debt. i.e. auto loan, mortgage, title loan.
Discharge – the satisfaction or elimination of debts due to bankruptcy. The debtor is no longer liable for the debt and the lender is no longer allowed to make attempts to collect the debt.
Equity – The value of a debtor’s interest in property that remains after liens and other creditors’ interests are considered. (Example: If a house valued at $200,000 is subject to a $150,000 mortgage, there is $50,000 of equity)
Exemptions – the laws that protect assets, not assets themselves
Lien – an interest that the lender has against the property of someone else to secure repayment of a debt. (Example: mortgage, auto loan)
Liquidation – a sale of the debtor’s property in which the proceeds would be used for the benefit of the creditors.
Secured debt – any debt that is backed by a mortgage, pledge of collateral, or other lien. It is a debt held by a secured creditor who has the right to pursue specific pledged property upon default.
Trustee – an agent of the court who manages the property of the debtor for the benefit of the creditors.
Unsecured debt – a claim or debt for which a creditor holds no special assurance of payment. The most common examples include credit cards and signature loans.
Means Test – a calculation that determines if a person is eligible to file for Chapter 7 bankruptcy. The facts that are considered are income, expenses and household size. It is best for an attorney to determine your eligibility.
