FREQUENTLY ASKED QUESTIONS

Q. Will filing bankruptcy stop foreclosure?

A. Both a Chapter 7 and Chapter 13 case filing stops foreclosures on
mortgages (homestead, rental, and commercial property mortgages) so long
as the sheriff’s sale has not been held. Chapter 13 also allows you to
pay back the mortgage arrears on a homestead mortgage in your chapter 13
plan over an extended period of time, while you pay the regular monthly
mortgage payments after the case is filed.

Q. Will I lose any of my property if I file bankruptcy?

A. Generally, in a Chapter 13 case you will not lose any property, even
if it is not exempt. In most Chapter 7 cases, you are able to exempt
(protect) all your property. Under the laws of Minnesota, and under the
federal laws, certain property is declared exempt, and out of the reach
of your general creditors. It is the exempt property that you will get
to keep after your bankruptcy. We will advise you as to whether or not
you have any nonexempt assets which you will either have to surrender to
the trustee, or buy back from the trustee. In most cases, you will be
able to keep your home, automobile, retirement accounts and pensions,
household furnishings, and all your property by claiming either the
state or federal exemptions. If the property is security for the loan
(ie. home with a mortgage; car with a loan) you will almost always need
to keep making the payments to keep the property; or, you can surrender
the property to the creditor and the debt is discharged (cancelled).

Q. How much does it cost to file bankruptcy?

A. The court filing fee for a Chapter 7 is $299.00 and for a Chapter 13
it is $274.00. The filing fee is the same whether you are filing
individually or jointly with your spouse. The attorney fees for a
particular case vary depending upon the complexity of the case. The
attorney fees will be determined after a review of your particular
facts. We can generally quote you a fee over the phone.

Q. Does filing bankruptcy have to be done by both husband and wife?

A. No. Nevertheless, in most instances the husband and wife will file a
joint case if they both have debt. A situation where a joint case would
not be warranted is where one of the spouses has little or no debt.
However, even where one spouse files without the other, the bankruptcy
laws require that both spouses’ income and expenses be analyzed for
purposes of determining whether you qualify for Chapter 7 or Chapter 13.
Also, the bankruptcy filing only protects and discharges the debt to the
person filing the case. So if there is a joint debt, the spouse who does
not file, is still legally responsible to pay the debt.

Q. Do I have to go to Court if I file Chapter 7 or Chapter 13?

A. Generally, you will have to appear in Court only one time. This court
appearance is held approximately one month after your case has been
filed and is called “The First Meeting of Creditors”. At this hearing,
you will be put under oath and questioned by the trustee about the
information contained in your petition and schedules, including your
assets and liabilities. In most cases, no creditors appear for this
hearing.

Q. Can my employer fire me for filing bankruptcy?

A. No. Federal law prohibits employers from terminating the employment
of, or discriminating with respect to employment against, an individual
who files either a Chapter 7 or Chapter 13.

Q. Can my utility company refuse to serve me if I discharge their bill
in bankruptcy?

A. A utility company may not alter, refuse, or discontinue service to,
or discriminate against you solely on the basis of a bankruptcy filing
that includes the utility. Although, the utility company can ask for a
reasonable deposit, within 20 days of the case filing, for continued
future service. The deposit is usually two times your average monthly bill.

Q. How does filing bankruptcy affect my credit?

A. Under the Federal Fair Credit Reporting Act, a credit bureau can
report the filing of any bankruptcy for ten years from the date the case
is filed. Generally, a Chapter 13 is reported for seven years from the
date of filing, so long as the case was completed and a discharge was
granted. In a Chapter 13 case, you cannot incur any new debts, with some
exceptions, until your case is completed. As a rule of thumb, most
mortgage companies will not grant a new mortgage to you until two years
after the bankruptcy filing. In many instances after a Chapter 7 filing
and discharge, you can obtain credit because the creditors know you
cannot file Chapter 7 for another eight years, and generally you have
little or no debt since the present Chapter 7 discharged all or most of
your debt, making you a good credit risk (assuming you have monthly
income and ability to pay the new debt).

Q. Should my business file bankruptcy?

A. If your business is struggling financially, you need to know what
alternatives are available to resolve your financial problems. Depending
upon the structure of your business (sole proprietorship, partnership,
corporation, or limited liability company), an out of court workout
plan, Chapter 11, or Chapter 13 may be available to you to rehabilitate
your business. Early legal counseling and financial planning may help
save your business. If the business is shutting down and ceasing
operations, then a Chapter 7 may be the appropriate course of action.
Also, if you as an individual personally guaranteed the business loans,
you may be forced to file an individual Chapter 7 or Chapter 13 to
eliminate the personal guarantee.

The information you obtain at this site is not, nor is it intended to be, legal advise. You should consult an attorney for individual advice regarding your own situation. Copyright- 2010 Hoverson Law Offices, P.A.- All Rights Reserved.

Pursuant to 11 U.S.C Section 528, “We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”