FAQ's
Frequently Asked Questions About Bankruptcy
Deciding to file for bankruptcy is a major financial decision. Instead of losing valuable assets like your home and car, bankruptcy can help you maintain your standard of living while achieving debt relief.
At Beehive Advocates, based in Salt Lake City and serving clients throughout Utah, our experienced bankruptcy attorneys guide individuals through the process with clarity and compassion. Below are some frequently asked questions to help you better understand your options.
Basic Bankruptcy Information
Q: What is bankruptcy? A: Bankruptcy is a legal process that allows individuals overwhelmed by debt to either eliminate their debts (Chapter 7) or restructure payments into a manageable plan (Chapter 13). It offers financial relief while protecting certain assets.
Q: What is the difference between Chapter 7 and Chapter 13 bankruptcy? A:
Chapter 7 Bankruptcy (Liquidation): Discharges unsecured debts like credit card bills and medical expenses, often within a few months. Some non-exempt assets may be liquidated to pay creditors.
Chapter 13 Bankruptcy (Reorganization): Establishes a court-approved repayment plan (typically 3-5 years) that allows you to catch up on debts while keeping your property.
Q: Will filing for bankruptcy stop creditor harassment? A: Yes. Filing for bankruptcy triggers an automatic stay, which immediately stops collection calls, wage garnishments, and lawsuits.
Q: Can bankruptcy stop wage garnishments? A: Yes, bankruptcy can halt wage garnishments and, in some cases, recover previously garnished wages.
Q: How long does bankruptcy remain on my credit report? A: A Chapter 7 bankruptcy stays on your credit report for 10 years, while a Chapter 13 bankruptcy remains for 7 years.
Q: What is the difference between secured and unsecured debt? A:
Secured debt: Backed by collateral (e.g., mortgages, auto loans). Creditors can repossess assets if payments are not made.
Unsecured debt: Not tied to assets (e.g., medical bills, credit cards, personal loans). These debts can often be discharged in bankruptcy.
Q: What if I discover more debt after filing? A: You may amend your bankruptcy filing to include additional debts within 45 days of filing.
Q: Can one spouse file for bankruptcy without the other? A: Yes, but the non-filing spouse may still be responsible for certain joint debts.
Q: Am I responsible for a co-signed debt in bankruptcy? A: Yes, unless the co-signer also files for bankruptcy, creditors may still pursue them for repayment.
Q: Are all debts dischargeable? A: No. Certain debts, such as student loans, back taxes, and child support, generally cannot be discharged. However, some exceptions may apply with legal assistance.
Q: Will I lose my Social Security payments if I file for bankruptcy? A: No. Social Security benefits are protected under bankruptcy law.
Q: Will I lose my personal property if I file for bankruptcy? A: Many assets are protected by state and federal exemptions, allowing you to keep essential belongings, such as your home, car, and household goods.
Q: Can I choose which debts to include in bankruptcy? A: No, you must disclose all debts. However, you may choose to reaffirm certain debts, such as a car loan, to retain the asset.
Q: How long does it take to receive a bankruptcy discharge? A:
Chapter 7: Typically within 60-90 days after the 341 meeting (meeting of creditors).
Chapter 13: After completion of the repayment plan (3-5 years).
Q: How much does it cost to file for bankruptcy? A: Beehive Advocates offers affordable, flat-rate pricing for Chapter 7 bankruptcy and flexible payment plans for Chapter 13 filings. Contact us for a free consultation to discuss your options.
