Bankruptcy can be an easy process, but it can also be full traps that can get you in trouble if you don’t have the right bankruptcy attorney guiding your through the the process as bankruptcy and its laws and process are foreign to most people. Below are a few bankruptcy questions that I have been asked and answered so hopefully you find the information helpful.
Can my fiancée and I file bankruptcy together?
When filing bankruptcy and you are married you have the option of filing a joint petition or filing individually. This applies whether you file chapter 7 bankruptcy or chapter 13 bankruptcy. If both parties are going to file and would otherwise qualify to file a joint bankruptcy petition based on household income and size, then it is most likely going to be preferable to file together to save you both time as well as save on attorney fees as well as court filing fees. Additionally if you file a joint bankruptcy petition then you may be able to double exemptions used to protect your assets. With that said, if you are not yet married, then you will not be able to file a joint petition as only married debtors can file a joint bankruptcy petition. Before you get married it makes sense to consult with a bankruptcy attorney to go over your options and whether filing a joint bankruptcy petition or single petition makes the most sense for your situation.
Are Bankruptcy Laws Different in Every State?
Bankruptcy laws in general are based on the Federal Bankruptcy code. With that said, all bankruptcy courts have local bankruptcy rules that debtors and their attorneys must abide by and bankruptcy exemptions are based on state laws. Bankruptcy exemptions are what is used to protect your assets and some states limit your exemptions to state exemptions while others let you choose between federal or state exemptions which can offer different benefits. For instance state exemptions may offer more protection for real estate, while federal exemptions may offer more protections for other assets through something called a wild card exemption. Additionally case law may differ based on the court and the region where your case is filed, so what may be applicable in New York, may be different than how things are handled in Washington State.
How Long Does the Bankruptcy Process Take?
The moment you file your bankruptcy case, your creditors are required to stop contacting you, stop perusing any lawsuits or garnishments due to something called the bankruptcy automatic stay. In a chapter 7 bankruptcy case, you will have a court date in about 30 days from the date of filing your case, and you will receive your bankruptcy discharge about 90 days from the date of filing. In a chapter 13 case, your court date will be in about 45 days after your bankruptcy case is filed and your plan may be 3-5 years based on whether you were an above median income debtor or not. Those below the median income for your state may file a 3 year plan, and repay based on your available disposable income. Chapter 13 plans may also be paid off early, if all of your creditors have been paid 100%.
How Many Times Can I file for Bankruptcy?
There is no limit to how many times you may file bankruptcy unless you are barred from a bankruptcy court from filing serial cases. With that said, there are important time limits you need to be aware of in order to receive a bankruptcy discharge in a subsequent bankruptcy filing. You may only file a chapter 7 bankruptcy after 8 years have passed since your last chapter 7 case that you received a discharge to get a discharge in a new case. If you file a chapter 13 bankruptcy after filing a chapter 7 case you received a discharge in, then you only have to wait 4 years to receive a discharge in a subsequent chapter 13 case and you may go a on 3 year repayment plan based on your available disposable income or how much you may have to pay may be based on the liquidation value of any assets you own that are above the median income.
Can I File for Bankruptcy Online?
Most attorneys e-file bankruptcy petitions and you can hire a bankruptcy attorney to file your case for you, even if you are in a remote location. With that said you will need to be able to get information to your attorney online, by mail, fax or by visiting their office. If you file your petition yourself, you may want to talk to your local bankruptcy court to determine what their procedures are. Bankruptcy cases do require 1 court appearance, typically in person unless the rules become modified permanently outside of Covid-19 rules in which all hearings are being held telephonically.
Can a Chapter 13 Bankruptcy be Converted into a Chapter 7 Bankruptcy?
Yes a chapter 13 bankruptcy may be converted into a chapter 7 bankruptcy if you would otherwise qualify for a chapter 7 bankruptcy. You may keep your car or other assets as long as you are not over the exemption limits for your state. Typically a case is converted from chapter 13 to chapter 7 if a debtor has a loss of income and can no longer make plan payments and they will not be at risking of losing any non exempt assets to a chapter 7 bankruptcy trustee should their chapter 13 bankruptcy case be converted to chapter 7.