July 3, 2023
Filing for bankruptcy is not a decision to be taken lightly and should ideally be done after thoroughly educating yourself on your options and consulting with a bankruptcy attorney. That said, although you may be nervous or scared to take the plunge, for many people, bankruptcy can be an important step to get them back on their feet financially and working toward a more stable future. Below are some common bankruptcy FAQs I’ve heard from clients over the years that can give you a better understanding of what to expect.
For more information, call me, Steven C. Frazier, Attorney At Law, to schedule a consultation. I work out of Kingsport, Tennessee, and serve those in Church Hill, Johnson City, Bristol, or anywhere in Northeastern Tennessee.
Bankruptcy Frequently Asked Questions
How do the different chapters of bankruptcy differ?
There are two main options for filing for individuals: Chapter 7 bankruptcy and Chapter 13 bankruptcy. Each provides specific advantages and disadvantages based on your needs. If you own a business, you’ll likely need to file Chapter 11 bankruptcy.
Which chapter should I file under?
Chapter 7, also called “liquidation” bankruptcy, is ideal for individuals who don’t have a lot of assets to their name and earn under the average median income for a household of their size. If you earn more than this or have assets that you want to protect, you’ll likely want to file Chapter 13 which allows you to establish a repayment plan over the next three to five years.
Can I keep my house and car if I file for bankruptcy?
Maybe. If you’re concerned about losing assets, you’re best bet is to file for Chapter 13, but you should always consult with an attorney about your options ahead of time. Because Chapter 7 requires you to liquidate any non-exempt assets, this may mean you’ll be forced to sell your car and home to pay off creditors. That said, in many cases, your car will be considered an essential asset and you’ll get to keep it. For homes, if you don’t have that much equity in it, it may also be considered exempt.
Does bankruptcy stop creditor calls?
Yes, once your bankruptcy filing goes through, it puts an automatic stay on your creditors which means they’re prohibited from contacting you about your past-due debt.
How long does bankruptcy appear on a credit report?
A Chapter 7 filing typically stays on your credit report for ten years, and a Chapter 13 filing will stay for seven years.
What if creditors aren’t respecting my bankruptcy discharge?
It is illegal for creditors to continue to call or contact you about debt collections after you’ve declared bankruptcy. If they do continue to call you, you should contact your attorney who can help you file a complaint against them.
Can I file for bankruptcy more than once?
You are allowed to file for bankruptcy more than once. However, know that there are specified wait times in between filings. Also, the more times you file, the harder it will be to establish new credit.
Do I need a bankruptcy attorney?
There’s nothing in the law that says you have to work with an attorney when filing for bankruptcy, but the vast majority of individuals find it beneficial to do so. An experienced lawyer can educate you about your choices, help you organize your financial documents, file your declaration, and in most cases, can make the entire process go faster and help you keep more of your assets.
Your Path Forward Starts Here
If you have more questions about filing bankruptcy and are in the Kingsport, Tennessee, area, reach out to me today to learn more. When you work with me, Steven C. Frazier, Attorney At Law, you’ll gain a trusted partner who’s truly committed to getting you the financial relief you deserve.