Bankruptcy FAQs

What happens in the initial consultation?

You will meet with an experienced bankruptcy attorney who will explain to you the differences between Chapter 7 and Chapter 13. You will discuss your financial situation and all options including bankruptcy, debt settlement, debt negotiation, and debt management. Return to Top

What do I need to bring to my first appointment?

Please bring evidence of payments from ALL sources of income for the last six months (paystubs, profit and loss statements, 1099s, tax forms). This helps us determine your eligibility for a Chapter 7 bankruptcy. It is also beneficial to bring an accurate listing of your current debts/bills/assets. Return to Top

What is the Meeting of Creditors?

The Meeting of Creditors (sometimes referred to as the “341 Hearing”) is a mandatory hearing required of all debtors in all bankruptcy proceedings. At this hearing testimony is recorded. The Bankruptcy Trustee assigned to your case will place you under oath and ask you a series of questions. Hearings are scheduled in 30 minute increments, and there are usually six to eight cases called into the hearing room at one time. Creditors may also attend this hearing and ask questions about your financial status, or your petition. . Your attorney will attend this meeting with you, keep you informed of what to expect, and answer any questions you may have. Return to Top

What is the role of the Trustee?

In a Chapter 7, the Trustee is assigned to your case to liquidate any assets you may have that are non-exempt. They seek to fairly distribute monies to creditors, if money or property is available. In a Chapter 13, the Trustee will also review the Chapter 13 plan and provide recommendations/objections ensuring the plan is fair to all creditors. Return to Top

Will I get to keep my timeshare?

In a Chapter 7 bankruptcy, you will not be able to keep your timeshare. However, you will have first bid on “buying it back” from the Bankruptcy Trustee. The money received for the timeshare is then distributed to creditors to pay back some of the debt. This same principal applies to all non-exempt assets. Return to Top

Do I really have to list all of my assets?

Yes. The bankruptcy petition must list ALL assets and ALL debts. Failing to list items can be considered fraud and in violation of the Bankruptcy Code, resulting in fines or imprisonment. It is important for you to tell your attorney the truth so that you can receive the best legal protection for your assets. Return to Top

Can I keep one credit card?

All assets and all debts must be listed on your petition. You can reaffirm a debt with a creditor, but it will be up to the creditor to allow you to keep the card. The trustee (and other creditors) have the right to object to you “favoring creditors”. Return to Top

My brother loaned me money, can I pay him back?

No. Preferential payments are not allowed. If you make a payment to a family member or friend, without paying other creditors, the trustee will require your family member/friend to pay back the money to the bankruptcy estate or require you to pay it back. If your family member fails to comply, the trustee will seek legal action against your family member. To avoid this, list your brother (or other family member/friend) as a creditor in your bankruptcy petition like all other creditors. Do not give preferential payments to family or friends. Return to Top

What is a reaffirmation agreement and do I have to sign it?

A reaffirmation agreement is a new contract with a creditor that binds you to pay the debt. It must be signed and filed with the court. They are not required by bankruptcy law or by any other law and they must be voluntary; must not place too heavy a burden on you or your family; must be in your best interest; and can be canceled anytime before the court issues your discharge or within 60 days after the agreement is filed with the court, whichever gives you the most time.

If you reaffirm a debt and then fail to pay it, you owe the debt the same as though there was no bankruptcy. The debt will not be discharged and the creditor can take action to recover any property on which it has a lien or mortgage. The creditor can also take legal action to recover a judgment against you. Return to Top

How long can I stay in my house?

Depending on the timing of various required notices, it usually takes approximately 120 days to effectuate an uncontested non-judicial foreclosure. This process may be delayed if the borrower contests the action in court, seeks delays and postponements of sales, or files for bankruptcy. More recently, these actions have taken even longer because of the amount of foreclosures occurring. If you have received a notice of sale, you must be out before that date. If you file for bankruptcy, the automatic stay will pause foreclosure, but if you plan to surrender your house in bankruptcy, the proceedings will continue after the proper notices and motions have been filed by the mortgage company with the court. Return to Top

What is the Credit Counseling Requirement?

A credit counseling course is required before you can file for bankruptcy. The United States Trustee’s website has a list of Approved Credit Counseling Agencies. Once the course is completed, a certificate will be sent to you to prove you have completed the requirement. A debtor’s education course (or financial management course) is also required after your bankruptcy petition is filed with the court but before the court will discharge your debts. Return to Top

What is the automatic stay?

The “automatic stay” is a protection provided to you immediately upon the filing of your bankruptcy petition with the Court. This is an order from the court prohibiting any creditor from calling you, harassing you, pursing legal action against you, foreclosing on your home, repossessing your car or other secured property. This is a strong protection that will grant you the relief (and peace and quiet) you’ve been seeking. Return to Top

How long does it take to file for bankruptcy?

Generally, a Chapter 7 bankruptcy, from filing of the petition to discharge, takes four to six months. A Chapter 13, can take up to one year for plan confirmation and three to five years of plan payments.

The amount of time to file the bankruptcy petition with the court depends partly on you. If you come prepared to the initial consultation, properly fill out all of the documents and supply the necessary copies of documents needed (bank statements, pay stubs, tax returns), our office will be able to file for you in two to four weeks. Return to Top

I heard my tax refund will go to the Trustee, is that true?

Yes. When you file for bankruptcy, the trustee will seize your tax refund for that tax year. In a Chapter 13, any tax return monies must be turned over to the trustee for at least 3 years of your plan. Your attorney will discuss this in more detail with you at your initial consultation. Return to Top

Will I ever be able to get credit again?

Yes. After bankruptcy, credit can be rebuilt and credit scores can be improved. It will take time, diligence in making payments on time, and monitoring your credit report for errors. Your attorney will offer you tips on what steps to take after your case has been discharged. Return to Top

What does the Bible say about filing for bankruptcy?

Many Christians struggle with the thought of filing for bankruptcy, out of fear, guilt, and remorse. However, the Bible grants permission for debtors to be forgiven of their debts. Please see this excellent article written by Matthew B. Tozer, Esq. and Ben E. Lofstedt, Esq. for more information and biblical passages on this very topic. Return to Top

How long will bankruptcy stay on my credit?

Your credit report will show a bankruptcy filing for up to ten years after the petition is filed with the court. However, this does not mean your “credit” will be affected for that long. With due diligence, paying new creditors on time, and closely monitoring your credit reports, you can reestablish your credit long before the ten year period is over. Return to Top

Evening and weekend appointments are available.

Please call us for a free consultation 480-917-0340 help@amslawaz.com

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    Law Offices of Alethia M. Scipione P.C. is a federally designated Debt Relief Agency under the United States Bankruptcy Laws. We assist people with finding solutions to their debt problems, including, where appropriate, assisting them with the filing of petitions for relief under the United States Bankruptcy Code.

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    National Association of Consumer Bankruptcy Attorneys