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Bankruptcy Frequently Asked Questions

Bankruptcy Frequently Asked Questions

We compiled this practical blog to answer some of the most Frequently Asked Questions about bankruptcy.

Should I file for bankruptcy?

This is a difficult question with no easy answer. You may want to file bankruptcy if you answer “yes” to any of the following questions:

  • Have you been paying on creditor card for years without lowering the balances?
  • Would it take you more than five years to pay all your creditors in full?
  • Do you have a high-interest car loan, and your car is more than two years old?
  • Is your house underwater?
  • Have you received notice of a lawsuit?
  • Are your wages being garnished?

You also may file to stop creditors from harassing you, taking you to court or garnishing your wages.

Will I lose my house and/or car if I file for bankruptcy?

No, individuals do not automatically lose their home, car, or other property just because they file for bankruptcy. The federal bankruptcy laws and state property exemption laws offer protection for consumers’ most important assets.

What chapter should I file?

The decision to file a Chapter 7 bankruptcy to wipe out your debts or to file a Chapter 13 to consolidate your debt in a structured repayment plan should be made in consultation with a knowledgeable bankruptcy attorney. There multiple reasons to file a chapter 7 vs. a chapter 13.

What are the pros to filing for bankruptcy relief?

  • A fresh financial start
  • Stopping creditor harassment
  • Ability to rebuild your credit
  • Ability to start saving

Can I be denied bankruptcy?

Individuals will only be denied a bankruptcy after allegations of fraud, misrepresentation or perjury are proven true.

What should I expect when I file bankruptcy?

  1. You will need to compile these documents:
    • List of creditors
    • Creditor reports
    • Recent billing statements
    • Proof of income
    • Tax returns
    • Bank statements
  2. You will need to complete required courses:
    • Credit counseling before filing
    • Debtor education (also called financial management)
  3. You will need to review and sign bankruptcy documents
  4. You will need to attend a hearing with the trustee assigned to your case

Can I file for bankruptcy if I am not a U.S. citizen?

Yes, Legal Permanent Residents may take advantage of the bankruptcy laws just like naturalized citizens.

How much does it cost to file for bankruptcy?

You will need to pay attorney fees, a filing fee, and fees to complete required courses. Attorneys charge different fees but can provide you with an estimate on -costs after a consultation. Keep in mind the phrase “you get what you pay for”. An attorney with the lowest fee may provide with the least amount of face time and direct your calls to an assistant. An attorney that charges a fair fee will answer your questions, be available to respond to emails and calls, and meet with you when needed.

What should I look for in an attorney?

An attorney that has significant experience with filing bankruptcy cases. McKenna Storer has over 20 years of experience in representing clients in bankruptcy courts.

Download your complimentary Bankruptcy Checklist for more detailed information and helpful free resources.

Contact Jaime Dowell at McKenna Storer for more information about this guide or any other bankruptcy questions.

If you found this information helpful please read more about personal bankruptcy

Categories Bankruptcy Services

One Response to “Bankruptcy Frequently Asked Questions”

  1. Avatar

    Eli Richardson

    It’s great that you talked about what documents you’d need to file for bankruptcy. In my opinion, we need to be aware of how bankruptcy works. I believe we have misconceptions about it and how declaring bankruptcy really is, so I’ll be sure to share this article with my friends and family. Thanks for the information about bankruptcy and the importance of hiring a lawyer to help you during its process.

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