Bankruptcy - Frequently Asked Questions And Glossary Terms

Are you looking for answers about bankruptcy? Are you nearing bankruptcy and need to know as much as you can fast? Read through these select FAQs and glossary terms, and find the answers you need and the terminology you'll need to understand.

BANKRUPTCY FAQS

Can I file for bankruptcy myself?

Although you can file yourself, hiring a bankruptcy attorney is a better option. Filing for bankruptcy is complicated and often confusing. By hiring a professional, you ensure that the correct paperwork is filed and that the process will go smoothly.

Will I have to sell my house if I file for bankruptcy?

Under some chapters of bankruptcy, you must sell your assets, while other chapters permit you to keep them. Whether you can keep your home depends on the amount of equity you have in the home and the chapter you qualify under. A bankruptcy attorney can advise you about your options and rights.

Does bankruptcy discharge student loans?

In most cases, student loans cannot be discharged in bankruptcy. A bankruptcy judge can discharge them in extreme hardship situations, but this is rare and requires additional court filings.

Will my spouse be affected by my bankruptcy?

No. If your spouse didn’t sign any agreements that would include her in the bankrupt accounts, your spouse will not be affected by your bankruptcy. There are exceptions to this rule in different states so consult a bankruptcy lawyer for specifics.

What debts does bankruptcy NOT erase?

There are a number of debts that aren’t erased by bankruptcy. For starters, those debts you fail to list on your bankruptcy papers are not erased. Other debts not erased include student loans, alimony, child support, and tax debts.

Should I use a bankruptcy lawyer or file my own bankruptcy?

If you don’t know a thing about bankruptcy, it’s a good idea to hire a lawyer. They typically range between $1,000 and $2,000 and can file all paperwork necessary to have a smooth bankruptcy.

BANKRUPTCY TERMINOLOGY

Assets: Everything the debtor owns. In addition to physical property like a house or car, intangible property like stock options is included.

Automatic Stay: An injunction against debt collection is issued immediately upon filing for bankruptcy and typically lasts until the end of the proceedings.

Chapter 7:Liquidation bankruptcy. Under chapter 7, assets are sold and the proceeds are used to pay debts. This chapter is also for people without assets.

Chapter 11: Reorganization bankruptcy. Chapter 11 is commonly used by businesses.

Chapter 13: Reorganization bankruptcy. The court will order a repayment plan for individuals with the ability to repay some debts or who have debts not dischargeable in bankruptcy.

Confirmation: A court order that makes the reorganization plan binding.
Creditor: Any person or organization to whom the debtor owes money or has a legal obligation.

Discharge: The elimination of debt through bankruptcy. Some debts cannot be discharged, including student loans, child support, and tax liens.

Lien: A collateral claim against property. Mortgages and car loans are voluntary liens. Judgments and tax liens are involuntary.

Means Test: A new procedure introduced in 2005 to verify whether a person has the ability to repay debts under chapter 13 or is eligible for chapter 7.

For more information, resources, and guides on bankruptcy, visit http://www.bills.com/bankruptcy/