Bankruptcy Lawyer Serving Meridian
EXPERIENCED BANKRUPTCY LAWYER SERVING INDIVIDUALS AND FAMILIES IN MERIDIAN, ID
Deciding to file for bankruptcy in the state of Idaho is a big decision, and one that should not be taken lightly. While there are many good reasons to file for bankruptcy, there are also many good reasons to avoid it when possible. Below are some frequently asked questions regarding Idaho bankruptcy:
1. How can filing for bankruptcy help me? You have the right, under federal law, to file for bankruptcy. One of the factors most people consider in filing for bankruptcy—aside from having their debt wiped out or reduced—is the fact that creditors can no longer harass or threaten them. While this is a benefit of bankruptcy, be aware there are laws which protect you from creditor harassment without filing bankruptcy. If you are facing wage garnishment, filing bankruptcy can also put a halt to that, as well as to foreclosure, repossession of your vehicle, and termination of utility service. Under Chapter 7 bankruptcy, most all of your non-secured debts can be discharged, other than student loans, some tax debt, spousal support and child support.
2. What does bankruptcy not do? There are certain things that filing for bankruptcy won’t do. For example, your secured creditors—such as those who have a lien on your property, or for whom you put up collateral in order to get the loan—may not have their rights eliminated under bankruptcy. While you may be able to eliminate your obligation to pay a secured creditor, you generally will not be allowed to keep the collateral (your home or car) other than under the exceptions rules. You cannot discharge court restitution orders or criminal fines under bankruptcy filing. If you have co-signers on your debts, they may or may not be protected under bankruptcy proceedings, depending on the type of bankruptcy you file, and the nature of the debt.
3. How often are you allowed to file bankruptcy? You are not allowed to file for Chapter 7 a second time until eight years have passed since the first time you filed and your debt was discharged. You are not allowed to file for Chapter 13, until four years have passed from a Chapter 7 discharge, or until two years have passed since your last Chapter 13 discharge. You are not allowed to file for Chapter 7 unless six years have passed since your Chapter 13 discharge.
4. What are the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy? There are basically four types of bankruptcy under the law: Chapter 7 is “straight” bankruptcy, which allows you to basically wipe out the majority of your non-secured debt, and allows you to keep your home (within certain limits), and your car. Chapter 11 is used by businesses and individual debtors with extremely large debts. Chapter 13 is known as debt adjustment, and requires you to repay all or part of your current debt from your regular income. You will be required to submit a repayment plan for three to five years, and the court must approve your plan under Chapter 13. Chapter 12 bankruptcy is reserved for family farmers only.
5. What are the costs associated with filing for bankruptcy? Under Idaho law, it costs $310 to file for Chapter 13 bankruptcy, and $335 to file for Chapter 7 bankruptcy. If you have no money, and little income, you may be allowed to pay these fees in installments to the court. You will also be responsible for your attorney’s fees, but lest you try to do away with this expense by filing on your own, be aware that filing for bankruptcy can be a complex procedure, filled with deadlines which must be met and extensive paperwork which must be filled out correctly. It makes much more sense to pay an attorney and know that your bankruptcy is filed correctly.
6. What property are you allowed to keep if you file for bankruptcy? The property you are allowed to keep following bankruptcy, depends on which type of bankruptcy you file. Under Chapter 7, you can keep the property designated as exempt, which is generally your home and your vehicle, depending on their value, and how much you currently owe on them. You may also be allowed to keep specific secured debts, such as a vehicle, furniture or home, by “reaffirming” those debts, which requires you to file a Reaffirmation Agreement, however you cannot file bankruptcy for that specific debt for the next eight years. In order to reaffirm a debt under Chapter 7, you must bring the debt current, therefore if you are behind on your mortgage or car payment, you will have to catch up on your payments before you are eligible for reaffirmation. Under Chapter 13, you can keep all of your property, so long as your plan meets all the rules of bankruptcy law.
7. Will bankruptcy get rid of all my debts? As noted, there are certain debts which cannot be discharged through bankruptcy. These debts include:
- Any loan you obtained through providing false information to a creditor;
- Child support payments;
- Spousal support payments;
- Any debts not listed on your original bankruptcy petition;
- Student loans;
- Mortgages and other liens not paid in the bankruptcy case, and
- Certain taxes.
8. Will I have to go to court? If you file bankruptcy, even if you have a bankruptcy attorney to represent you, you will still have to attend a proceeding called the “meeting of creditors,” where you will meet with the trustee, and any creditor who opts to attend. These meetings are usually relatively short and not complicated, however you will be asked some questions about your financial situation, and the bankruptcy forms. If there happens to be a complication, or if you dispute a specific debt, then you might have to appear at another hearing.
9. How does bankruptcy affect my credit? If you are considering filing for bankruptcy, then you are likely already behind on your bills, meaning your credit has already been adversely affected. Bankruptcy is not likely to make your credit much worse, although it can. Once you’ve filed bankruptcy, it will show on your credit report for ten years. However, on the flip side, once you have wiped out your debt, you should be in a better position to pay your future bills, and may even be able to get a secured credit card to help you build your credit.
10. Can potential employers see that I’ve filed bankruptcy? Unfortunately, potential employers can see that you have filed bankruptcy, however 11 U.S.C., Section 525, prohibits governmental units and private employers from discriminating against you because you filed for bankruptcy.
If you are considering filing a bankruptcy in Idaho, contact our bankruptcy attorney. We are here to help you!