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General Questions

What is the purpose of claiming bankruptcy?

The primary purpose of claiming bankruptcy is to release debtors of liability from particular debts and give them a financial fresh start.

What is a discharge in bankruptcy?

A bankruptcy discharge pardons the debtor of liability for the debt. After the debt is discharged, the debtor has no legal obligation to pay the debt. Although the debtor is released from being personally liable for the debt, creditors may still enforce valid liens.

Can you file for bankruptcy without a lawyer?

The short answer is yes, however it is highly discouraged. The complexity of the forms and timelines when filing for bankruptcy makes it difficult for inexperienced individuals to properly file.

How many chapters of bankruptcy exist?

Six different chapters of bankruptcy exist. These Chapters are 7, 9, 11, 12, 13 and 15. Generally bankruptcy lawyers focus on no more than two or three chapters because the remaining chapters are reserved for unique and rarely occurring circumstances.

What is automatic stay?

By filing a petition for bankruptcy, the debtor is granted an automatic stay which stops most creditors’ collection actions. This can include wage garnishments, lawsuits and even phone calls regarding the debt.

Chapter 7

Why is it important to seek alternatives to Chapter 7?

It is important to research benefits to claiming Chapter 7 bankruptcy because the debtor risks having all non-exempt assets being liquidated. With the proper legal advice, you may find a financial fresh start is possible without losing property to liquidation.

What is a means test?

When filing for Chapter 7 bankruptcy, the debtor must complete a means test. This test is designed to assess the debtor’s ability to repay the debt in question by analyzing their current income and debts.

How does Chapter 7 bankruptcy work?

Chapter 7 bankruptcy is the liquidation of the debtor’s non-exempt assets to pay creditors. The debtor’s non-exempt assets will be sold and the proceeds distributed to creditors. However, most people only have "exempt assets" and keep their property in a Chapter 7 case.

What is the role of the trustee in a Chapter 7 bankruptcy case?

The trustee appointed in a Chapter 7 bankruptcy case is responsible for analyzing and investigating the debtor's assets to determine if the debtor has any non-exempt assets that pay can be sold to pay creditors.

Is it likely to receive a discharge when claiming Chapter 7?

The vast majority of individual debtors who file for Chapter 7 bankruptcy are granted a discharge. Few reasons exist for denying a discharge in a Chapter 7 case. Reasons for denial include, not keeping accurate or adequate financial records and failing to obey bankruptcy laws.

Chapter 13

Chapter 13 VS Chapter 7, what is the difference?

Chapter 13 is different from Chapter 7. Those individuals who file for Chapter 13 have very different issues than those filing for Chapter 7.

Who is eligible for Chapter 13?

Any individual is eligible for relief under Chapter 13 assuming their unsecured and secured debts are less than the amounts set by the bankruptcy courts. These amounts are regularly adjusted to reflect changes in the consumer price index.

How does Chapter 13 bankruptcy work?

Chapter 13 bankruptcy requires the debtor to file a repayment plan with the court. This plan must be approved by the court during a confirmation hearing. Once the plan is approved, creditors cannot continue collection attempts. Payments from the debtor are then collected by a court appointed trustee and distributed to creditors in accordance with the plan. Completion the plan will release the debtor of liability for the remainder of the debts.

What is the role of the Plan in Chapter 13?

When claiming Chapter 13 bankruptcy, the debtor must file a repayment plan with the petition or within 14 days of filing the petition. This plan must be approved by the bankruptcy court during a confirmation hearing. The plan itself must outline how regular payments will be made, usually in biweekly or monthly intervals. Completing an approved plan will release the debtor from remaining debt liabilities.

How does a discharge work with Chapter 13?

A debtor filed under Chapter 13 is entitled to a discharge upon completion of the plan. A hardship discharge may be granted if circumstances appear which may prevent the debtor from completing the plan after confirmation of the plan has occurred.


The FAQ above is not a guide on how to file bankruptcy. The information contained should in no way be used as a substitute for competent legal advice. If you are thinking about filing for bankruptcy it is highly recommended that you contact a reputable attorney to discuss your options.