Bankruptcy FAQ
COMMON BANKRUPTCY QUESTIONS & ANSWERS:
Will I lose all my property if I file for bankruptcy?
A: No. The bankruptcy code allows you certain exemptions to protect your property in bankruptcy. Most people do not exceed these exemptions and do not lose any of their property. If you are one of those few people who do exceed their exemptions, I will probably advise you to file a Chapter 13 bankruptcy. Except in a few rare cases, none of your property will be sold in a Chapter 13 case.
Can I keep paying (and keep) my house and/or car after I file for bankruptcy?
A: Yes, in most cases. In a Chapter 7 bankruptcy, unless you are several months or more delinquent in your house or car payments, you can continue making your monthly payments (you will have to bring them current) and keep your property. If you are being foreclosed or in danger of car repossession, a Chapter 13 bankruptcy will allow you to keep your property, so long as you are able to make all future monthly payments and pay a little extra each month to cure the arrearage.
What’s the difference between Chapter 7 and Chapter 13 bankruptcy?
A: A Chapter 7 bankruptcy allows you to discharge unsecured debts without making payments to those creditors. However, if you have real or personal property which exceeds your allowable exemptions, the Chapter 7 Trustee will sell such property and give the money to your unsecured creditors. Not everyone qualifies for Chapter 7 bankruptcy. The primary reason for this is if your income is higher than what is allowed by the Bankruptcy code.
A Chapter 13 bankruptcy is similar to debt consolidation, done under the supervision of the bankruptcy court. Most Chapter 13 plans provide for making monthly payments to your unsecured creditors for a period of at least 36 months, and in some cases longer. After that period, you are able to receive a full discharge of all listed unsecured debt. The amount of your monthly payment depends upon several factors, including your disposable income (after normal monthly expenses) and the excess equity in your property that exceeds your allowable exemptions. I will be happy to explain all this to you at your free consultation.
How difficult is it to re-establish credit after receiving a bankruptcy discharge?
A: The majority of Chapter 7 clients have been able to obtain new credit cards, finance car purchases, purchase or refinance homes, and obtain other kinds of credit within two years of obtaining their discharge. Many Chapter 13 clients have been able to finance the purchase of needed cars and refinance their homes while they are still in Chapter 13 bankruptcy. Under the current economic circumstances, it is difficult to predict whether people will find it more difficult than in the past to re-establish their credit after completing either a Chapter 7 or 13 bankruptcy. However, most people contemplating bankruptcy would even more difficult problems obtaining credit without bankruptcy.
What’s the difference between a secured debt and an unsecured debt?
A: A secured debt (like a mortgage on a house or a car loan) gives the creditor the right to take back the security (car, house, furniture, etc.) if you fail to make your payments. An unsecured debt (like a Visa or MC credit card, medical bill, utility bill, rent, etc.) does not give the creditor the right to repossess any property you have. All the creditor can do is to sue you for the money it is owed. Secured debts are not removed (discharged) in bankruptcy, but they can be paid off in a Chapter 13 bankruptcy.
When can I see you for a consultation, and is there a charge?
A: I work strictly by appointment, during weekdays. My office is located in downtown Seattle, in the Belltown neighborhood, at the corner of 6th and Blanchard. There is no charge for the initial consultation. I will also be happy to talk with you, briefly, by telephone, prior to scheduling a consultation appointment.
GARNDER BOND TRABOLSI PLLC
2200 Sixth Avenue, Suite 600
Seattle, WA 98121
206-256-6309
Cell: 206-714-5363
The assistance offered may involve bankruptcy relief.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
