Chapter 7 – Frequently Asked Questions
FAQ – Frequently Asked Questions
Below is a list of questions which our clients often ask. For your own education about bankruptcy as pertains to Chapter 7, please feel free to peruse questions from the list below with the corresponding answers further below on this page. If you have a question not answered here, please feel free to email us at email@example.com
1. If I file bankruptcy will I lose my house?
2. How much does your firm charge?
3. I hardly have any money, how can I afford to pay you guys?
4. What is the court filing fee for bankruptcy?
5. Do I have to go to court?
6. What’s the most debt I can have and still qualify for a discharge?
7. Can you prepare and file our bankruptcy, and let us pay you later?
8. If I file bankruptcy will I lose my car and other possessions?
9. I can no longer afford my car (monthly payments) – can I put it in the bankruptcy?
10. How long does the whole process take?
11. I filed a Chapter 7 bankruptcy several years ago, how soon can I file again?
12. Will filing bankruptcy ruin my credit? (Will my credit score go down?)
13. How long will bankruptcy stay on my record (credit reports)?
14. Can I get fired for having filed bankruptcy?
15. A paralegal / document preparation service made a mess of my paperwork and the trustee told me to make a variety of changes to my bankruptcy. Can we hire you to fix it?
16. A paralegal / document preparation service prepared my petition but I really want an attorney to be with me during my hearing. Can we hire you to go?
17. My case got dismissed because I did not take the second mandatory course on time. Do I have to start all over again?
18. How long does the whole bankruptcy process take and how soon can I move on with my life?
1) If I file bankruptcy will I lose my house?
If you own a home, are current on your payments, and your equity is not above the exemption amounts (this can range from just over $23k to over $100k), then we can protect your home and you will not lose it. If you are behind on your payments however, filing a Chapter 7 case will postpone any sale of your home by the lender, however after about 4 to 8 weeks they will lift your automatic stay and proceed with whatever they were planning to do with your home prior to the filing.
2) How much does your firm charge?
Our fees are kept low since we are efficient. Fees range depending on the complexity of ones case but range from approximately $1,100 to $2,000 on the high end. We are happy to consult with you over the phone to go over your case and give you a more precise quote.
3) I hardly have any money, how can I afford to pay you guys?
Easier than you think – with us. Unlike other firms that demand a pile of money upfront before they’ll even analyze your case (you’d be surprised how many will take your money before even seeing if you qualify for bankruptcy), AFTER analyzing your case to see if you’re a good candidate for bankruptcy we allow you to pay us in instalments, as large or as small as you’d like. Clients typically start with a few hundred dollars to retain us and they pay us over the course of several months or longer depending on their financial situation. We do not charge interest or finance charges. Also you will NEVER receive a phone call from us asking for money. Many firms will keep your money and make you start over with payments if you don’t pay your balance within 90 days. We’ll never do that. Please note however we cannot file your case until your entire balance is paid in full.
4) What is the court filing fee for bankruptcy?
The Federal government charges $306 to file a Chapter 7 bankruptcy. This fee goes to help pay for the trustee assigned to your case, and general court costs.
5) Do I have to go to court?
No. You DO have to go to a 341A hearing (aka Meeting of Creditors)., and yes, we do go with you to that hearing. This hearing is not the same as court. It is an administrative hearing in which an interim trustee (typically another private attorney) interviews you and asks you questions about your paperwork. Their primary job is to look for assets that can be liquidated for the benefit of creditors. Our job is to properly exempt and protect your assets.
6) What’s the most debt I can have and still qualify for a discharge?
There is no debt limit in Chapter 7 cases. If you have $10,000 in credit card debt or $1.5 million in mortgage balances from old investment properties, it can be discharged. Chapter 13 however does have debt limits. Please see the FAQ for that information.
7) Can you prepare and file our bankruptcy, and let us pay you later?
Unfortunately, no. Based on the way bankruptcy laws are structured, we require all fees to be paid in full before we can file your case otherwise the debt that you owed to us would also get wiped-out in the same bankruptcy that we filed for you! We DO offer flexible payments plans to make it very easy to pay us over time in installments. Call for more details.
‘8) If I file bankruptcy will I lose my car and other possessions?
No. There is a misconception amongst some people that bankruptcy means the court takes everything you have and you will be left on the street shirtless. This could not be further from the truth, especially in California where the exemption laws allow you to actually keep quite a bit in terms of possessions. Most people filing bankruptcy do not have assets beyond the exemption amounts. It is our job to apply the proper laws to ensure that you keep everything you have and if there is something we feel may be subject to liquidation, we will let you know in advance and provide you with options. Most people keep everything they have.
9) I can no longer afford my car (monthly payments) – can I put it in the bankruptcy?
Yes. If you’d like to let your car go since the payments are too high, you can surrender it and you will not be obligated for the balance after the bankruptcy. Note however, if your payment is overly high, some trustees may not object to you keeping a car with such a high payment anyway. Additionally, before filing we can attempt to negotiate with your lender as well.
10) How long does the whole process take?
Once your case is filed you will have your 341 hearing approximately a month later. From date of filing to discharge can range from 4 to 6 months although recently our clients have been receiving their discharges closer to the 4 month mark if not even earlier.
11) I filed a Chapter 7 bankruptcy several years ago, how soon can I file again?
You may file a Chapter 7 once every eight years. You may however file a Chapter 13 sooner if you are getting garnished or have issues with your home that you’d like to save.
12) Will filing bankruptcy ruin my credit? (Will my credit score go down?)
No – quite the opposite! In most cases, our clients’ FICO scores increase significantly. Often we by the time someone comes to us their score may be hurting. We have seen people’s scores increase from as low as 480 all the way up to 620 in just one year BECAUSE they filed bankruptcy. It may sound counter-intuitive, but in the vast majority of cases, bankruptcy actually improves your score.
13) How long will bankruptcy stay on my record (credit reports)?
A bankruptcy will remain on your credit report for seven to ten years. Do not let this scare you however as it will not hinder you from getting new cards, cars, and even home loans (home loans will have to wait for a couple of years).
14) Can I get fired for having filed bankruptcy?
You should not get fired from your job if you file for bankruptcy. Additionally, there are certain Federal laws which prohibit employers from discriminating against you based on filing bankruptcy.
15) A paralegal / document preparation service made a mess of my bankruptcy paperwork and the trustee told me to make a variety of changes to my bankruptcy. Can we hire you to fix it?
No. We do not fix other company’s work as in many instances it takes more time to fix other people’s mistakes than do it from the start. If your case was dismissed we will be happy to prepare it from scratch and re-file your paperwork properly. Additionally, if you have prepared and filed your own case, we cannot fix any errors for you.
16) A paralegal / document preparation service prepared my petition but I really want an attorney to be with me during my hearing. Can we hire you to go?
No. We can only represent the work that we do and avoid risking our reputation by putting our face behind someone else’s work. The same applies if you have tried to prepare and file your own case.
17) My case got dismissed because I did not take the second mandatory course on time. Do I have to start all over again?
Not necessarily (how do you like that for a standard lawyer answer?) If much time has passed (perhaps several months), you may need to re-file the case again assuming no bar has been places on you. Otherwise, there are measures we can take to attempt to have your case salvaged and your course filed.
18. How long does the whole bankruptcy process take and how soon can I move on with my life?
From the day we file your case, it is about four to six months until you will receive your bankruptcy discharge (meaning your debts will be officially eliminated), and your case will close shortly thereafter. We have noticed that things have begun moving much faster this year and many of our clients have been seeing their cases finish within only three months of filing!
Have any questions that aren’t answered here? Please feel free to email us at firstname.lastname@example.org and we will be happy to answer your question and post the response here!