Q: What is
bankruptcy?
·
A:
Bankruptcy allows individuals or businesses
(debtors) who owe others (creditors) more money than
they're able to pay to either work out a plan to
repay the money over time or completely eliminate
(discharge) most of the bills.
Q: Who can file
bankruptcy?
·
A:
With few exceptions, any person or business
owing money to a creditor can file a bankruptcy
petition.
Q: Which kind of
bankruptcy should I file?
·
A:
Consumers typically file
Chapter 13 bankruptcy,
where repayment is made to creditors, or
Chapter 7 where the debts
are dismissed. Each chapter of bankruptcy spells
out:
What bills can
be eliminated
How long
payments can be stretched out
What possessions
you can keep
Additional
information
The type depends on your circumstances and if you
have assets available to repay all or part of your
debts. Bankruptcy laws can be tricky and involved,
so determining if, when and which type of bankruptcy
you need should be made with careful thought or the
input of a bankruptcy lawyer.
Q: What do I
need to begin the bankruptcy process?
·
A:
Compile a list of past and present debts as
well as a schedule, or list, or assets and
liabilities. You'll also need a statement of
financial affairs to file with the bankruptcy court
in addition to your
filing fee.
Q: Do you have
to have a certain amount of debt to file?
·
A:
No. However, in some situations it may not
be necessary to file for bankruptcy. If your
financial situation is temporary, you may consider
making arrangements with individual creditors for a
change in payment amounts or a reduction in the
total amount due. If you have little property or
money, filing bankruptcy may not be necessary, as
the creditor may not be able to collect the debt.
Q: Can I change
from one chapter of bankruptcy to another?
·
A:
Generally, yes. In most cases you can
convert to another chapter at anytime during the
proceeding as long as you meet the other chapters
requirements.
The request to convert can be a simple
one-sentence document.
Q: How often can
you file for bankruptcy?
·
A:
Filing bankruptcy can adversely affect your
ability to obtain future credit, rent housing and
even negatively impact a job application. Any
decision to file must be carefully considered.
Chapter 7: Can be filed every 8 years from a
previous chapter 7 filing or 6 years from a prior
chapter 13 filing. Chapter 13: Can be filed 4
years from a prior Chapter 7 filing or 2 years from
a prior Chapter 13 filing.
Q: What's a
joint petition?
·
A:
A joint petition is when an individual and a
spouse file a single petition. Unmarried partners
must each file a separate case.
Q: What happens
if one spouse files for bankruptcy and not the
other?
·
A:
If one spouse files and the other doesn't,
the one who doesn't file could be responsible for
the debts. Review this carefully before filing.
Q: Does my
divorce decree protect me from creditors if my ex
files for bankruptcy?
·
A:
No. If you're a co-signor with your
ex-spouse on a debt acquired while married, the
creditor can require the entire payment of that debt
from you even though the divorce decree assigns the
full debt to your ex-spouse. Your divorce decree may
address any recourse you may have against your
ex-spouse should he default on the loan obligations.
Q: Can a
co-signor of a loan be responsible for a debt if the
other person has declared bankruptcy?
·
A:
Yes. The lender can require the co-signor to
make payments on a loan once the principal has
declared bankruptcy on the credit. This makes it
extremely important when considering co-signing a
loan: Be ready, and able, to pay the loan in the
event that the principal signor defaults.
Q: Can all types
of debt be discharged?
·
A:
No. The debts that can't be discharged vary slightly
between the different chapters of bankruptcy.
Generally, the following cannot be discharged:
Debts for taxes
owed to local, state or federal agencies
Debts for money,
property, services, or an extension, renewal, or
refinancing of credit, which was obtained
fraudulently
Debts that
weren't in the initial list of debts or that the
debtor waived being cancelled
Debts owed to a
spouse, former spouse, or child, for alimony,
maintenance, or support of a spouse or child, with a
separation agreement, divorce decree or other order
of a court of record
Debts owed for
injury to another person or property owned by
another (as in a court judgment)
Debts for
government-sponsored educational loans, unless it
can be shown that repayment will cause an undue
hardship
Debts for death
or personal injury caused by the debtor's drunk
driving or from driving while under the influence of
drugs or other substances (as in a court judgment)
Debts incurred
after a bankruptcy was filed
Q: What's the
difference between secured and unsecured debt?
·
A:
Secured debt is a claim that's secured by
some type of property, either by an agreement or
involuntarily with a court judgment or taxes.
Creditors can generally claim the property that
secures the debt in the event of bankruptcy.
Unsecured debt is not tied to any type of property,
and the creditor doesn't have a claim to their
property. A mortgage is a secured debt on your
property.
Q: What's the
difference between secured and unsecured debt?
·
A:
Secured debt is a claim that's secured by
some type of property, either by an agreement or
involuntarily with a court judgment or taxes.
Creditors can generally claim the property that
secures the debt in the event of bankruptcy.
Unsecured debt is not tied to any type of property,
and the creditor doesn't have a claim to their
property. A mortgage is a secured debt on your
property.
Q: What can I
keep, if anything, if I file bankruptcy?
·
A:
Exemptions allow an individual to keep,
certain kinds of property. State law defines what
assets are considered "exempt," but typically
include:
Jewelry
Vehicles up to a
certain amount
Equity in a home
up to a certain amount
"Tools of the
trade" or tools and equipment necessary to allow the
individual to continue working
Q: Do I have to
file bankruptcy on all the accounts I owe, or can I
keep some?
·
A:
You must include all the debts you owe in
your petition and schedules. You may opt to keep
some debts by "reaffirming" the specific debt.
Q: Will I lose
my retirement accounts or payments from social
security?
·
A:
Generally, no. Retirement accounts that are
ERISA-qualified aren't
considered property of an estate and aren't taken
into consideration as assets. Social Security
benefits are protected from assignment, or
garnishment for debts in bankruptcy. Once paid, the
benefits continue to be protected only as long as
they can be identified as Social Security benefits.
For example, money in a bank account where the
"only" deposits into the account are direct deposits
of Social Security benefits are identifiable and
generally protected.
Q: Will I lose
my home if I file for bankruptcy?
·
A:
Possibly. The factors that impact your
ability to keep your home are:
The state you're
in and the exemptions allowed
The status of
your loan (current or in foreclosure)
The type of
bankruptcy you're filing (Chapter 13 provides more
protection than Chapter 7 as long as payments are
current)
Q: How long does
a bankruptcy stay on my record?
·
A:
Bankruptcies remain on credit reports
anywhere from 7 up to 10 years.
Q: Can I do
anything to remove a bankruptcy from my credit
report?
·
A:
No. Although at your option, you can file an
explanation with the credit reporting agencies
briefly describing the events resulting in your
bankruptcy. If an account is reported inaccurately,
you can request the record be updated to reflect the
actual situation.
Q: When can I
apply for credit again?
·
A:
The decision whether to grant you credit in
the future is strictly up to the creditor and varies
from creditor to creditor. There's no law that
prevents anyone from extending credit to you
immediately after the filing of a bankruptcy, but
creditors aren't required to extend you credit.
Q: Can a "credit
repair" company really save me from bankruptcy?
·
A:
In some cases yes, but you can do the same
thing as
a credit repair company without the fee, it just
takes time and patience.
Q: Can a
creditor continue to contact me after I've filed for
bankruptcy?
·
A:
During the time the debtor is working out a
plan or the trustee is gathering and preparing the
assets to sell, the bankruptcy code dictates that
creditors must stop all collection efforts against
the debtor. As soon as the bankruptcy petition is
stamped "Relief Ordered" upon filing, you're
immediately protected from your creditors. This is
called an
automatic stay. After that
time, if a creditor attempts to collect a debt,
immediately notify the creditor in writing that you
have filed bankruptcy, and provide them with either
the case name number and filing date, or a copy of
the petition that shows it was filed. If the
creditor still continues to collect, you may be
entitled to take legal action against them.
Q: Who lets my
creditors know I've filed for bankruptcy?
·
A:
The bankruptcy court notifies, by mail, all
creditors advising them of:
The filing of
the bankruptcy
The case number
The automatic
stay
The name of the
trustee assigned to the case (if filed under
chapters 7 or 13)
The date set for
the meeting of creditors
The deadline, if
any, set for filing objections to the dismissal of
debts
Whether and
where to file claims
The exact
information in the notice may be slightly different
depending on the chapter under which the case is
filed.
Q: What does a
trustee do?
·
A:
The trustee's job is to:
Administer the
bankruptcy
Make sure
creditors get as much money as possible
Run the first
meeting of creditors
Collect and sell
non-exempt property (in a chapter 7 case) or collect
and pay out money on a repayment plan (in a chapter
13 case)
Obtain
information from you and documents related to your
bankruptcy
United States
Trustees are appointed
by the bankruptcy court, but aren't necessarily
lawyers. Their fees are covered by the bankruptcy
filing fee or are a set percentage of the money
distributed in the bankruptcy.
Q: Can creditors
object to a bankruptcy filing or plan?
·
A:
Yes. Bankruptcy filings allow creditors to
object to specific debts in the plan or the
repayment or cancellation in its entirety.
Chapter 7:
Creditors generally have 60 days after the first
creditors meeting to object to the discharge of a
specific debt. If no objections are filed, the court
issues the discharge order and the trustee collects
and sells the assets then distribute the proceeds to
the creditors under a predetermined schedule. If
there are objections, the bankruptcy proceedings,
less the objected debt(s), continues. A trial may be
necessary to resolve the objectionable issues.
Chapter 13:
Creditors can object to the plan for repayment and
the court may take this into consideration. If no
objections are filed by creditors or the trustee,
the plan may be confirmed as filed.
Q: What happens
at a creditors meeting?
·
A:
The debtor must attend the creditors'
meeting conducted by the trustee appointed to their
case. The debtor must answer questions concerning:
How the
situation evolved
Any actions
taken with the property
Debts listed in
the petition or any other financial information
requested by the trustee
Failure to
respond truthfully can result in the petition being
dismissed or, in extreme cases, a charge of perjury.
Creditors may attend and question the debtor about
the assets or any other matter relevant to the
bankruptcy. A creditor doesn't waive any rights by
not attending the creditors meeting.
Q: What if I've
forgotten to include a debt on my schedule? Can I
add it later?
·
A:
You may typically file an amendment to
correct it. Remember, you're submitting the petition
under the penalty of perjury, so take care with the
initial filing. Also, any debt that isn't on the
list can't be discharged and you'll be responsible
for it.
Q: When do I
have to stop using my credit cards if I'm planning
on filing for bankruptcy?
·
A:
As soon as you anticipate filing bankruptcy,
stop using your credit cards. Bankruptcy law allows
the review of questionable purchases for potential
fraud. If purchases are made 40 days prior to filing
or cash advances taken within 20 days of filing, the
debt may possibly be excluded from the bankruptcy
and it can be dismissed.
Q: What's a
reaffirmation agreement?
·
A:
When you "reaffirm" to pay off a debt,
you're legally obligated to pay all or a portion of
an otherwise cancellable debt. This is voluntary and
not required by bankruptcy codes. You may
voluntarily repay any debt instead of signing a
reaffirmation agreement, but there may be valid
legal reasons for wanting to reaffirm a specific
debt, such as a vehicle loan or student loan.
Q: Can a
bankruptcy be reopened?
·
A:
Yes. Typically, a bankruptcy case is
reopened by the trustee when questions arise
concerning what was included or possibly omitted, or
any other irregularities that surface.
Q: How's an
inheritance treated in a bankruptcy case?
·
A:
How an inheritance is treated in bankruptcy
depends on when you become entitled to receive it
and what type of bankruptcy relief you're seeking.
If you've filed for Chapter 7 bankruptcy, and you
become entitled to an inheritance within 180 days of
your filing date, the inheritance will be a part of
your bankruptcy estate, and can be used to pay your
debts. The important date is when your right to the
inheritance is fixed, typically on the date of a
person's death. You might not receive property or
money from someone's estate for many months.
If you've filed
a Chapter 13 case, your inheritance can be used in
determining how much you have available to pay
creditors under your repayment plan, and the 180-day
limit doesn't apply. In either type of bankruptcy,
you must inform the bankruptcy trustee about the
inheritance. If you're thinking about filing for
bankruptcy, ask a bankruptcy lawyer how an expected
inheritance might factor into your plans.
At The Beard Law Group our attorney’s are well
versed in the Alabama law surrounding automobile
accidents, and can help ease the litigation or
settlement process regardless of what side of the
accident you are on.
IMPORTANT THINGS TO KNOW
Alabama has a two (2) year statute of limitations
on personal injury claims. This means that you have
two years from the date of the accident to file your
claim or two (2) years from the time in which you
discover the injury. Once this two (2) years has
elapsed you will be barred from making a claim for
your injury.
Alabama requires all Alabama licensed motorist to
carry liability insurance. The statute requiring
liability insurance is contained in The Code of
Alabama 1975, Section 32-7A-4, which states in part:
- (a) No person shall operate, register, or
maintain registration of, and no owner shall
permit another person to operate, register, or
maintain registration of, a motor vehicle
designed to be used on a public highway unless
the motor vehicle is covered by a liability
insurance policy, motor vehicle liability bond,
or deposit of cash.
Alabama law also requires an accident report when
there is any damage and/or injury. The statute
requiring a report to be filed is contained in The
Code of Alabama 1975, Section 32-7-5, which states
in part:
- The operator of every motor vehicle which is
in any manner involved in an accident within
this state, in which any person is killed or
injured or in which damage to the property of
any one person, including himself or herself, in
excess of two hundred fifty dollars ($250) is
sustained, shall within 30 days after the
accident report the matter in writing to the
director…If the operator is physically incapable
of making the report, the owner of the motor
vehicle involved in the accident shall, within
10 days after learning of the accident, make the
report.
Alabama has a guest statute. A guest statute bars
recovery from the passenger that is riding in the
car that causes an accident, unless there has been
some type of payment by you for the ride. In short,
unless you and the driver are sharing traveling
expenses, (i.e. paying for gas), you will be unable
to recover for your injuries.
If you are in an automobile accident here are a
few things you should know:
- Do not leave the scene of the accident. Leaving the scene of the accident if damage is involved could result in criminal penalties.
- Call the police and make a report. The report is needed to acquire statements from all parties involved and map out the accident. Reports are also needed for insurance purposes, as well a state mandated.
- Provide the police officer with your
insurance. If you are responsible for the
accident then it is important to provide the
other party with your insurance information.
