FAQ

Who can file bankruptcy?
Anyone who passes a ‘means test’ can qualify for either Chapter 7 or Chapter 13 (if you have enough disposable income). If you have a bankruptcy case that was dismissed within the last 180 days, you will not be allowed to file bankruptcy.

What is Chapter 7 bankruptcy?
Chapter 7 is also called straight bankruptcy or liquidation. To pay off your creditors, a trustee liquidates your assets and distributes the profits to the lenders involved.

What is Chapter 13 bankruptcy?
Chapter 13 enables individuals with enough disposable income to undergo a debtor rehabilitation program or a repayment plan that is stretched out over a period of three to five years.

Which of my debts will be erased if I file for bankruptcy?
Except for the following non-exempt debts, all of your debts can be discharged by bankruptcy:

• Student loans
• Tax debts
• Alimony
• Child support
• New purchases owed that are considered luxury goods

How much will it cost me?
Filing Chapter 7 costs $299 while Chapter 13 costs $274 – excluding legal fees.

Will I lose my home if I go bankrupt?
The trustee will leave your home to you if there’s no equity on it.

I’ve heard that debt reduction services are good bankruptcy options, how can they help me?
While bankruptcy gives off the illusion of an instant clean slate, it can have long-term financial repercussions on your credit standing. Debt reduction services may potentially have a portion of your debts forgiven under new payment terms with your lender.

But won’t that damage my credit standing?
It will temporary reflect negatively on your credit record but as soon as you start clearing your debts under more affordable rates, you will see an improvement on your credit standing. Zero balances highly influence your credit standing.

How long does bankruptcy stay on my credit record?
Bankruptcy can appear on your record for as long as ten years, diminishing your creditworthiness and ability to acquire future credit.

Okay, where do I sign up?
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