With few exceptions, any person or business owing money to a creditor can file a bankruptcy petition.

Consumers typically file Chapter 13 bankruptcy, where repayment is made to certain creditors, or Chapter 7 where the debts are wiped out or discharged.  Each chapter spells out:

• What bills can be eliminated.
• How long payment can be stretched out.
• What possessions you can keep.
• Various other specific requirements.

The type depends on your circumstances and if you have assets available to repay all or part of your debts. Bankruptcy laws can be very tricky and involved, so determining if, when and which type of bankruptcy you may need should be made with careful thought and/or with the assistance of a bankruptcy attorney.

Generally, yes; however, care needs to be taken because different rules apply and assets that may be protected under one Chapter may be in jeopardy in another Chapter.

The answer if different depending which Chapter you are considering.

• Chapter 7 – can be filed every 8 years from a previous Chapter 7 filing;  6 years from a previous 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.

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 (and take it to pay off the debt) in the event of bankruptcy. Unsecured debt is not tied to any type of property, and the creditor can’t claim it if you file for bankruptcy. A mortgage or car loan is a secured debt on your property.

No. The types of debts that cannot be discharged vary slightly between chapters of bankruptcy. Generally, the following cannot be discharged:

• Debts for most taxes owed to local, state or federal agencies.
• Debts for money, property, services, credit, etc., which was obtained fraudulently.
• Domestic Support Obligations such as child support, alimony, etc.
• Debts for government sponsored educational loans, unless it can be proven that repayment will cause an undue hardship.
• Debts for death or personal injury caused by the debtor’s drunk driving, or driving under the influence of drugs.
• Debts incurred after a bankruptcy was filed.

Exemptions allow an individual to “exempt” or keep certain kinds of property. Generally, under the bankruptcy code you are permitted to choose either State or Federal exemptions. Typically, bankruptcies filed in the District of New Jersey contain Federal exemptions because they tend to be more generous. Some typical Federal exemptions are:

• $13,400 of value in Household Goods.
• $25,150 of value in your residence.
• $4,000 of value in your vehicle.

Keep in mind, especially for assets that are secured, these amount refer to the equity, if any, found therein; not necessarily the value of same.  For example: if your vehicle has a value of $30,000 and the loan balance of this vehicle is $27,000, your equity is $3,000 and within your exempt amount.  Also, these amounts are double for legally married couples.

No. However, some situations may not warrant filing for bankruptcy. If your financial difficulties are temporary, you may consider making other arrangements with individual creditors for a change in payment amounts or a reduction in the total amount due.

A joint petition is when an individual and a spouse file a single petition. Unmarried partners must each file a separate case or petition.

If one spouse files and the other does not, the one that does not could be responsible for the joint debts, as well as their own.

No. If you’re a co-signer with your ex-spouse on a debt, 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.

Yes. The lender can require the co-signer to make payments on a loan once the principal has declared bankruptcy on the credit.

ALL of creditors must be listed in your bankruptcy. Some creditors may be treated differently depending on their status, but all creditors must be listed.

Generally No. Most qualified accounts such as 401Ks and pensions are fully exempt. Social Security benefits are also protected.

There are many factors that impact the ability to keep your home, including:

• The equity you may have in your home.
• The status of your loan (current or in foreclosure).
• Whether you file a Chapter 7 or Chapter 13.

Bankruptcy can stay on your credit report anywhere form 7 to 10 years.

No. Although at your option, you can file an explanation with the credit reporting agencies briefly describing the events resulting in your bankruptcy.

The decision whether to grant you credit in the future is strictly up to the creditor and varies from creditor to creditor. There is no law that prevents anyone from extending credit to you immediately after the filing of a bankruptcy; however, creditors are not required to extend you credit. Keep in mind, in many cases you are debt free following your bankruptcy, which can be appealing to a potential lender.

Most consumers can be just as effective as a credit repair company in dealing with credit reporting agencies and improving their credit ratings. It simply takes time and patience. While there are non-profit companies in each state that offer credit guidance for a small fee, credit repair companies offer very little relative to the fees they charge.

As soon as your bankruptcy petition is filed and the creditor is put on notice, creditors are required by law to stop all collection efforts against you. This is referred to as the “Automatic Stay”. If a creditor continues to contact you or make any collection efforts, you may be entitled to take legal action against it.

The Bankruptcy Court notifies, by mail, all creditors advising them of:

• The filing of the bankruptcy.
• The case number.
• The automatic stay.
• The name & contact information for the Trustee assigned to the case.
• The date, time & place set for the meeting of creditors.
• The dead-line, if any, set for filing objections to the discharge of debts.

The Trustee’s job is to:

• Administer the case.
• Make sure creditors get as much money as possible.
• Conduct the first meeting of creditors (also called the “section 341 meeting”).
• 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).
• Collect information and documentation from the debtor related to the bankruptcy.

United States Trustees are appointed by the Bankruptcy Court, but are not necessarily lawyers. Their fees are covered by the bankruptcy filing fees or are a percentage of the money distributed in the bankruptcy.

Yes. The Bankruptcy Code allows creditors to object to specific debts in the petition or the repayment or discharge 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, the trustee may collect & sell any un-exempt assets and then distributes the proceeds to the creditors under a predetermined schedule. If there are objections that cannot be resolved, a trial may be necessary to resolve the objectionable issues.
• Chapter 13: Creditors and/or the trustee can object to the plan for repayment or the plan treatment for certain debts. These objections are resolved either by consent of the parties or by trial. If no objections are filed, the plan may be confirmed as filed.

Once you have filed for bankruptcy relief you must attend the creditors meeting conducted by the trustee appointed to your case. You may be asked questions concerning:

• How the situation evolved.
• Details of your assets listed in your petition.
• Details of your income listed in your petition.
• Details surrounding the debts listed in your petition.

Failure to answer truthfully can result in the petition being dismissed or, in extreme cases, a charge of perjury. Creditors are permitted to attend and ask a limited amount of questions relevant to their claim or the petition. In reality, few creditors ever attend this hearing. A creditor  doesn’t waive any rights by not attending this hearing.

As soon as you anticipate filing bankruptcy, stop using your credit cards. Bankruptcy allows the review of questionable purchases for potential fraud. Any major purchases, balance transfers, or cash advances within 90 days of filing will likely be an issue.

A Reaffirmation Agreement is a written agreement made with a particular creditor after the petition is filed, and typically with many of the terms of the original agreement. Within certain time constraints, the agreement must be filed with, and approved by the bankruptcy court. Reaffirming a debt is voluntary and is not required by the bankruptcy code.

Yes. There are times when a debtor may need to reopen his or her case, typically to add an omitted creditor. There may be fees & cost related to same. While rare, the Trustee may also seek to reopen a case when questions arise as to assets omitted or other irregularities.

More people than you realize have filed for bankruptcy relief. It’s simply not something people brag about. Chances are someone close to you has filed. Some more well known people that have filed are:

Abraham  Lincoln, Buffalo Bill, Lawrence Taylor, Mark Twain, Oscar Wilde, Tom Petty, Rambrandt, Tom Sizemore, Lorenzo Lamas, Jerry Lewis, Willie Nelson, Tammy Wynette, P.T. Barnum, John Barrymore, Bjorn Borg, Larry King, Henry Ford, Francis Ford Coppola, Zsa Zsa Gabor, Wayne Newton, Natalie Cole, Walt Disney, Marvin Gaye, Mick Fleetwood, Milton Hershey, Randy Quaid, William McKinley.