Frequently Asked Questions
Q: How can filing for bankruptcy help me?
Bankruptcy can help to do the following:
- Eliminate the legal obligation to pay most or even all of your debts
- Stop foreclosure of your home and allow you to catch up on missed mortgage payments
- Stop wage garnishments
- Stop debt collection harassment
- Stop repossession of a car, home, and other property (in some situations, the creditor can be forced to return property even after it has been repossessed)
Q: What debts are not discharged through bankruptcy?
Some debts that are non dischargeable include domestic support obligations (debts for spousal or child support, alimony or maintenance), most government-funded or guaranteed educational loans (student loans) or benefit overpayments, court fines, debts for personal injury caused by a debtor’s operation of a motor vehicle while intoxicated, debts for certain condominium or cooperative housing fees, and most taxes, just to name a few.
Q: Will I lose my retirement accounts or Social Security benefits?
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: Am I going to have to go to court?
In most cases, you will have to go to only one court hearing called the "meeting of creditors." Usually this will be short and simple meeting. The appointed trustee will ask you a few questions regarding your finances. Creditors are also allowed to ask you questions, although these questions are not allowed to abusive or accusatory.
Q: Is a creditor allowed to contact me after I have filed for bankruptcy?
During the time the debtor is working out a plan or the trustee is gathering and preparing the assets to sell, creditors are required by law to stop all collection efforts against you. 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 it.