The Bankruptcy FAQ and Answers below are a guideline to help you assess filing a bankruptcy. Please ask specific questions to an attorney.
1. Can I file for bankruptcy and still keep my house? What about my car/truck? Can I keep my retirement?
Many families file for bankruptcy and do keep their homes. This answer depends on the current equity in your home and whether or not you are current on your mortgage payments. The mortgage payments will need to be paid while you are in and after discharge from bankruptcy to keep your home. The Oregon statutes protect the first $40,000 in home equity for an individual filer their homestead (where you are living), and $50,000 for a married couple filing a case. If you are not current on your mortgage payments you should consider discussing this with an attorney who may suggest a Chapter 13 filing. If your home value is less than the first mortgage debt, and you also owe a second, third or HELOC debt, you should consider discussing this with an attorney. Possibly a lien strip in a Chapter 13 case could help you permanently remove these additional secured debts from your home.
You are entitled to a maximum amount of equity in each family vehicle. Most families will keep their autos while filing a bankruptcy case. If your auto has debt against it you need to continue to make all auto payments to keep the vehicle. You should consider discussing your auto equity with an attorney if you have questions on this issue.
All ERISA-qualified retirement accounts are exempt. Generally, your federal and state pensions are also exempt. If you are not sure if your retirement funds are exempt please discuss that question with an attorney.
2. How do I know if I should file a bankruptcy?
Generally, when you are unable to pay your monthly bills as they come due considering a bankruptcy would make sense. You will need to analyze your belongings (assets), income, debts you owe (liabilities), and your budget. An attorney can be helpful to analyze these issues with you. Filing a bankruptcy should result in an order of discharge (most debts legally gone forever) and fresh start for the person filing. If you are considering talking to a debt reduction or debt consolidation company, please also meet with a bankruptcy attorney so you will understand all of your legal options. The debt consolidation program could result in your paying more money over time than a bankruptcy would require.
3. What debts cannot be discharged?
Debts that will not automatically discharge include but are not limited to: current back taxes, payroll taxes, damages owed as a result of drunk driving, spousal support or child support, student loans, fines, penalties and criminal restitution, and debts that result from an act of fraud.
4. What will it cost me to file?
The federal court filing fee for a Chapter 7 bankruptcy case is $335.00, and the court filing fee for a Chapter 13 bankruptcy case is $310.00. Attorney fees to assist a client in filing a case and representing a client, can range depending on the specific facts in the case.
I currently charge attorney fees at an average of $1015.00 for representing a client in an individual or joint Chapter 7 case. Some cases will cost less in attorney fees and some will cost more. Cases with complex, overdue, back tax issues, tax liens, business cases, auto undue hardship budget issues, recovery of pre-filing wage garnishments, and cases where there are liens to be removed from real estate (due to a circuit court judgment), are examples of cases that may cost more for attorney fees.
I charge an average of $750.00 upfront, out-of-pocket, before filing a chapter 13 case (includes $310.00 court filing fee) and then $4310.00 over time, as a portion of a client’s regular Chapter 13 monthly plan payments to the case trustee. Some chapter 13 cases will require a larger upfront payment before case filing. Cases with complex, overdue, back tax issues, tax liens, business cases, auto cram down issues, and cases where there are liens to be removed from real estate (due to a circuit court judgment), and or second mortgage being removed from the home, and emergency filings to stop a foreclosure or auto repossession, are examples of cases that may cost more for upfront, pre-filing, chapter 13 attorney fees. I am a priority creditor in the chapter 13 bankruptcy case, and so I receive a check from the Chapter 13 trustee on the balance of owed attorney fees. I currently charge a total attorney fee of $4750.00, as a flat attorney fee, for the life of a Chapter 13 case. The total Chapter 13 fee (attorney fees plus court filing fee) will be $4750.00 in attorney fees, plus $310.00 filing fee = $5060.00. I will be transitioning to itemizing my attorney time in chapter 13 cases within the near future.
5. Do I have to pay attorney fees and the bankruptcy court filing fee before my case files?
Generally, yes. My office policy is to collect all filing fees and attorney fees prior to filing a case, (Chapter 13 cases will generally be a $1000.00 payment before the case files) according to listed amounts above. Please call or email for a personal intake appointment to get an exact estimate on attorney fees for your own individual or joint bankruptcy
Some cases may involve the recovery of an involuntary wage or bank garnishment in the 90 days prior to filing. In certain circumstances I will accept an assignment of a portion of such recovery to apply towards case attorney fees. This issue is fact specific and I can only assess this issue in an individual intake appointment.
6. What happens to my credit if I file?
Your credit reporting agencies are legally able to list your bankruptcy case as part of your credit history for up to 10 years. You can generally get an auto loan or secured credit card loan soon after discharge to rebuild your credit history.
7. Will I get fired from my job if I file? Who will know that I have filed?
No, you should not get fired due to your bankruptcy case filing. Some professions /positions / employers may require you to disclose to your employer if you file a bankruptcy case. Discuss this issue with an attorney prior to filing a bankruptcy case, if you have questions.
Generally no one will know that you have filed a bankruptcy except creditors affected or those that later pull your credit report. If you file a Chapter 13 case a wage order is usually sent to your employer to have the monthly payments come out of your paycheck directly, like a garnishment.
8. What are the credit counseling and financial management courses?
To file for bankruptcy a debtor must complete a credit counseling certificate within the 6 months before the case files. This can be done in person, over the phone or on the internet. There is generally a fee for the course. This certificate must be filed with the Bankruptcy Court.
To receive the bankruptcy order of discharge a debtor must also complete a financial management course before the case has concluded. This can be done in person, over the phone or on the internet. There is generally a fee for the course. This certificate must be filed with the Bankruptcy Court.
9. What is Means Testing?
Means testing is used to assess which chapter of bankruptcy is appropriate to file for different debtors. Debtors who have a 6 month income (multiplied by 2) that exceeds the median income for their family size are deemed able to pay back a portion of their debt and so they are required to file for Chapter 13 bankruptcy relief. Families that are below median are deemed unable to pay their debts back and generally file for Chapter 7 bankruptcy relief. If there is disposable income of over $100 a month for any family, this will require a Chapter 13 case filing.
10. When can I file another bankruptcy?
If you filed for bankruptcy after 10-17-05, the following information will answer how often you can file a new case:
Chapter 7 to new Chapter 7: 8 years after date of original Chapter 7 case filing.
Chapter 7 to new Chapter 13: 4 years after date of original Chapter 7 case filing.
Chapter 13 to new Chapter 13: 2 years after date of original Chapter 13 case filing.
Chapter 13 to new Chapter 7: 6 years after date of original Chapter 13 case filing.
11. How long does it take to get a discharge?
A Chapter 7 Order of discharge generally issues in 90 to 120 days after the case was filed. A Chapter 13 Order of discharge generally issues between 36 to 60 months after the case was filed.
The bankruptcy FAQ page will answer some but not all of your bankruptcy questions. If you have additional bankruptcy questions, please call or email me and I will be happy to answer them for you.