HOW MUCH DOES IT COST TO FILE BANKRUPTCY?
The filing fee for a Chapter 7 case is $200 and for a Chapter 13 case is $185.
The attorney's fees depend upon the complexity of the case and the number of creditors. Chapter 7 cases start at $700 and Chapter 13 cases start at no money down with the fee starting at $2,000 paid in the plan.
HOW LONG DOES A BANKRUPTCY STAY ON MY CREDIT RECORD?
Any bankruptcy stays on your record for 10 years, while the debts themselves, if you do not file bankruptcy, stay on your record for 7 years.
HOW MUCH DO I HAVE TO PAY PER MONTH IN A CHAPTER 13 CASE?
There is no minimum payment. You pay what you can afford, but it must be at least enough to pay any taxes, child support, alimony and secured debt you owe plus interest within 5 years.
DO I HAVE TO LIST ALL MY DEBTS OR CAN I JUST FILE AS TO ONE DEBT?
You must list all of your debts. Since the papers are filed under penalty of perjury, it is a federal crime to intentionally leave off creditors. You may be able to pay a creditor in full before you file to avoid having to list it, but talk to your attorney before you do to make sure it will not cause other problems. Another option is, after the bankruptcy is filed, to enter into a reaffirmation agreement with the creditor wherein you agree to pay the debt. Again consult with your attorney to see if this is an option.
CAN I WIPE OUT TAXES IN A BANKRUPTCY?
Yes. If you filed your 1040 returns on time and the taxes are at least 3 years old or you filed them late but they have been on file for at least 2 years and the IRS has not assessed new taxes withing the last 8 months, you can wipe out the taxes in a Chapter 7 case or pay what you can afford to pay in a Chapter 13 case. Payroll taxes are not wiped out in a Chapter 7 case and they must be paid in full in a Chapter 13 case, possibly without interest.
DOES MY SPOUSE HAVE TO FILE BANKRUPTCY WITH ME?
No. But it does not cost any more for both of you to file together and in most cases it is better for both of you to file.
I AM GETTING DIVORCED. SHOULD I WAIT UNTIL AFTER THE DIVORCE IS FINAL TO FILE?
If you both are going to file Chapter 7 together, you must file before the divorce is final. If not, then it is usually better to wait until the divorce is final. However, if you are ordered to pay a debt as part of the divorce and if your ex-spouse complains, you may have to pay the debt if you have an ability to pay the debt after all of your other debts are wiped out.
CAN I USE MY CREDIT CARDS AFTER I FILE BANKRUPTCY?
Not if you file Chapter 13. If you file Chapter 7, you can, unless the credit card company finds out about the bankruptcy and cancels the card. This is possible even if you do not owe any money on the card and thus you do not have to list the credit card company as a creditor. However, since one of the main causes of having to file bankruptcy is excessive credit card debt, it makes no sense to incur new debt and not be able to pay it.
DO I GET TO KEEP MY INCOME TAX REFUND?
Possibly. It depends upon whether you file Chapter 7 or 13 and what other property you have.
I HAVE A PERSONAL INJURY CLAIM PENDING. WHAT HAPPENS TO THE CASE?
If you file Chapter 7, you could lose complete control over the claim and any settlement or recovery could go to the Chapter 7 Trustee to pay your bills. If you file Chapter 13, you would maintain control, but all or part of any settlement or recovery may have to go to pay your bills.
CAN MY CREDITORS OR THE TRUSTEE TAKE MY HOUSE, MY CAR OR MY PAYCHECKS FROM ME?
Not if you file Chapter 13. Otherwise, only creditors who have a lien can take these from you if you do not stay current.
I AM BEHIND ON MY HOUSE AND CAR PAYMENTS. DO I HAVE TO COME UP WITH ALL THE BACK PAYMENTS TO FILE BANKRUPTCY?
No. In a Chapter 13 case you can make up the payments in the Chapter 13 plan. In a Chapter 7 case you can enter into a reaffirmation agreement to make up the payments, if the creditor will agree.
WHERE IS THE BANKRUPTCY COURT AND HOW MAY TIMES DO I HAVE TO GO TO COURT?
The Bankruptcy Court is located downtown in the Old Main Post Office near the Alamo. In most cases you will only have to go to court once for the Meeting of Creditors which occurs 20-40 days after you file.
CAN I STILL MAKE DONATIONS TO THE CHURCH AND SEND MY CHILDREN TO PRIVATE SCHOOL IF I FILE BANKRUPTCY?
Yes. However, if you file Chapter 13 the amount must be reasonable and must be something you paid previously.
WILL I BE ABLE TO BORROW MONEY AFTER I FILE, SUCH AS FOR A NEW CAR OR A WASHER AND DRYER?
Yes, but you may pay a higher interest rate and it may be difficult to find someone to loan you the money. If you file Chapter 13, you will need court permission to do so. This may exist for ten years, since the bankruptcy stays on you credit report for ten years.
I FILED BANKRUPTCY BEFORE. CAN I FILE AGAIN?
Yes. If it has been six years since you previously filed Chapter 7, you can file Chapter 7 again. You can file Chapter 13 at any time, as long as you are not abusing the process and there are legitimate reasons why you have to file again and why your case did not work before. Be sure to tell your attorney about the prior case, because it must be disclosed on your petition.
This pamphlet is provided as a service and is not a substitute for legal advice. Further, it is based upon the United States Bankruptcy Code as amended in 1997. The United States Bankruptcy Code and the Courts' interpretation of the Bankruptcy Code can and will change.
