Bankruptcy - Frequently Asked Questions
Q. Can you still file bankruptcy ?
A. Yes. The changes in the law effective in 2005 affect some cases, and have little impact on some cases.
Q. What is the difference between Chapter 7 and Chapter 13?
A. Chapter 7 is generally open and shut, and never involves a payment plan.
Chapter 13 is a payment plan designed to pay creditors based upon your ability to pay.
Q. Which Chapter should I file?
A. Chapter 7 may be a solution for unsecured debt, such as credit cards or medical bills, if you do not have the ability to pay them.
Chapter 13 is suited for catching up on secured debt, such as house and car payments, paying priority creditors, such as the IRS or child support, and paying other creditors to the best of your ability over a period up to five years.
Q. What is the Means Test?
A. In a nutshell, the Means Test is the Bankruptcy Code's way of determining whether you should be allowed to file Chapter 7. Your average monthly income, based on the most recent six months, is compared to monthly expenses, some actual and some national standards, to arrive at your monthly disposable income.
Q. Will bankruptcy ruin my credit forever?
A. No. A bankruptcy may be reflected on your credit report for ten years. In many cases, your credit score has already suffered. You may find that you can reestablish your credit fairly quickly after a bankruptcy.
Q. How do I find out more about bankruptcy?
A. You may find the links on the Resources page of this site helpful. Of course, you may call me at 281-587-2823 for a free consultation in the office.