Bankruptcy FAQ

What is Bankruptcy?

Bankruptcy is the legal process that allows an individual or company to eliminate their debts. The right to file bankruptcy is provided by federal law and all bankruptcy related matters are handled in federal court.

What does bankruptcy do for me?

The filing of a Chapter 7 or Chapter 13 Bankruptcy places an immediate stay to all collection activities, including collections calls and letters, wage garnishments, and foreclosures.

How often can I file for Chapter 7 Bankruptcy?

An individual can file a Chapter 7 Bankruptcy every eight years. The eight year period begins on the date of filing of the previous case.

How often can I file for Chapter 13 Bankruptcy?

An individual can file a Chapter 13 Bankruptcy any time after the filing of a Chapter 7 Bankruptcy. However, that individual would not be eligible for a discharge until four years after the filing of a petition for Chapter 7 Bankruptcy if the individual received a discharge.

What documentation do I need to file Bankruptcy?

  • Paystubs or proof of income from all sources for this month and the last 6 months including self-employment.
  • Your most recent monthly statement for all credit cards, utilities and collection letters
  • Driver's license and social security card
  • Last four years tax returns
  • Credit counseling. Our preferred provider is InCharge Education Foundation.
  • Life insurance policy info
  • Market analysis on home or any properties owned
  • Proof of current auto insurance
  • Completed Client Questionnaire (PDF)

What determines if I am eligible to file Chapter 7 Bankruptcy?

Eligibility for Chapter 7 Bankruptcy is based on the gross amount of income earned by all members of your household, your ability to repay your debts, the value of any real estate you own and the value of your personal property.

What determines if I am eligible to file for Chapter 13 Bankruptcy?

The court may require you to file for Chapter 13 Bankruptcy if your income is greater than the median income for a family of your size in your area. Additionally, you may want to file Chapter 13 Bankruptcy if you are behind on house payments or car payments and have the ability to repay the past due amounts.

I borrowed money from a family member; can I repay him or her before I file my bankruptcy?

Generally, you cannot pick and choose which creditors are included in the bankruptcy and which creditors you pay. If you have paid a substantial amount of money to a family member in the year prior to the filing of your case, that payment would be considered a preferential payment and the court may require your family member to pay the money to your creditors.

If I file bankruptcy, can I keep my house?

You are able to keep your house if you meet certain qualifications, including the ability to stay current and continue to make the regular monthly payments as they come due. If you are behind on your mortgage, a Chapter 13 may prevent foreclosure and allow you to save your home.

If I file bankruptcy, can I keep my vehicle?

You are able to keep your car or motorcycle if you meet certain qualifications, including the ability to stay current and continue to make the regular monthly payments as they come due. If you are behind on your vehicle payment, a Chapter 13 may prevent the repossession.

How much does it cost to file Bankruptcy?

Generally, attorney fees for bankruptcy are as little as $1,000.00 to as much as $3,500.00. Costs for bankruptcy vary depending on the complexity of the matter and the number of creditors a client has. the Frankfort Law Group offers a free consultation to further discuss your case and the costs.