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Roswell Bankruptcy Attorney FAQ
1. What is bankruptcy?
A: Bankruptcy is a legal proceeding in federal bankruptcy court by which a person who has more debts than he or she can pay seeks relief from those debts. The right to file a bankruptcy exists under the law, and was designed to take care of problems with debts and to allow a fresh financial start.
The person who files for bankruptcy is legally referred to as a debtor. The persons who the debtor owes are referred to as creditors.
2. Who can file for bankruptcy?
A: In general, any person or business can file for bankruptcy. There is no minimum amount of debt required; however, in most cases, a person who files does owe considerably more in debts than he or she can pay.
3. What debt will not be erased by bankruptcy?
A: After filing for bankruptcy, certain debts still have to be paid, including:
- Child support, alimony, and fines
- Some taxes
- Debts not listed on the bankruptcy petition
- Student loans
- Mortgages and certain other liens
4. What property will I be able to keep if I file for bankruptcy?
A: Certain property is exempt from bankruptcy proceedings. The debtor must choose between federal and state exemptions. A gerneral outline of the exemptions available under state or federal law include the following:
Item |
State |
Federal |
Car |
$4,000 |
$3,225 |
Homestead - Married or Head of Household |
$60,000 (each) |
$20,200 |
Household Goods |
Unlimited |
$10,775 ($525 each item) |
Clothing |
Unlimited |
$10,775 ($525 each item) |
Appliances |
Unlimited |
$10,775 ($525 each item) |
Jewelry |
$2,500 |
$1,350 |
Tools of Trade |
$1,500 |
$2,025 |
Pension/Retirement Fund |
Unlimited |
Limited to Need |
Medical/Health Fund |
Unlimited |
Unlimited |
Life Insurance |
Unlimited |
$10,775 |
Social Security, Welfare, Unemployment Compensation, Disability, Alimony |
Unlimited |
Unlimited |
Personal Injury |
No Exemption |
$20,200 |
Personal Property - Married |
$500 |
No Exemption |
Personal Property - Single |
$500 (No Cash) |
No Exemption |
Other Property - If no Homestead |
$2,000 |
$11,200 |
*Note: If a husband and wife file together, the above amounts are doubled.
5. Does my spouse have to file with me?
A: No. Although one advantage of filing together is the doubling of the amount of the exemptions, there is no requirement that a husband and wife file bankruptcy together.
If only one spouse owes most of the debt, it may be appropriate for that spouse to file alone. However, jointly owned property may be affected if only one spouse files.
In many cases, a husband and wife have the same debts or have cosigned the same loan agreements. If only one spouse files in this situation, creditors can continue to demand payment from the spouse who did not file.
6. How will bankruptcy affect my credit?
A: Under federal law, bankruptcy may appear on a person’s credit record for up to fourteen (14) years. However, most credit reporting agencies only report a bankruptcy for up to ten (10) years.
A bankruptcy may make it harder to obtain credit for a period of time. However, a person contemplating bankruptcy may already have a poor credit rating. Bankruptcy may actually improve a person’s ability to obtain credit because many of the debtor’s former debts will be discharged.
The policy of lenders and creditors in your area may vary with regard to the effect of bankruptcy on a person’s ability to obtain credit.
7. Will I be able to own anything after bankruptcy?
A: As a general rule, there is no limitation on the future ability of a debtor to own or acquire property. In most cases, creditors whose claims are discharged in bankruptcy will not be able to take property or earnings acquired after the filing of bankruptcy. However, some special types of interests, such as inheritances, property settlements, and life insurance proceeds, if acquired within six months after bankruptcy, may become available for payment to creditors.
8. Can I file for bankruptcy more than once?
A: Yes, but there are limits on how often you can file for bankruptcy. If you have previously received a discharge under Chapter 7, you must wait eight years before being able to file again under Chapter 7. Before filing under Chapter 13, it must have been four years since receiving a bankruptcy discharge under Chapter 7, 11, or 12. If you have previously filed under Chapter 13, you must wait two years before being able to file again under Chapter 13.
9. What is chapter 7 bankruptcy?
A: In a chapter 7 bankruptcy, a trustee takes the nonexempt assets of the debtor (the person filing for bankruptcy), reduces them to cash in a liquidation sale, and distributes the cash to creditors.
However, many chapter 7 cases are referred to as “no asset” cases because nothing is owned by the debtor which is not exempt or secured by a loan.
After filing under chapter 7, individual debtors often receive what is called a “discharge” from certain debts. This means that the debtor is no longer personally liable for the payment of the discharged debt, and creditors can no longer demand payment of the discharged debt.
10. What is chapter 13 bankruptcy?
A: A chapter 13 bankruptcy allows individual debtors (a person filing for bankruptcy) to pay off debts over a period of three to five years under an installment payment plan.
This type of bankruptcy is a good option for people with a steady income that can cover reasonable expenses and, over time, the debt. By filing under chapter 13, a debtor may be able to extend the time to pay off debts and reduce the amount to be paid.
