Bankruptcy FAQs

That depends on your circumstances. If you have fallen behind on your mortgage payments or your car payments and you cannot get caught up with the payments, or if a foreclosure or a repossession is pending, then a bankruptcy filing is the only thing that can stop the creditor. A Chapter 13 reorganization may allow you to restructure your debt so that you can keep your home and your car.

If you are being sued or if credit card payments and medical bills have you so deep in debt that you cannot foresee a debt-free future, then a Chapter 7 may be your solution. Remember that if you are only making minimum payments on your bills it may take 20 years to pay off your debt.

At Hickson Law, PC, Elizabeth Hickson firmly believes in setting out all your options and in giving you an honest opinion of what actions to take that serve your best interest. Her goal is to put you in the best financial condition now and in the future.

A bankruptcy filing is a legal petition and it is a matter of public record, however, unless you are a high-profile individual, newspapers will not report it, and it is usually only your creditors that will find out you have filed a bankruptcy case. Your creditors will receive a notice of your filing. In a Chapter 13 reorganization the employer will receive a pay order.

Unfortunate and unexpected events can and often do happen to good people. A family catastrophe, a loss or a reduction of income, illness and any number of other unforeseen circumstances can turn anyone's financial world upside down. We understand that to most of our clients a bankruptcy is a last resort and it is a difficult choice to make, but everyone is entitled to a fresh start.

Credit card companies and other creditors are not concerned with your difficulties. They do not hesitate to raise the interest rates or minimum payments regardless of your circumstances. They have resisted and continue to resist debtors' rights legislation. They prefer that you not know how long it will take to pay your debt. Ultimately your decision should be based on what is best for you and your family.

Creditors usually cannot pursue a non-filing spouse unless the non-filing spouse signed or is otherwise liable on the debt. When most of the debt is in the filing spouse's name, we usually recommend a single filing to preserve the other spouse's credit. Although the non-filing spouse's income is considered in determining eligibility, the non-filing spouse will have no involvement in the case. There are a few instances, however, where a joint filing may be desirable to maximize the exemptions.

Immediately upon filing. The filing of the case invokes something called the automatic stay. It is an injunction that requires all creditors to cease collection efforts. The bankruptcy clerk's office will notify the creditors of the bankruptcy filing by mail, but it will take about a week or two for the notices to be sent out. Upon filing, our clients are advised to answer their phones so that they can inform the creditors of the bankruptcy filing and to refer their calls to us. Creditors will usually stop any further collections, and you may then start answering your phone without worrying about anymore harassing phone calls.

Not usually. There is a short meeting called a 341 meeting of creditors that you and your creditors will receive a notice about. You must attend, and we will accompany you, but it is rare for creditors to attend. If they show up they have a very limited time to ask questions and the questions are limited. Rest assured that it is unusual for creditors to attend. The meeting usually lasts about 10 to 15 minutes and it is simply an opportunity for the trustee to ask questions related to the paperwork. You will not see a judge unless an issue would arise that would require some sort of hearing or litigation; again, it is rare for a debtor to have to appear before a judge or to have to face his or her creditors.

No. There is a pre-filing credit counseling course and a pre-discharge debtor education course that you must complete. The courses can be completed online or over the telephone, and it will take about 90 minutes to complete the first one. Once the case is filed and you are assigned a case number you can complete the education course and it takes about two hours. The online courses are easy and painless, and they are available 24/7.

You may be thinking about the means test. The means test is what your attorney will complete for you, and it is a calculation of your income and expenses. It is used to determine what chapter of the Bankruptcy Code you qualify for. If a reorganization is required it may determine how much you must repay your unsecured creditors.

As your attorney, she will guide you through the process and it is her goal to make it as uneventful a process for you as possible.