Frequently Asked Questions

Please note the following before reading this Q & A section:

• The material on this website is provided for reference purposes only.

• Nothing here should constitute legal advice, nor does any information written here form an attorney-client relationship. Put simply, this means we are not your attorney until we have a firm agreement in place to represent you. Our office does this through a signed writing.

• Laws and circumstances change often, so some of the information on this site may no longer be valid.

• Call us at 904-877-1010 and schedule a free consultation before acting on any information here. We will provide you with the answers you need before filing bankruptcy.

Frequently Asked Questions

What assets are usually not protected when I file bankruptcy?

If you qualify to use exemptions for your bankruptcy, you might be able to use an exemption for any unprotected assets.  Examples of unprotected assets are: cash, stocks that are not part of a qualified 401k or IRA account, money in bank accounts, boats or recreational vehicles, art, furs, jewelry, annuities, and cash value insurance policies.

Can you explain how to file for bankruptcy?

In order to file for bankruptcy, credit counseling must be obtained and a petition filed (among other necessary paperwork depending on your specific situation).  Since the bankruptcy process is complicated and each case is unique, it is best to seek out the advice of a qualified bankruptcy attorney.  

What will happen to our car if we file for bankruptcy?

If the car is not paid off, as long as you continue making payments and they are current, you can normally keep the car.  If you file for chapter 13 bankruptcy, the same rules apply, and you may be given a reasonable payment plan you can afford to catch up on any late payments.

What is the 90 day rule, and what should I not do during the 3 months prior to filing bankruptcy?

If you plan to file bankruptcy, please be aware that you must NOT use your credit cards for at least 90 days before the date your petition is filed.  If you do, the Bankruptcy Trustee and the Court may look upon any charges made during that 90 days as fraudulent and will likely not discharge (wipe out) those debts in your bankruptcy. 

How quickly can my bankruptcy be filed?

People often call us at the last minute. Many times, we meet someone and prepare all of the legal papers needed to save their home from foreclosure, to stop a levy on their bank account, or to stop a creditor from taking their wages, that very same day. However, it is always better to consult with us ahead of time.   

What is Chapter 7 Bankruptcy?  Is it true that most people can still file a Chapter 7 bankruptcy, even after the laws changed?

 I'm often asked “I hear that you can’t discharge credit cards anymore?” or hear “that it’s harder to file bankruptcy."  First, you can still discharge credit cards. What the 2005 law did was to make it slightly harder to discharge recent charges that aren’t for household expenses. In other words, if you charge over $500 in the 90 days preceding your filing bankruptcy, the credit card company can object to your discharge. Otherwise, you can still obtain a discharge from your credit cards through bankruptcy. The second statement (mentioned above) CAN be true, depending on your circumstances. Nowadays, you MUST provide the trustee with your 6 preceding months of paystubs (or other proof of income) from all sources of income. Additionally, you must provide tax returns (tax return transcripts are acceptable, and serve as better proof that the taxes were actually filed). The income information is calculated into your means test, which determines what Chapter you may file (although if eligible for Chapter 7 there may be circumstances in which you choose to file a Chapter 13 regardless, which I'm happy to discuss). The means test is the most difficult part about filing bankruptcy under the 2005 law. In reality, however, we find most people that want to file a chapter 7, still can. Most of our chapter 13 clients at this time are filing chapter 13 because they risk losing their house, not because of income. Some don’t qualify for a chapter 7 for other reasons (for example, filing bankruptcy in the last 8 years, or having too much equity to file a chapter 7 and still keep the property they own). If you make below the median income for your state and household size, you will qualify for a chapter 7. If you make above the median for your household size in your state, then your attorney must look at other factors in order to determine whether there would be a presumption of abuse if you were to file a chapter 7. These factors include mandatory payroll deductions, secured debt payments (like mortgage payments and car notes), and other relevant expenses. The means test is based on a complex budget, deemed reasonable, based on IRS allowances. Your real budget could be in the red, but the Means test might still think you should be able to afford a chapter 13 plan. It can also be the other way around. The means test might say that you should be in the red, but your real budget is so frugal that that isn’t the case for you (you would still qualify for a chapter 7 in that situation though). Provided that you qualify to file a chapter 7 with no presumption of abuse, you will find that it isn’t much harder to file a bankruptcy now, compared to any point in the past. The only thing that requires more effort is completing the mandatory credit counseling prior to filing, and a debtor education class after filing, but before discharge, in order to obtain a discharge. If those requirements are not met, you cannot get a bankruptcy discharge.