Frequently Asked Questions |
Before You File: |
| If I am considering Bankruptcy, what should I do? |
| Contact CCCS. Consumers who intend to file for bankruptcy relief must receive a comprehensive counseling session before filing. This session is aimed to help consumers understand their option and the pros and cons of each. It consists of a thorough review on one's income, assets, expenses and liabilities. Upon completion of the counseling, a certificate is issued to the consumer and is valid for 180 days (6 months). This certificate must be taken to his/her attorney within 6 months in order to file for bankruptcy relief. |
| Why do I have to be counseled before filing bankruptcy? |
| The laws changed for bankruptcy in October 2005. Consumers who intend to file for bankruptcy must receive counseling before filing. The session aims to help consumers understand their option and pros and cons of each. |
| How long will it take to complete the course? |
| The course itself should only take about 90 minutes. |
| What is chapter 7 Bankruptcy? |
| Chapter 7 Bankruptcy involves the liquidation of non-exempt assets to pay all, or a portion of, the overall debt, with the exception of certain debts that are not eligible for discharge. The debtor is no longer required by law to pay any debts that are discharged. Although a debtor is relieved of personal liability for all debts that are discharged, a valid lien (i.e., a charge upon specific property to secure payment of a debt) that has not been avoided (i.e., made unenforceable) in the bankruptcy case will remain after the bankruptcy case. |
| What is chapter 13 Bankruptcy |
| Chapter 13 Bankruptcy is a full or partial repayment plan administered by the bankruptcy court. The repayment period may be from 3-5 years and the monthly payments are made to the bankruptcy trustee. At the end of the repayment period, any remaining debt may be discharged. The most important thing about a chapter 13 case is that it will allow you to keep valuable property, like your home or car, even if you are behind on payments or you have equity not covered by your exemptions. |
| Why do people file chapter 7 bankruptcy? |
| Generally people file chapter 7 bankruptcy if they have a large amount of unsecured debt such as credit card debt or medical expenses that they are no longer able to pay. Often unemployment, unexpected medical expenses, or divorce prompt the cause the debtor to seek protection from creditors by filing chapter 7 bankruptcy. |
| Why do people file chapter 13 bankruptcy? |
| Generally, people file chapter 13 if they have valuable property not covered by an exemption, like a home or car, but want to keep this property. If a debtor is behind on secured loan payments a chapter 13 bankruptcy can allow the debtor to make up these payments over time while keeping the home or car. |
| Can a married debtor file without the other spouse? |
| Yes, but your spouse will still be liable for any joint debts. If you file together you will be able to double your exemptions. If the spouses have joint debts, the fact that one spouse discharged the debt may show on the other spouses credit report. For information you need to speak with your bankruptcy attorney. |
| Can filing bankruptcy stop bill collectors from calling? |
| Yes. The automatic stay prevents bill collectors from taking any action to collect debts. |
| How long after filing bankruptcy will the creditors stop calling? |
| Once a creditor or bill collector becomes aware of a filing for bankruptcy protection, it must immediately stop all collection efforts. After you file the bankruptcy petition, the court mails a notice to all the creditors listed in your bankruptcy schedules. This usually takes a couple of weeks. Creditors will also stop calling if you inform them that you filed the bankruptcy petition, and supply them with your case number. |
| Can I erase my student loans by filing bankruptcy? |
| Generally, student loans are not discharged in bankruptcy. For more information speak with your bankruptcy attorney. |
| How will I get my certificate? |
| You will receive your certificate upon completion of the pre-filing course and summary review with a certified credit counselor. |