Bankruptcy FAQ

Below are some frequently asks questions about bankruptcy. These questions and answers are meant to provide general knowledge about bankurptcy and are not a substitute for legal representation. Please click on this link: contact us if you need more information or to schedule an appointment.

Click these links for more information about the two types of consumer bankruptcy:

Chapter 7 and Chapter 13

Q: Can home foreclosure be prevented?

A: If a person gets behind on mortgage payments, the creditor may call the loan “in default,” accelerate the debt and begin foreclosure proceedings. When a debt is accelerated, the full balance is due immediately. Most creditors will refuse monthly payments at this point. If the creditor begins foreclosure, you will receive a notice of foreclosure. A chapter 13 bankruptcy can be filed at any time before the “sale date” of a foreclosed property and stop the foreclosure.

Q: How much of my property can I keep?

A: You are allowed to keep certain assets. In the State of Tennessee, an individual is allowed to exempt $5,000 worth of real estate used as a homestead (residence) and $4,000 worth of personal property. A married couple is allowed to exempt $7,500 in real estate used as a homestead and $8,000 in personal property. A person having custody of a minor is allowed $25,000 in real estate used as a homestead. If you have property above the exemption limits, you may lose some of it.

Q: Will Bankruptcy stop Lawsuits and Judgments?

A: The filing of a bankruptcy stops any lawsuits from being filed against you or judgments taken against you. Any garnishment stemming from a judgment against you can also be stopped. The party who filed the lawsuit against you can request the case continue, but they need permission from the bankruptcy court to proceed.

Q: Can I keep my credit cards?

A: Whether you keep credit cards after filing bankruptcy is up to the credit card company. If you are discharging a credit card, they will cancel the card, unless you reaffirm the debt. Even if you have a zero balance, the credit card company may cancel the card. Credit cards should not be used for 90 days prior to filing a bankruptcy.

Q: Will I ever get credit again?

A: Usually. A number of banks now offer “secured” credit cards. There are also mortgage companies who will give mortgage loans soon after a bankruptcy discharge.

Q: Will my spouse be affected?

A: Your spouse will not be affected by your bankruptcy if they are not responsible (did not sign an agreement or contract) for any of your debt. If your spouse brings income into the household, his or her income and expenses are included as household income and expenses.

Q: What about student loans?

A: You will continue to owe student loans after you file bankruptcy. There are some special circustances in which students loans may be discharged.

LOUIS W. RINGGER

ATTORNEY AT LAW