Law Office of Jeffrey Totten - Frequently Asked Questions about Bankruptcy Law

I heard the bankruptcy laws have changed. Can I still file?
Who should file bankruptcy?
How much does it cost to file bankruptcy?
What is the bankruptcy process like?
What is the difference between a chapter 7 and a chapter 13 bankruptcy?
How are co-signors affected by a bankruptcy?
Can bankruptcy stop a home foreclosure sale?

I heard the bankruptcy laws have changed. Can I still file?

Yes. The bankruptcy laws changed on October 17, 2005. Now, if you have a relatively high
income you may be limited to filing a "Chapter 13" bankruptcy. This will require the creation of
a repayment plan for the period of 5 years.

The majority of people who file bankruptcy can still file a "Chapter 7" bankruptcy - which
usually discharges most of your debts.

Who should file bankruptcy?

Filing for bankruptcy may be a valid option if you are in one or more of the following
circumstances:

- Most of your debts are unsecured (for example: credit cards or
hospital/doctor's bills)
- Collection agencies are calling you often
- You have little or no savings and few assets
- You have pending lawsuits against you

How much does it cost to file bankruptcy?

There are four costs involved in filing a Chapter 7 bankruptcy:

Court costs - $ 299 for a chapter 7;
$274 for a chapter 13.
Credit class - $35 - 50 depending on the company you choose. (this class must be completed before
you are allowed to file with the court)
Debtor education class - approximately $50 (this class is taken after you file but before you receive a
discharge)
Attorney fees -attorney fees for a basic chapter 7 are usually between $700 to $1,000 depending
on the complexity of the case.

Note: While filing bankruptcy is not cheap, it is possible to spread the costs out over time.

What is the bankruptcy process like?

First, it is wise to meet with an attorney to discuss bankruptcy in general and your options in
particular.

If you decide that bankruptcy might help your situation, you will receive a bankruptcy
questionnaire to fill out. Fill this out and return it to the law office.

Under the new bankruptcy laws it is now necessary to speak to a credit counseling agency
before filing for bankruptcy. This can be done over the phone or online. It will usually take
about half an hour. When you have completed credit counseling a certificate of completion will
be sent to you or the Law Office of Jeffrey Totten.

The bankruptcy petition will then be prepared and filed with the bankruptcy court.

At this time, an "automatic stay" goes into effect. This prevents your creditors from contacting
you about the debts you owe them.

Within 40 days after filing the bankruptcy petition you will be required to attend a "341(a)"
hearing. This is a short, but formal, meeting with a trustee. The trustee will ask you (under
oath) about your finances and your creditors will have a chance to ask you questions as well,
although creditors rarely attend these meetings.

Before you can receive a discharge, you must complete a Debtor Education class. This can be
done over the phone or online.

Finally, approximately 90 days after the 341(a) hearing, you will receive a discharge in
bankruptcy.