Frequently Asked Questions

That depends. If you file chapter 7 and you have any “big ticket assets” (such as a house that is paid in full, or a car with no lien), the chapter 7 trustee can take that asset, sell it, and use the money from the same to pay your creditors. In addition, if you file chapter 7 and you are behind on a secured debt (such as mortgage or car note), your lienholder may demand that you get completely caught up on your payments or demand turnover of the collateral. If you file for chapter 13 bankruptcy, you can protect all of your assets and keep all your stuff, but have to promise to pay back to your unsecured creditors the amount they would receive if you filed chapter 7.

No. Do not make any extraordinary transfers of money or property in anticipation of filing bankruptcy. If you do, the chapter 7 trustee can sue the recipient of the property and “undo” the transaction. For example, lets say you have a house worth $100,000.00 that is paid off. If you deed the house to your mother, and then you file bankruptcy, the trustee can sue your mother, rescind this transfer, then take your house and sell it. Also, keep in mind that transfers of property for vehicles and real property are a matter of public record.

Not exactly. Under certain circumstances, the court will not allow you to file chapter 7 (the “wipeout”) if your income exceeds a certain threshold. That threshold is generally based on your last six months of income compared to other households in your state. If your income does exceed that threshold, you may be required to file a chapter 13 bankruptcy, which is a payback of some or all of your debts over the course of up to five years.

No. Once your bankruptcy is filed, you get the protection of the automatic stay. Think of it like a big bubble that goes around you and all your stuff. Creditors are not allowed to contact you and must stop any collection activities (i.e. garnishments, repossessions, evictions, foreclosures).

Yes. You have to make one court appearance, approximately 30 to 45 days after your case is filed. Under certain circumstances, you can appear telephonically.

A chapter 7 bankruptcy is on your credit report for up to 10 years, and a chapter 13 bankruptcy is on your credit report for up to seven years. If you file bankruptcy, negative items will eventually come off your credit report. Your credit report will show the filing in the “public records” section of the report. Once your case has been discharged, the report will show a zero balance under the debts which were included in your filing.

Yes. Once you file a chapter 7, you can incur debt (such as credit cards and car loans) the day after it is filed. Once you file a chapter 7, you generally have to wait two years from your discharge to get a mortgage (per FHA guidelines). If you file for chapter 13 bankruptcy, you can incur debt, but you must first get permission from the court.

Start with the small things – pay your rent, utilities, and phone bill on time. Apply for a credit card with a local retailer, such as a department store. Apply for a small loan at your local credit union and timely pay it off. Get a credit card secured by your savings account with your credit union.

I provide a complimentary consultation (either in person, via phone, zoom, google, or FaceTime). At our first meeting, I review your credit reports, income, expenses, and assets to figure out if bankruptcy is the right solution. This initial meeting generally lasts 30 to 60 minutes. We will then have a second meeting (which also lasts 30 to 60 minutes). At this second meeting, we will review all of the bankruptcy paperwork I have prepared, and give you the chance to make any additions or corrections you see fit.

No. While our doors are open for in-person meetings, here at Groswald Law, we use cutting edge technology so you can file bankruptcy from the comfort of your home. Groswald Law provides consultations via phone, Zoom, or any other electronic medium. In addition, we use DocuSign so you can electronically sign off on all legal documents. Also, the Groswald Law website provides a portal to securely transfer files while protecting your personal information.

No. As a result of the COVID-19 pandemic, all court dates are being conducted telephonically.

No. The stimulus checks and additional CARES-related income (including additional unemployment) is not counted towards your income. No, the court will not take away this additional income, you can keep it to take care of yourself and your family.

As a result of the COVID-19 crisis, the federal government, and some state and local governments, have imposed moratoriums on foreclosure and eviction proceedings. You may qualify for a loan modification or other deferment options (important tip: just remember that you must pay deferred payments later). Call today to find out more information.

Sometimes, yes this is true. However, whenever you settle a debt for less than the full amount, there can be serious tax consequences. For example, let’s say you owe a creditor $2,500.00, and the creditor agrees to accept $1,500.00, and forgive the remaining $1,000.00. The Internal Revenue Service may require that you pay taxes on the $1,000.00 that was written off. However, if you were to file bankruptcy on this debt, then you will have no tax liability.

Yes, you could do that, but why would you? If you file bankruptcy, your ERISA-qualified retirement accounts (e.g. 401(k), pension, IRA) are exempt (i.e. protected) from being liquidated by your creditors. Many make the mistake of exhausting their retirement accounts to pay their creditors and avoid bankruptcy. If you file bankruptcy, you can avoid cashing out your retirement funds.

You should seriously consider filing for chapter 13 bankruptcy protection. When you file chapter 13 bankruptcy, the bankruptcy court hits the “pause” button, and gives you up to five years to pay back your car loan and mortgage arrears.

That depends on several factors. First, if you have Earned Income Credit (“EIC”) and/or Additional Child Tax Credit (“ACTC”), your tax refunds are shielded to the extent of these credits. In addition, depending on whether you file for chapter 7 or chapter 13 bankruptcy protection, there are other protections and/or exemptions you may have to shield your tax refund obligation to the bankruptcy trustee. Call Groswald Law today for a detailed tax refund analysis.

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