Frequently Asked Questions

  
Robert E. Moorehead, Attorneys at Law, PLLC, is a federally designated debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
  
  1. WHAT IS THE PURPOSE OF BANKRUPTCY?
    The dual purpose of bankruptcy is to give the honest but unfortunate debtor a fresh start and to ensure fairness to his or her creditors. When a debtor files for bankruptcy protection and relief, immediately by operation of law, the Automatic Stay stops most creditors from collection activities against the debtor or his or her property. The Automatic Stay is why filing for bankruptcy protection will stop foreclosures, repossessions and garnishments in addition to harassing collection phone calls. Exceptions to the automatic stay include but are not limited to criminal prosecution, certain domestic support and family law matters, and tax audits.
  2. WHAT DISCLOSURE OF INFORMATION IS REQUIRED?
    A debtor who files for bankruptcy protection and relief is required to disclose all assets, all debts, income and expense information, and certain financial transactions to the Court in his or her petition. Failure to do so is a crime and can also result in denial of a discharge.
  3. WHAT ARE EXEMPTIONS?
    After listing all assets, a debtor in bankruptcy is allowed to claim exemption of certain assets. Exemptions are protections provided by state and federal law for certain necessary possessions, such as your home, car, and household goods. Our attorney can tell you which assets are exempt and which are not when you come in for your free consultation.
  4. WHAT IS A MEETING OF CREDITORS?
    After fling a bankruptcy, a debtor is required to attend a Meeting of Creditors where he or she will testify under oath. The Debtor’s creditors are invited but not required to attend the meeting, and most creditors do not attend. A court appointed Trustee will ask the Debtor questions, and any creditor who does attend the meeting may also ask the debtor questions.
  5. WHAT IS A CHAPTER 7 BANKRUPTCY?
    In a Chapter 7 Liquidation, a debtor can discharge dischargeable debts in exchange for a liquidation of non-exempt assets. Most unsecured debt, such as credit card debt and medical debt, is generally dischargeable. Some unsecured debts, such as child support, alimony, most taxes, and student loans, are generally not dischargeable. The average Chapter 7 in our district lasts 4.2 months. For secured debt, such as a mortgage or car note, if a debtor is current and can afford to continue to make the payments as contracted, the debtor can sign a reaffirmation agreement and keep the property held as collateral for the note by continuing to pay it as contracted. If the debt is reaffirmed, it will not be discharged. If the debtor is willing to surrender the collateral that secures the note, the debtor can generally discharge that secured debt. When a debtor files Chapter 7 Bankruptcy, a Trustee is appointed by the Bankruptcy Court. The Trustee’s main function is to find a way to pay the debtor’s unsecured creditors. To accomplish this goal, the Trustee will review the petition the debtor has filed with the Court and ask the debtor questions under oath at a meeting of creditors. If the Trustee discovers any non-exempt assets, fraudulent transfers, or preferences, he can not only liquidate or sell the non-exempt assets, but he can also set aside fraudulent transfers and preferences to obtain money to pay to your creditors. Chapter 7 is means-tested, which means that whether a debtor qualifies to file a Chapter 7 depends on the income and expenses of his or her household. If a debtor does not qualify to file a Chapter 7, he or she may wish to consider filing under Chapter 13.
Have further questions?
Send us a message with your information, and we will get back to you as soon as possible!
Name
Message
Email
Subject
Submit
  1. WHAT IS CHAPTER 13 BANKRUPTCY?
    In a Chapter 13 Reorganization, the debtor restructures his or her debt in a three to five year court supervised payment plan. A Chapter 13 allows a debtor to keep his or her assets. A Chapter 13 will allow a Debtor to catch up on payments that are behind over the term of the plan. Priority debt, such as child support and most taxes, is required to be paid through the Chapter 13 Plan over the term of the plan. Secured debt can be paid through the plan or the collateral can be surrendered with any remaining balance being treated as unsecured. Unsecured claims are paid anywhere from zero to one hundred cents on the dollar depending on the Debtor’s disposable income. Chapter 13 has debt limits. If a debtor owes more than the allowed debt limits, he or she would not qualify for Chapter 13, but may consider a Chapter 11 for reorganization. Chapter 13 also requires that the Debtor have income sufficient to regularly make the anticipated plan payments for the term of the plan. Chapter 13 is not available for corporations or partnerships; only an individual person or a married couple can file Chapter 13.
  2. WHAT IS CREDIT COUNSELING?
    Before a debtor files a bankruptcy petition, he or she must complete a credit counseling course through a provider approved by the U.S. Trustee’s Office. The credit counseling course can be completed online or by telephone, and the certificate provided at the end of the course must be filed with the Court along with the debtor’s bankruptcy petition. Both the Credit Counseling and Debtor Education courses are offered by third party providers and generally cost between $10 and $25.
  3. WHAT IS DEBTOR EDUCATION?
    After the petition is filed, but before the completion of the case, a Financial Management/Debtor Education course approved by the U.S. Trustee’s Office must also be completed by the debtor. A certification along with the certificate showing the course has been completed must be filed with the Court before the debtor can receive his or her discharge. Both the Credit Counseling and Debtor Education courses are offered by third party providers and generally cost between $10 and $25.
  4. WHAT ARE THE FEES AND COSTS TO FILE BANKRUPTCY?
    The Bankruptcy Court’s filing and administrative fee for filing a Chapter 7 is $335. The Bankruptcy Court’s filing and administrative fee for filing a Chapter 13 is $310. These court fees are not part of the attorney fees. Attorney fees depend on which chapter of bankruptcy a debtor files and the nature of his or her case. Each case is different. At your free consultation, Mrs. Spell will evaluate your situation to determine whether bankruptcy is a good option for you, and if so, which Chapter would give you the most benefit. At that time, she can also tell you how much the attorney fee would be for the appropriate Chapter depending on the details of your case. Chapter 7 attorney fees must be paid in full prior to the filing of the case. However, we do offer affordable payment plans. Chapter 13 attorney fees are paid mostly, if not all, through the Chapter 13 Plan. In addition to the court and attorney fees, the debtor will have the cost of credit counseling and debtor education courses (generally between $10 and $15 each).