Questions & Answers »

The following are answers to some of the most common questions we’ve been asked about bankruptcy.
To get more thorough answers to all of your questions, call Kluzak Law.

Q. What is the difference between a Chapter 7 and Chapter 13 bankruptcy


A. Chapter 7 is liquidation. Any property that is not protected by law will be turned over to the United States Trustee and used to pay off your debts. Chapter 13 is reorganization. You pay the United States Trustee monthly for a period of three to five years. The amount of the monthly payment is based on your budget and what you can afford.


Q. Are my possessions going to be taken by the United States Trustee?


A. In most cases, all of your belonging and possessions are protected by law and you get to keep everything you have. If you have any property that is not protected, we will discuss that with you so you know your options and the likely outcomes of your case.


Q. If I am married, does my spouse have to file too?


A. No. If you are living with your spouse you will have to disclose his or her income, but you don’t have to include their name and information. If you are not living with your spouse, you will not have to disclose your spouse’s income or information.


Q. Will filing bankruptcy stop a wage garnishment

or sheriff sale?


A. Yes. Filing bankruptcy activates the “automatic stay,” a protection that stops all collection activities until the bankruptcy resolves the matter, or the court grants permission for the creditor to continue.

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Q. How does filing for bankruptcy affect my credit?


A. The Fair Credit Reporting Act allows a bankruptcy filing to stay on your credit report for ten years. After that time it is the credit bureau’s duty to remove it. Even though a bankruptcy filing will stay on your credit report for 7-10 years, it won’t necessarily affect your credit that entire time. Most people begin to rebuild their credit within 1-2 years.


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