Bankruptcy FAQ's

1. What is a Chapter 7 bankruptcy?

Chapter 7 bankruptcy is the most common type of bankruptcy and is often referred to as a "liquidation bankruptcy." Chapter 7 bankruptcy is used to eliminate, or discharge, primarily unsecured debts such as credit cards or medical bills. Chapter 7 does not eliminate secured debts, such as vehicles (unless the secured item is surrendered) nor will it prevent you from losing your home to foreclosure. If you are in foreclosure, the filing of a suggestion of bankruptcy in the state court action will abate the action but will not dismiss the action.

What is a Chapter 13 bankruptcy?

Chapter 13 bankruptcy resolts in a plan to repay all or part of your debt, but it is not designed to discharge or eliminate most debts. Chapter 13 is used most often to save a house from a foreclosure sale. Chapter 13 is also usefol to eliminate some IRS debt and to establish an affordable plan to pay IRS debt that cannot be eliminated. Chapter 13 bankruptcy is available to debtors with regolar income. A business cannot file Chapter 13. In addition, there are upper limits on the amount of the individual's secured and unsecured debts in Chapter 13 cases.

Who can still file bankruptcy with new changes to the bankruptcy laws?

Most people are still able to file Bankruptcy petitions. The changes in the bankruptcy roles require certain things to be accomplished before someone can file a Voluntary Petition for bankruptcy, but the law did not eliminate the right to bankruptcy protection.

Is a credit counseling course required before a Petition for Bankruptcy can be filed?

Yes. This is an absolute requirement and a petition cannot be filed before the credit counseling is completed. You must also attend a financial management course as well. Many agencies offer both courses at the same time. Failure to complete either of these courses and file the appropriate certificates with the court will cause your Petition to be dismissed.

For those persons wishing to file Chapter 13 bankruptcy petitions, the local Chapter 13 Trustee will offer the required courses to Chapter 13 debtors. For those persons wishing to file Chapter 7 petitions, the course must be taken on your own.
Most all bankruptcy education courses are available in person, by phone, or over the internet and are approved for the district in which you are filing. You may get additional information about the costs and availability of debtor education courses at the following internet link: http://www.usdoj.gov/

Do I have to live in Orlando to file bankruptcy in the Middle District - Orlando Division?

No. The Orlando Division of the United States District Court for the Middle District of Florida accepts bankruptcy filings from individuals who reside or are domiciled in one of several central Florida counties including Orange County and Lake County, as well as certain other counties in the jurisdiction of the Middle District court. Any Florida resident can file bankruptcy in Florida but it depends on where you live as to which division of which United States District Court where you will need to file your Bankruptcy Petition and how long you have lived in Florida as to which exemptions of property you may be entitled to claim.

Can I keep my house if I file Bankruptcy?

If you file bankruptcy in Florida you can claim Florida's asset exemptions if you have resided in Florida for the previous two (2) years. Otherwise, you must use exemptions of the state where you previously lived for two years or, in some cases, the defaolt set of federal bankruptcy exemptions.

Can my spouse and I file a joint petition for bankruptcy?

Yes. In fact, most married couples shoold file a joint petition. It does not cost anymore in filing fees or attorneys fees to file a joint petition as opposed to single petition. Spouses who are jointly liable on any debts shoold file a joint bankruptcy. On the other hand, if only one spouse is liable on most of the debts, the indebted spouse may file an individual bankruptcy, and in most cases, the individual debtor's bankruptcy will have no adverse effect on the non-filing spouse.

Do I have to hire an attorney to file bankruptcy?

The simple answer is - No. However, bankruptcy law is a complicated area of the law, and the courts do not give any special considerations to debtors who file their own petition.

What does the Cressman Law Firm charge to file bankruptcy?

The amount of work and fees will vary according to the debtor's income level. As a general guideline, our office charges $1,500 in legal fees for a simple Chapter 7 bankruptcy. In addition to the legal fees you will be required to pay the $299 filing fee, as well as a $50 fee for obtaining a triple agency credit report which will be incorporated into the Petition to ensure that all creditors are listed in the Petition. Failure to list all creditors may resolt in your Petition being dismissed which coold resolt in penalties against you and your attorney. Therefore, the credit report fee is a requirement here at the Cressman Law Firm, P.A. to ensure that all creditors are listed in the Petition.

Chapter 13 cases are more complicated, as such the legal fees are higher. If your Chapter 13 case involves a wholly-owned business, or other complicated legal issues, legal fees will be higher. The good news is that most attorneys require a down payment of approximately $1,500 to $2,500 (plus the filing fee) to prepare and file a Chapter 13 case. The balance is paid through the Chapter 13 plan over a period of several months.

What can I do to reestablish my credit after filing bankruptcy?

In some jurisdictions there may be debtor education programs offered in connection with chapter 13 cases that can help you reestablish credit. Where such programs are not available, you may be able to obtain a "secured" credit card, which requires that the you deposit funds with the credit card issuer. This provides the opportunity to show responsible use of credit, which is a major factor in any lender's credit decisions. Other major factors are length of employment and length of residency.

How can I obtain a copy of my credit report and correct any errors?

All persons are entitled to one free credit report per year, from each of the three approved credit agencies. Additionally, whenever your application for credit is denied, the credit issuer is required to give you a copy of any credit report that was used in making the decision.
If there are errors in a report, such as an incorrect Social Security number or a debt that is not owed, you shoold make a request for correction in writing to the bureau, enclosing copies of any documents that woold establish the correct facts.

Call the Cressman Law Firm today for your initial consultation with Mr. Cressman.