If you’re thinking about bankruptcy, you probably have questions, and they’re mostly the ones I hear almost every day. Here are the ten most common, with straight answers. Every case is different, so treat this as a starting point, not advice for your situation. And if bankruptcy isn’t right for you, I’ll tell you so.
1. What type of bankruptcy is best suited for my situation?
Answer: The most common types of bankruptcy for individuals in Missouri are Chapter 7 and Chapter 13. Chapter 7 is a liquidation bankruptcy that allows for the discharge of most of your debts, while Chapter 13 involves a repayment plan wherein the debtor pays as much as they can or all of the debt for a period of time not to exceed 5 years. The best option depends on your specific circumstances, such as your income, assets, and financial goals.
2. How does bankruptcy affect my assets and property?
In Chapter 7 bankruptcy, some of your non-exempt assets may be sold to repay creditors. However, Missouri provides exemptions that protect certain property, such as your home, car, and personal belongings. In Chapter 13, you can typically retain your assets while repaying creditors through a manageable repayment plan.
3. Will bankruptcy stop creditor harassment and collection efforts?
Yes, once you file for bankruptcy, an automatic stay is put in place, which legally stops most collection actions, including calls, letters, lawsuits, and wage garnishments.
4. How does bankruptcy impact my credit score?
Filing for bankruptcy will have a negative impact on your credit score. However, it also provides an opportunity for a fresh financial start. With responsible financial management after filing, you can rebuild your credit over time.
5. Can I discharge all of my debts through bankruptcy?
While bankruptcy can eliminate many types of debts, certain obligations, such as child support, alimony, most student loans, and recent tax debts, are generally non-dischargeable, meaning they don’t go away.
6. How long does bankruptcy take?
Short answer: About three to six months for Chapter 7, and up to five years for Chapter 13.
I know, it feels like forever. That said, it’s not bad. A Chapter 7 case usually takes about three to six months from filing to discharge. A Chapter 13 plan can last up to five years, depending on the specifics of your case.
7. Will I have to attend court?
Yes, you will need to attend a meeting of creditors, also known as a 341 meeting. Though technically not a court, this is a required meeting with the Trustee appointed to your case. This meeting provides an opportunity for creditors to ask questions, but it is typically a brief and straightforward process. Since 2020, those have been conducted over the phone, though the “old days” may return, and we’ll be going back into court.
8. Can I keep my house and car in bankruptcy?
In most cases, you can keep your primary residence and vehicle, as long as you continue making payments and meet the necessary criteria, such as exemptions and reaffirmation agreements. The amount of equity also plays a factor in that, however, as you are only allowed to keep so much in equity. For a more thorough explanation, please see our page about Exemptions.
9. Will bankruptcy affect my ability to rent or get a loan in the future?
Bankruptcy will remain on your credit report for a certain period (typically 7-10 years). While it may impact your ability to obtain credit in the short term, it is possible to rebuild your creditworthiness over time.
10. How much does it cost to hire a lawyer in Missouri?
The cost of hiring a bankruptcy lawyer varies depending on several factors, including the complexity of your case, the attorney’s experience, the time involved, and the urgency of the situation. Prices will vary from county to county and state to state. I’ll quote you a flat fee at the consultation. It is advisable to discuss fees and payment arrangements during your initial consultation. We do offer flexible payment plans to make our services more affordable.
St. Peters, MO 63303
Phone: 636-486-1093
Fax: 636-634-3462
