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Bankruptcy FAQs

Between collection calls and letters threatening wage garnishment, debt can quickly get overwhelming. The solutions that are available may seem overly complicated, or you may fear that you cannot afford seeking a lawyer's help for debt relief.

Free bankruptcy consultation: At Roger A. Kraft, Attorney at Law, P.C., I offer a free initial consultation to discuss your bankruptcy options. Please contact my law office in Salt Lake City, Utah, for more information at 801-871-8353 or toll free at 800-640-3207. Otherwise, read the information below for more information about Chapter 7 and 13 bankruptcy.

Common Bankruptcy Questions

  • What Is Chapter 7 Bankruptcy?
  • How Do I Qualify For Chapter 7 Bankruptcy?
  • What Do I Get To Keep?
  • What Will I Lose?
  • Does Chapter 7 Stop Foreclosure, Wage Garnishment And Collection Calls?
  • What Happens To My Debt?
  • How Long Does Bankruptcy Take?
  • What Will Chapter 7 Do To My Credit?
  • How Much Does Chapter 7 Bankruptcy Cost?
  • How Soon Can I File Bankruptcy?
  • I've Already Filed Chapter 7 Bankruptcy. Can I File Again?
  • What Is Chapter 13 Bankruptcy?
  • Why Should I File Chapter 13 Bankruptcy?
  • How Much Will My Payment To The Trustee Be?
  • What Do I Get to Keep In Chapter 13 Bankruptcy?
  • What Will I Lose In Chapter 13 Bankruptcy?
  • What Happens To My Debt?
  • How Much Does Chapter 13 Bankruptcy Cost?

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is a fresh start and a liquidation of your debts and your estate. When you file Chapter 7, a trustee (usually an attorney) will be assigned to administer your estate and take whatever assets can be sold to pay your creditors. Most Chapter 7 cases are considered "no-asset cases," and the debtor (you) loses little or nothing because the assets are either exempt or of no value to the trustee.

How Do I Qualify For Chapter 7 Bankruptcy?

Qualifying for Chapter 7 can be tricky in some cases. Generally speaking, it depends on your income. If you make more than the average family of your size, you may not qualify. You need a good, competent attorney (like me) with the experience and creativity (like me) to get you qualified.

What Do I Get To Keep?

Having the right attorney means everything when it comes to exempting your property so you can keep it. You need an attorney who not only understands the exemptions, but one willing to fight for your right to enforce them.

Most of your assets are exempt up to a certain value. In most cases, you may keep up to $20,000 (each owner) of equity in your primary residence. That means that usually you get to keep your home if the trustee can't sell it for enough to pay off all mortgages and liens, closing costs, etc., AND give each of the owners at least $20,000 cash. Contact us for more details.

Other exemptions include automobiles,* furniture and appliances, musical instruments,* business tools,* clothing, sentimental items,* retirement plans such as 401(k)s, burial plots, and many other items. Contact us for more details. (*Some exemptions are allowed only up to a certain value.)

What Will I Lose?

If an item of personal property is not exempt, the trustee may force you to turn that item over for sale or auction. If you really want to keep the item, most trustees will let you buy it back. This usually includes items such as automobiles, ATVs, boats, etc., that are paid for and/or have value above the exemption amount. If you have a tax refund coming to you at the time you file your case, you WILL lose part or all of that refund. Contact us for more detail on how to protect your tax refund.

Does Chapter 7 Stop Foreclosure, Wage Garnishment And Collection Calls?

The filing of the case will stop all efforts to collect debts, including all garnishments, foreclosures, writs of execution and all court hearings related to the debt collection. If a collector continues to harass you in any way after getting notice of the bankruptcy filing, we may be able to have the collector sanctioned and pay you money! (Wouldn't that be cool?)

What Happens To My Debt?

Most of your unsecured debt (credit cards, medical bills, personal loans, deficiency amounts on repossessed cars, attorney fees, etc.) is discharged in a Chapter 7. Secured debt (car loans, RC Willey bills, etc.) can usually be reaffirmed if you want to keep the item or surrendered if you want to give the item back to the lender and be free of the debt. In some cases, even taxes and student loans can be discharged. Contact us for more information.

How Long Does Bankruptcy Take?

Depending on your situation, Chapter 7 can take as little as three to five months or as long as several years. Most "no-asset" cases are closed within four to five months.

What Will Chapter 7 Do To My Credit?

It will lower your credit score and can stay on your credit report for up to 10 years. However, most people filing Chapter 7 bankruptcy already have such bad credit that a Chapter 7 doesn't really hurt them much. In fact, many lenders will be "chomping at the bit" to lend you money right after you file Chapter 7. Contact us to find out why.

How Much Does Chapter 7 Bankruptcy Cost?

In Utah, most competent bankruptcy attorneys charge attorney fees ranging from $750 to $1,000 per case. In addition to the attorney fees, you must pay a court filing fee of $306 and approximately $30 to $50 for a mandatory credit counseling class. (Contact us for more detail.) If you own a business or have some other complicated matter, costs may increase.

How Soon Can I File Bankruptcy?

As soon as you provide some personal and financial information for us and complete your credit counseling class, we can file almost immediately. Occasionally, we will file an "emergency" case (to stop a foreclosure or garnishment), but be prepared to pay more in attorney fees.

I've Already Filed Chapter 7 Bankruptcy. Can I File Again?

This is one area where having the right attorney can be critical. Generally speaking, you cannot file another Chapter 7 case within eight years of a prior filing. However, there may be other "creative" alternatives that will accomplish the same thing as a Chapter 7.

What Is Chapter 13 Bankruptcy?

First, it's a chapter of bankruptcy that only experienced attorneys should file. If you hire an inexperienced attorney, you can almost bet on having some major problems.

Chapter 13 is a reorganization of your debt. In a Chapter 13, we will put together a plan paying back a portion of your debt. Other than your regular mortgage payment(s) and living expenses, you will have one monthly payment to the Chapter 13 trustee.

Why Should I File Chapter 13 Bankruptcy?

Other than the fact that you probably can't sleep at night, here are some reasons:

  • You're behind on house payments and don't want to lose your house.
  • You're behind on car payments and don't want to lose the car.
  • You've got cool stuff like guns, boats, jewelry, etc., that you don't want to lose.
  • You owe child support that you can't make up without garnishments, etc.
  • You owe taxes that you can't make up without garnishments.
  • You are ineligible for Chapter 7.

How Much Will My Payment To The Trustee Be?

This varies from case to case depending on your assets, debts and monthly income. We can usually come up with a pretty good estimate by the end of your first appointment.

What Do I Get To Keep In Chapter 13 Bankruptcy?

In Chapter 13, you get to keep most of your assets. Usually the only assets you lose are luxury items that you owe money on such as extra cars, boats, ATVs, etc. In some cases, we can get creative and even keep those items.

What Will I Lose In Chapter 13 Bankruptcy?

Again, if you have luxury items pledged as collateral, the court may make you surrender them. The court feels that including luxury items in a plan means you will be making payments on unnecessary items. Contact us for more detail on how to keep those items.

What Happens To My Debt?

During your plan, the Chapter 13 trustee will make payments to your creditors. Secured creditors such as mortgage companies and auto lenders will be paid in full during the life of your plan. The same is true for taxes and child support or alimony. In most cases, your unsecured creditors will also receive a small amount. If the plan is confirmed (approved by the court) and you complete it, most of your remaining debt is discharged just like it would be in a Chapter 7. Contact us for more details.

How Much Does Chapter 13 Bankruptcy Cost?

The bankruptcy court determines the fees in each case and they generally fall into one of three fee structures depending on your individual case. The attorney fees will either be $3,000, $3,250 or $3,500. These fees are not payable all upfront. Most of the attorney fees will be spread out over time, usually three to five years. You must also pay $281 in filing fees and a small fee for two credit counseling classes.

Additional Questions? Contact Me For A Free Consultation.

If you have additional questions about bankruptcy, please do not hesitate to contact my office by calling 801-871-8353 or toll free at 800-640-3207. Evening and weekend hours are available by appointment. My office is centrally located near all courthouses from Provo to Ogden. My rates are affordable, and I accept credit cards.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.