1.) Does the law require that I receive bankruptcy counseling?
Yes, according to the Bankruptcy Abuse and Prevention and Consumer Protection Act of 2005 (BAPCPA).
2.) If so, what type of counseling do I need to fulfill these requirements?
BAPCPA requires both a Bankruptcy Pre-Filing Counseling session and a Bankruptcy Pre-Discharge Education course, so there is one counseling session and one education session.
3.) My spouse and I are filing jointly, do we both have to take the classes at the same time?
Couples are not required to take the sessions together; however, all parties needing a certificate must attend a counseling session and an education course.
4.) How quickly can I get through my entire bankruptcy?
It depends on the chapter being filed. Chapter 7s can take anywhere from 3 to 6 months from the time the petition is submitted to the court to the completed discharge. A Chapter 13 can take anywhere from 3 to 5 years.
5.) Chapter 7 or Chapter 13 bankruptcy–what’s the difference?
A Chapter 7 involves the liquidation of a debtor’s unsecured debt. A Chapter 13 is a structured repayment plan through the court and trustee.
6.) How do bankruptcy and a Debt Management Plan differ?
A DMP is a voluntary repayment plan established outside of the court system and is typically administered by a non-profit credit counseling agency. Bankruptcy is a legal proceeding asserting your legal right to negotiate with your creditors to have your debt liquidated or restructured for repayment.
7.) How many years will bankruptcy remain on my credit report?
A Chapter 7 bankruptcy remains on the credit report for 10 years. Non-discharged Chapter 13 bankruptcies may also remain for 10 years, but usually Chapter 13s remain for seven years.
8.) Will a bankruptcy affect my credit the same as a Debt Management Plan would?
On a DMP, each creditor will determine if they will report and how they will report your account. In a bankruptcy, a public record is created which will remain on your credit report for up to 10 years. You may call each of your creditors and ask exactly how each creditor will report a DMP to the credit bureaus so you may compare the potential credit damage of each option.
9.) How much will it cost for me to file bankruptcy?
Attorney fees can vary substantially depending on the case and service delivery. Attorney fees should generally be in the range of $1,000-$2,000. There are also court filing costs:
• Chapter 7 court filing costs are approximately $299.
• Chapter 13 court filing costs are approximately $274.
10.) How do I file for bankruptcy?
The simplest way to get started is to obtain your Bankruptcy Pre-Filing Counseling Certificate and then contact an attorney.
11.) I don’t understand the idea of a “Means Test.” What is it?
The Means Test is a qualifier administered by the attorney to determine if a consumer qualifies for a Chapter 7 filing, or has the means (or ability) to repay a portion of the debt owed through a Chapter 13 filing.
12.) What do I do if I don’t even have the funds to hire an attorney?
Clearpoint strongly encourages client to utilize the professional services of a qualified attorney. Other options and resources may include free or low-cost legal service or assistance through Legal Aid clinics, the Legal Aid Foundation, or pro-bono work provided by your local bar association.
13.) Who will be able to see that I filed bankruptcy?
14.) What should I do with my Bankruptcy Debtor Education Certificate?
Provide it to your attorney for submission to the court to complete your bankruptcy proceeding. If you are not using an attorney, you will need to determine which form is appropriate for your case.
15.) Will Clearpoint’s bankruptcy staff help in completing my bankruptcy documentation?
Clearpoint is neither a legal advisor nor a petition preparer and cannot help in the preparation of bankruptcy forms.
Important Advisory: Clearpoint will NEVER text, email, mail or call to ask you to send or deposit money to any account other than your own (according to your chosen payment method associated with a Debt Management Program, or for specific services like housing education or bankruptcy counseling). If you receive any correspondence of this nature, please beware that it could be a scam. Do not respond or share any personal or banking information, and contact our office immediately at 800 750 2227, or by email.