Common Questions

What is a Chapter 7 bankruptcy? 
A Chapter 7 Bankruptcy is a complete “discharge” of all or most unsecured debts, like medical bills, credit cards, signature loans, etc. Secured loans (like cars and home mortgages) must be paid and kept current if you want to keep that property.

What is a Chapter 13 bankruptcy?
It is a court protected repayment plan that stops actions against you, the debtor, by creditors while the plan is in effect (usually for three to five years). The debtor can keep enough of his income to pay the ordinary necessary living expenses, usually car payments and mortgage payments too, child support, and other items, BUT any income over and above that must go to unsecured creditors. Most debts that can’t be paid within the term of the plan (3 to 5 years) are discharged.

What is a “discharge”?
It is a Court order releasing you from all dischargeable debts and ordering your creditors not to attempt to collect from you any more. A debt that is discharged in your bankruptcy is completely wiped out, and you do not have to pay it.

When should a Chapter 13 be filed?

Who may file under Chapter 7?
Almost any person who resides in, who does business in, or who has property in the United States may file under Chapter 7. Usually you must file in the state where you have lived for the majority of the last six months (usually 90 days).

When is the best time for me to file bankruptcy?
The answer varies from case to case. You may need to file right away if you are being sued, garnished or a judgment is about to enter against you. If you are expecting a large tax refund, property settlement or other sum of money, you may want to wait for a better time. You should discuss this with the attorney.

How does filing under Chapter 7 affect lawsuits and garnishments that have been filed against you?
The filing of a Chapter 7 case automatically stops most lawsuits, garnishments and attachments that have been filed against you.

Will my employer be notified that I filed bankruptcy? 
Employers are not routinely notified when a Chapter 7 case is filed.

Do I lose or give up any of my rights by filing bankruptcy? No. Filing bankruptcy is not a criminal proceeding, and a person does not lose any of his civil or constitutional rights by filing. It is illegal for either private or governmental employers to discriminate against you for filing bankruptcy. It is also illegal for local, state or federal governmental units to discriminate against a person as to the granting of licenses (including a driver’s license), permits, and similar grants because that person has filed bankruptcy.

What about my vehicles or home mortgage? What will my finance company or bank do?
If you want to keep your vehicles, you must keep your monthly payments current along with your insurance and property taxes. You will probably have to sign a “Reaffirmation Agreement” stating that you will continue to pay the monthly payments in spite of the fact that you filed bankruptcy. You should discuss this with the attorney.

For more information about Bankruptcy please check out the follow resources:
U.S. Bankruptcy Court District of Kansas
U.S. Bankruptcy Court