FAQ

Under a Chapter 7 liquidation bankruptcy, the debtor’s properties may be sold by the trustee to pay off their debts unless they are exempt properties. [Exempt property is those owned by the debtor which is protected from execution by judgment creditors.] However, most Chapter 7 filings are considered “no asset” cases, which means that the debtor does not have non-exempt properties that trustee can sell. Therefore, most debtors get to keep whatever they have prior to filing bankruptcy. It is actually pretty rare for a debtor to lose assets or have things sold during a bankruptcy. Our experienced attorney can tell you from the start if any of your assets are at risk of being liquidated. If so, our attorney can also go over options and ideas of how to best protect your assets through a bankruptcy.

If you are being threatened with wage garnishment or repossession, there is help available. Filing for bankruptcy can stop garnishment and repossession, at least temporarily, by providing an automatic stop against collection actions.

For assistance stopping repossession and wage garnishment, call Skinner Law, LLC at 913-260-0333. After we discuss your financial situation, our bankruptcy lawyer will tell you if filing for bankruptcy is a good option for you.

All chapters of bankruptcy can stop wage garnishment. In fact, filing for bankruptcy is the most common way to stop wage garnishment. Bankruptcy does this by triggering an automatic stay that stops collection activities during the bankruptcy process. Except for garnishments to satisfy domestic support obligations, your creditors will no longer be allowed to garnish your wages.

The automatic stay also prevents lien holders or lenders from repossessing the property, seizing collateral, or filing or foreclosing on liens. Under normal circumstances outside of bankruptcy, if you have a secured debt, such as a mortgage or car loan, the lien holder or lender has the right to repossess the collateral if you are no longer making the loan payments. The lender or lienholder takes the property and sells it to recover their financial losses. However, during the bankruptcy process, creditors are not allowed to do this unless they obtain the bankruptcy judge’s permission using a special legal tool called a motion for relief from the automatic stay and this takes time. Call Skinner Law, LLC at 913-260-0333 for a free consultation.

In most bankruptcy cases, you only have to go to a proceeding, called the “meeting of creditors,” to meet with the bankruptcy trustee assigned to your case and any creditor who chooses to come. Most of the time, this meeting will be a short and simple procedure where you are asked a few questions about your bankruptcy forms and your financial situation. Attorney Nancy Skinner will be there to represent you.

There may be benefits to only one spouse filing for bankruptcy. Married couples are not required to file bankruptcy jointly. There are several reasons they may choose to have only one spouse file:

• If the couple is recently married and one spouse incurred significant debt prior to the marriage, the other spouse is probably not responsible for that debt.
• If a couple has been married for only a few years and one spouse filed bankruptcy prior to the marriage, he or she may not be eligible yet to file again.
• When only one spouse files, creditors usually cannot collect from the non-filing spouse payments for debts that were discharged in bankruptcy. This also means the non-filing spouse can file bankruptcy in the future if necessary.

However, some couples choose to file jointly if they feel they are responsible together for the debt. They may also not want their spouse to later be liable for the debt they incurred jointly.

No employer — government or private — may fire you because you filed for bankruptcy. Nor may an employer discriminate against you in other terms and conditions of employment  — for example, by reducing your salary, demoting you, or taking away responsibilities — because of your bankruptcy.

However, if there are other valid reasons for taking these actions, the fact that you filed for bankruptcy won’t protect you. In other words, an employer who wants to take negative action against you can do so provided there are other valid reasons to explain the action — such as tardiness, dishonesty, or incompetence. But if you are fired shortly after your bankruptcy is brought to your employer’s attention, you might have a case against the employer for illegal discrimination because of your bankruptcy.

In practice, employers rarely find out about a Chapter 7 bankruptcy filing. However, if a creditor has sued you, obtained a judgment, and started garnishing your wages, your employer will get the news. The bankruptcy will stop the wage garnishment, and your employer will be notified about it. In such a situation, your employer (or at least the payroll department) already knew you were having financial problems and will probably welcome the bankruptcy as a way for you to take affirmative steps to put your problems behind you.

If you file for Chapter 13 bankruptcy, your employer may learn of your bankruptcy case. If you have a regular job with regular income, your Chapter 13 payments may be automatically deducted from your wages and sent to the bankruptcy court. (This is called a “wage withholding order.”).

No federal, state or local government agency may take your bankruptcy into consideration when deciding whether to hire you. There is no corresponding rule for private employers, however, and some people find that having a bankruptcy in their past comes back to haunt them, particularly when applying for jobs that require them to deal with money (book­keeping, accounting, payroll, and so on).

Many private employers conduct a credit check on job applicants as a matter of course and will find out about your bankruptcy from the credit report. While employers need your permission to run a credit check, employers can also refuse to hire you if you don’t consent. If you’re asked to give this authorization, consider speaking candidly about what the employer will find in your file. Being honest upfront about problems that are truly behind you may outweigh any negative effects of the bankruptcy filing itself.

After filing bankruptcy, it will show up on your credit history for up to10 years. But it’s no longer the black mark it has been in the past. Plus, the older a bankruptcy filing is the less it will affect your ability to get credit. And chances are your credit was not great as a result of your overdue debt, so filing bankruptcy could actually improve your situation.

Bankruptcy law requires that you provide a complete and accurate listing of all your income, expenses, property, debts, and creditors when you file for bankruptcy. Otherwise, your bankruptcy may be denied. Therefore, gather the following materials:

• Copies of your most recent bills and credit card statements.
• Copies of your bank statements for the last six months.
• Copies of your tax returns for the last four years.
• Copies of your pay stubs for the last six months.
• Copies of your most recent statements for any car or house mortgage debts.
• Copies of any court documents you have for any lawsuits you were involved in during the last twelve months.

Also think about:

• What are your significant assets?
• Are any of your debts secured by collateral?
• Is there any action about to occur to foreclose or repossess property or to shut off utility service?