Frequently Asked Questions

Chapter 13 allows the debtor to keep a valuable asset, such as an estate, and make payments to creditors over time – usually three to five years.

In chapter 7 cases, a trustee collects the assets of the debtor's estate, reduces them to cash, and makes distribution to creditors, according to the debtor's right to retain certain exempt property and the rights of secured creditors.

Because there is sometimes little or no nonexempt property in chapter 7 cases, there may not be an actual liquidation of the debtor's assets.

You should list every one of your creditors. This includes taxes, child support, student loans, credit cards, medical bills, utilities, mortgages, car loans, finance companies, credit unions, etc. Some may not be discharged, but you should list them all.

Filing a petition under chapter 7 or chapter 13 "automatically stays" actions against the debtor and the debtor's property, such as foreclosure, repossession, garnishments, collection calls, etc. Creditors usually receive notice of the filing of the petition from the clerk, and they are restricted from trying to collect from the debtor as long as the stay is in effect.

Upon the filing of either a chapter 7 or a chapter 13 petition, an impartial case trustee is appointed by the United States trustee to monitor the case. The chapter 7 trustee will determine whether there are any nonexempt assets and will liquidate these assets for the benefit of creditors. The chapter 13 trustee administers the payments under the plan.

The meeting of creditors is a required, administrative hearing which allows the chapter 13 or chapter 7 trustee to ask the debtor questions regarding all debts, assets, and finances.

The meeting of creditors is a required, administrative hearing which allows the chapter 13 or chapter 7 trustee to ask the debtor questions regarding all debts, assets, and finances.

The confirmation hearing is where the judge reviews a chapter 13 debtor's proposed repayment plan. Following the court's approval of the plan, the trustee will begin making payments to the creditors who have filed claims in the case.

A discharge releases the debtor from personal liability for certain specified types of debts and prevents creditors from taking any form of collection action on the discharged debts. In most chapter 7 cases, the debtor receives a discharge just a few months after filing for bankruptcy. In chapter 13 cases, the court grants the discharge following the debtor's successful completion of all payments under the plan.

Although a debtor is relieved of personal liability for all debts that are discharged, a valid lien (i.e., a charge upon specific property to secure payment of a debt) that has not been avoided (i.e., made unenforceable) in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien.

Not all debts are discharged, and the debts that are vary under each chapter of the Bankruptcy Code. Additionally, Section 523(a) of the Code outlines the specific categories of debts that Congress has determined to be non-dischargeable for public policy reasons. Non-dischargeable debts must be repaid after bankruptcy.

In chapter 7 cases, the debtor does not have an absolute right to a discharge. An objection to the debtor's discharge may be filed by a creditor, by the trustee in the case, or by the United States trustee. A creditor who desires to object to the debtor's discharge must do so by filing a complaint in the bankruptcy court before a specific deadline. In chapter 13 cases, the debtor is entitled to a discharge upon completion of all payments under the plan.

May a debtor pay a discharged debt after the bankruptcy case has been concluded?

A debtor who has received a discharge may voluntarily repay any discharged debt even though it can no longer be legally enforced. Sometimes a debtor agrees to repay a debt because it is owed to a family member or because it represents an obligation to an individual for whom the debtor's reputation is important, such as a family doctor.

A governmental unit or private employer may not discriminate against a person solely because the person was a debtor, was insolvent before or during the case, or has not paid a debt that was discharged in the case. The law provides express prohibitions against the following forms of governmental discrimination: discrimination with respect to hiring, the termination of an employee, and the denial, cancellation, suspension, or refusal to renew a license, franchise, or similar privilege. The law also restricts private employers from discriminating with respect to employment if the discrimination is based solely upon the bankruptcy filing.

Presently, the court charges a fee for filing chapter 7 of $335.00. The court's filing fee for chapter 13 is $310.00