WHAT IS BANKRUPTCY?
Bankruptcy is a legal proceeding in federal bankruptcy court by which a person who has more debts than he or she can pay seeks relief from those debts. The right to file a bankruptcy exists under the law, and this law was designed mainly to take care of serious problems with debts and to allow a fresh financial start.

There are two Chapters of bankruptcy that consumers use. Chapter 7, (commonly called "total" bankruptcy), and Chapter 13, which is a consolidation and repayment program. In Chapter 7 bankruptcy, a Trustee sells the debtor's property (other than exempt property) and uses the sales proceeds to pay creditors. The result of a successful bankruptcy proceeding is a discharge in bankruptcy, which releases the debtor from payment of affected debts. Chapter 13, which consolidates debt, allows payments to be made for up to 5 years to pay off the consolidated debt. The plan suspends legal and collection actions against the debtor for the period it is in effect, and may also suspend such actions against persons who co-signed loans with the debtor.

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WHO CAN FILE FOR BANKRUPTCY?
In general, any person or business can file for bankruptcy. There is no minimum amount of debt required; however, in most cases, a person who files does owe considerably more in debts than he or she can pay. To determine which Chapter will work best for you, give us a call. We can help.

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WILL ALL MY DEBTS BE DISCHARGED?
No. A debtor will still owe certain debts, including some taxes, alimony, child support, fines, student loans, and other non-dischargeable debts. A discharge is granted to the honest debtor. If an individual has acted fraudulently with in a bankruptcy case, such as by concealing assets, a discharge may not be granted. Even in a Chapter 13 repayment plan, student loans will only be paritially paid through the bankruptcy. For information specific to your case, contact Berry & Tripp for a free consultation.

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WILL I BE ABLE TO KEEP ANY PROPERTY IF I GO BANKRUPT?
Yes. Certain property is exempt from a bankruptcy proceeding and can be kept by the debtor. State law determines which property is exempt for bankruptcies filed in each state. The exemptions app;y only to a debtor's equity in real or personal property which means that if property has been placed as security for a loan (such as a mortgage on a residence or a lien on the title of a car), the availability of the exemption may be affected. Exemptions should be discussed in detail with your attorney.

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DOES MY SPOUSE HAVE TO FILE WITH ME?
No. There is no requirement that a husband and wife file together. In some instances, if most debts are owed only by one spouse, it may be appropriate for that spouse to file alone. However, jointly owned property may be affected if only one spouse files. And, in most cases, a husband and wife have the same debts or have co-signed the same loan agreements. If only one spouse files in this situation, the creditors can continue to demand payment from the spouse who did not file. Give us a call at 1-800-995-3050 and we can outline your best options.

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WHAT IF I HAVE ASSETS?
In a Chapter 7 bankruptcy, only property of the debtor that is not exempted is available to be sold and used toward payment of debts. If you have assets that can be liquidated, Chapter 13 may be a better option. The Chapter 13 bankruptcy can protect the equity in some assets, such as houses and cars. Luxury items can pose a problem with either bankruptcy. For information specific to your situation, contact Berry & Tripp for a free phone consultation.

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HOW WILL BANKRUPTCY AFFECT MY CREDIT?
As a general rule, there is no limitation on the future ability of a debtor to own or acquire real or personal property. It will take time to rebuild your credit rating, but there are creditors who will work with you after bankruptcy. Interest rates can be higher for some time, but with diligence, a good credit rating can be re-established. In some cases, bankruptcy may actually improve the ability to obtain credit, since many of the debtor's former debts are discharged.

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HOW WILL BANKRUPTCY AFFECT PERSONS WHO CO-SIGNED LOANS WITH ME?
A person who co-signed with you on a loan may still be held responsible for the debt if you file a Chapter 7 bankruptcy. A Chapter 13 bankruptcy has the abilitly to protect a co-signer if the debt is paid in full through the bankruptcy plan. Give us a call and we can explain the effect your bankruptcy will have on anyone who co-signed with you.

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CAN MY CREDITORS PREVENT A DISCHARGE?
Under limited circumstances, a creditor may be able to block a bankruptcy discharge. For example, if a creditor can prove that he gave a loan in reasonable reliance in a financial statement which was false in important details and given with the intent to deceive him, he may avoid having the debt discharged. If a creditor tries to avoid the discharge for this reason and fails, the bankruptcy judge may order the creditor to pay for the debtor's attorney fees and costs in defending the action.

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CAN I FILE FOR BANKRUPTCY MORE THAN ONCE?
Yes, but there are legal requirements that affect how often you may file. Generally, there must be six years between Chapter 7 bankruptcy discharges. For Chapter 13's, the limits are not as definite. Contact Berry & Tripp to find out if you are eligible, and which Chapter would benefit you most.

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HOW CAN I TELL WHETHER I SHOULD FILE FOR BANKRUPTCY?
If you feel bankruptcy may be necessary, you should consult an attorney that specializes in bankruptcy law. If bankruptcy is appropriate, you will need a qualified attorney to handle the filing, explain all procedures, evaluate your exemptions and non-dischargeable debts, and attend to all the other matters involved in a bankruptcy proceeding. Call our office to have all options explored that will benefit YOU, and the advantages and disadvantages of each form of relief.

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