FREQUENTLY
ASKED QUESTIONS
ABOUT BANKRUPTCY LAW

IF I FILE A PERSONAL BANKRUPTCY,
HOW LONG WILL IT REMAIN ON MY CREDIT RECORD?

A bankruptcy filing is a public record, and will be listed with
the other public records on your credit report, for seven to ten
years. Other examples of public records are civil judgments and
tax liens.

DO I NEED AN ATTORNEY TO FILE
A BANKRUPTCY?

No, the United States Bankruptcy Code does not require that you
have an attorney to file a personal bankruptcy. The bankruptcy petition,
schedules, statement of financial affairs, and statement of intentions
may be prepared without the assistance of an attorney. However,
bankruptcy law does require that you disclose the identity of any
person or organization who may provide you with assistance in filling
out this information. The assistance of an attorney is highly recommended
so as to advise you in regard to the exemption laws which are used
to protect your property. Additionally, an attorney can counsel
you as to the different chapters available under bankruptcy law,
so that you may make an informed decision as to the best way to
handle your debts.

Given the complexity of bankruptcy filing since the passage of
the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”),
and the additional requirements placed upon individuals seeking
bankruptcy relief, it is strongly suggested that an attorney be
hired for a bankruptcy filing.

WHAT IS THE DIFFERENCE BETWEEN
AN ATTORNEY AND A BANKRUPTCY PETITION PREPARER?

In order to be an attorney, an individual must have received a
college degree, as well as a law degree. In order to be licensed
to practice, the attorney must pass the bar exam for that state.
Furthermore, an attorney is required to attend annual continuing
legal education, in order to keep up with current law, and remain
in good standing with the bar. Bankruptcy attorneys are also required
to be admitted to practice in federal court.

A bankruptcy attorney is allowed to provide legal advice and guidance
to a consumer regarding their bankruptcy options. This includes
explanation of domestic issues, contract issues, lease issues, employment
issues, and other legal matters which may affect the bankruptcy
filing, or which may be affected by the bankruptcy filing. A bankruptcy
attorney is also allowed to explain the exemptions available under
applicable state or federal law, so that a consumer may protect
their property when filing bankruptcy.

A bankruptcy petition preparer is prohibited from giving legal
advice, or explaining the consequences of a bankruptcy filing. They
are only allowed to prepare a bankruptcy petition, in a form approved
by the Bankruptcy Court of that jurisdiction. They are not allowed
to assist the debtor in choosing exemptions, which is essential
to the protection of the consumer’s property in bankruptcy.
Likewise, they cannot address any non-bankruptcy legal issues which
may also arise in a consumer’s financial situation. Finally,
they cannot prepare you for your court hearing(s) or accompany you
to court.

HOW DO I GET UP TO DATE INFORMATION
ON MY CREDIT AND FINANCES?

If you believe that you will be unable to provide our office with up-to-date information, you may wish to consider downloading a copy of your free annual credit report from www.annualcreditreport.com. You are entitled to one free credit report per year from the participating credit reporting agencies. For security purposes, we would recommend that you do not permit anyone else to utilize the www.annualcreditreport.com website to obtain the information on your behalf. Please be aware that many websites that advertise “free” credit reports are actually soliciting enrollment in various credit-monitoring programs that may charge you a periodic fee.

WHAT TYPE OF PERSONAL BANKRUPTCY
SHOULD I FILE?

Most consumers typically file a Chapter 7 or Chapter 13 bankruptcy.
Each type of bankruptcy has some advantages and disadvantages, depending
upon the type of debts you owe, the value of your assets, and the
amount of your income.

A Chapter 13 bankruptcy is usually recommended in a situation where
an individual is facing foreclosure of real estate and/or the repossession
of an automobile. Additionally, a Chapter 13 may be preferred option
for an individual who has debts that cannot be eliminated in a Chapter
7 bankruptcy, such as some taxes and/or student loans. Finally,
a Chapter 13 may be an option to allow a consumer to protect assets
which may not be exempt in a Chapter 7 bankruptcy.

An individual who does not have any non-exempt equity in real property
or personal property, and does not have an excess of monthly income,
may be a better candidate for a Chapter 7 case. At Leiden and Leiden,
the primary purpose of our initial consultation with clients is
to analyze their financial situation, and explain the alternatives
available under both Chapter 7 and Chapter 13.

Under the Bankruptcy Abuse Prevention and Consumer Protect Act
(“BAPCA”), consumers are required to submit to a “means
test” to determine their eligibility for a Chapter 7 bankruptcy.
This requires the bankruptcy attorney to verify the client’s
income, based upon their tax returns, as well as pay stubs and other
proof of income. Once the consumer’s income is accurately
determined, it is compared to IRS guidelines, as well as actual
expenses of the consumer, to determine if there is any excess income.
If this test demonstrates that there is excess income, then the
Bankruptcy Court can compel a debtor to file a Chapter 13 case,
where they would repay all or a portion of their debts over a five
year period.

As part of your free consultation with our firm, we will calculate
the means test based upon your verifiable income and expenses, in
order to determine your eligibility under the different chapters
of bankruptcy.

WILL I LOSE MY HOME, CAR,
RETIREMENT PLAN OR ANY OTHER ASSETS DUE TO FILING A BANKRUPTCY?

Under bankruptcy law, certain exemptions are available to protect
consumer assets such as real estate, automobiles, retirement plans,
social security and disability benefits, as well as other assets.
At this time, the exemptions vary depending upon the state of your
residence. Even in a situation where a consumer may not be able
to exempt all of their assets, there may be a bankruptcy option
available, such as Chapter 13, which would enable the consumer to
retain those assets. Since retaining assets is usually the primary
concern of most consumers, most bankruptcy attorneys will take the
time to explain what exemptions are applicable to your particular
case, and whether or not any assets may be at risk in the event
that you filed a bankruptcy.

DO I NEED TO INCLUDE ALL OF
MY CREDITORS IN A BANKRUPTCY FILING?

Yes. It is a requirement of the Bankruptcy Court that you disclose
all of the creditors to whom you owe money. This includes creditors
that you wish to continue to pay, such as those who have financed
a house, mobile home, car or furniture. The Statement of Intentions
which is included in your bankruptcy petition will identify the
creditors which you wish to keep.

Please note that “creditors” includes anyone to who
you owe money, or who may have a claim against you. This would include
personal loans from friends or family members. This would also include
any debts which are in dispute. If you have a question as to whether
or not a potential debt or claim should be included, consult your
bankruptcy attorney.

WHAT INFORMATION DO I NEED
TO PROVIDE TO MY BANKRUPTCY ATTORNEY IF I DECIDE TO FILE A BANKRUPTCY?

Verification of income for at least the sixty days prior to
the bankruptcy filing, including recent pay stubs, social security
statements or retirement statements. It is also necessary to provide
any information regarding other income, even though it may not
be taxable or otherwise disclosed.
Creditor information, including any recent correspondence that
the consumer has received from the creditor within the ninety
days prior to filing. This is necessary because the law requires
that creditors be notified by the Bankruptcy Court at the address
listed on the most recent correspondence mailed to the consumer.
Copies of any lawsuits, judgments, and/or garnishments against
you.
In all cases, the bankruptcy attorney will need to review the
consumer’s income tax returns, when required to file, for
the two years immediately preceding the bankruptcy filing. Additionally,
in all Chapter 13 cases, a consumer will be required to file all
annual income tax returns, if applicable, on a timely basis, and
retain copies in the event that they should be requested by the
court.
If you own real estate, you may be requested to provide copies
of any county property tax appraisals, or any recent private appraisals
which have been performed on your real estate. The attorney may
need to review copies of all deeds to property that the consumer
may own, either individually, or with other persons. Additionally,
it may be necessary for the debtor to provide proof of any mortgages
and/or liens against the property.
If you are financing an automobile, you will be required to
maintain full coverage insurance on that vehicle, and provide
proof of that insurance to your attorney. In certain cases, it
may be necessary for the attorney to inspect the title to all
vehicles owned by the consumer, as well as copies of the sale
contracts for vehicles which are being financed.
If a consumer is a participant and/or contributor to any type
of pension, retirement plan, 401K plan, IRA, or any other type
of investment program, then copies of those documents should be made available to your attorney for inspection.
Since January 1, 2002, all consumers who file bankruptcy are
required to provide a picture I.D. and government issued proof
of their social security number at their first court hearing.

WILL I HAVE TO GO TO COURT?

Under both Chapter 7 and Chapter 13, the debtor in a bankruptcy
case is required to attend a Meeting of Creditors, which is scheduled
approximately 28-40 days after the case is filed. Your attorney
will accompany you to this hearing. The purpose of the Meeting of
Creditors is for the debtor to be questioned about the bankruptcy
petition which they have filed, and any property which they own.
The meeting is presided over by the bankruptcy trustee, and creditors
are invited to attend. Attendance by creditors in the Augusta division
is uncommon.

There may be additional hearings in a chapter 7 case, depending
upon whether or not the debtor intends to return any property back
to creditors, and whether or not any creditors object. Additionally,
in a Chapter 7 asset case, where assets may be sold for the benefit
of creditors, additional court hearings will be scheduled. If applicable,
your attorney will advise you as to whether or not attendance at
these additional hearings will be necessary.

In Chapter 13 cases, a confirmation hearing is scheduled in addition
to the Meeting of Creditors. The debtor’s attendance is required
at this hearing as well. There may be additional hearings involved
in a Chapter 13 case, for Motions for Relief from Stay or Motions
to Dismiss, which the debtor would have to attend as necessary.

Your bankruptcy attorney should advise you at your initial consultation
and during the course of representation as to what court hearings
you should have to attend, and what you should expect at your hearing.

WHAT HAPPENS WHEN I GO TO
COURT FOR MY MEETING OF CREDITORS?

The Meeting of Creditors is presided over by a bankruptcy trustee.
This is an attorney who is appointed by the court to supervise your
case, question you about the petition and schedules which you have
filed with the Bankruptcy Court, and liquidate any non-exempt assets
for the benefit of your creditors. Your creditors are notified about
the Meeting of Creditors as well, and may attend, although they
are not required to do so. Your bankruptcy attorney will attend
the Meeting of Creditors with you as well.

WHAT FEES ARE INVOLVED IN
A CONSUMER BANKRUPTCY FILING, AND HOW ARE THEY PAID?

Presently, the filing fee for a Chapter 7 bankruptcy is $299.00.
The filing fee for a Chapter 13 bankruptcy is $274.00. These fees
may be subject to change, due to periodic evaluation of the cost
of processing bankruptcy cases by the bankruptcy courts.

At Leiden and Leiden, there is no set amount of attorney fees for
the filing of a Chapter 7 bankruptcy case. Because every case is
unique, our firm uses the free consultation to evaluate each case
on its own, and determine the amount of time and effort necessary
to accomplish the client’s objectives. The fees are based
on the amount of work involved, due to the factual circumstances,
and legal issues presented in each particular case. The amount of
the fee, and method for payment, will be discussed with the client
at the end of the consultation.

In Chapter 13 cases, arrangements can be made for some of the fees
to be paid through the court supervised Chapter 13 plan. The amount
of money charged for a Chapter 13, absent special circumstances,
is set by the court. The amount of fees to be paid prior to filing
a Chapter 13 case will depend upon special circumstances of that
case, including complex legal issues, or creditor objections.

All fees associated with the filing of the bankruptcy, as well
as the manner of payment of those fees, is required to be disclosed
to the Bankruptcy Court. The Bankruptcy Court has the authority
to order the refund of any attorney fees which are unreasonable
or unjustified.

CAN I INCLUDE TAX DEBT IN
A BANKRUPTCY FILING?

In a Chapter 7 bankruptcy, federal and state income taxes can only
be discharged in certain circumstances. This will depend upon the
age of the tax, the timeliness of the filing of the returns, and
other factors surrounding the reporting of income to federal and
state taxing authorities. However, even if the tax debt can be discharged
in a Chapter 7 bankruptcy, any tax liens on real or personal property
may remain.

Income taxes may be repaid through a Chapter 13 bankruptcy, without
interest or penalties. However, income tax returns must have been
filed, where applicable, for all years prior to the filing of the
Chapter 13 bankruptcy. You should notify your attorney if you failed
to file income tax returns as required by law.

CAN I INCLUDE STUDENT LOANS
IN A BANKRUPTCY FILING?

Under the Higher Education Act of 1994, loans obtained for educational
purposes cannot be discharged in a Chapter 7 bankruptcy. There may
be special circumstances in some cases which would allow an individual
to discharge some or all of their student loan debt.

Student loan debt can be included in a Chapter 13 repayment plan.
Whether or not the student loans can be paid off entirely in the
Chapter 13 plan would depend upon the particular requirements of
the case.

While the Bankruptcy Code offers little assistance with the management of student loan debt, there may be options available. If you have federally guaranteed student loan debt, you may wish to visit the Income Based Repayment website at ibrinfo.org to research your alternatives

WHAT TYPE OF BANKRUPTCY
SHOULD I FILE?

The type of consumer bankruptcy which would best suit you, whether
Chapter 7 or Chapter 13, will depend upon your particular and unique
financial circumstances. Under the Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005, there will be certain situations
where a consumer may prefer a Chapter 7 bankruptcy, but is required
by the new law to file a Chapter 13. Furthermore, if a consumer
has filed a previous bankruptcy, then there may be limitations on
the type of bankruptcy that they would be allowed to file under
the new law. Please notify your attorney if you have ever filed
a bankruptcy, so that they will be able to provide you with the
best possible advice. Your bankruptcy attorney should recommend
the best option for you depending upon these factors.

WHAT DO I HAVE TO DO TO
BE ELIGIBLE TO FILE A BANKRUPTCY?

The Bankruptcy Abuse Prevention and Consumer Protect Act of 2005
requires that an individual must participate in credit counseling
with a credit counseling agency that is certified by the United
States Trustee of the district in which the consumer resides. A
list of approved credit counseling agencies will be available at
the Bankruptcy Court clerk’s office, as well as our office.
A copy of the current approved credit counseling agency list is
available via download from this website, or by request to our office.

Bankruptcy Courts are authorized to make limited exceptions from
the credit counseling requirement. This would involve a situation
where suitable approved credit counseling is not available in the
location where the consumer resides. Furthermore, credit counseling
may be temporarily waived in the event of an emergency, provided
the consumer engages in such credit counseling following the filing
of the case. However, the courts that have ruled on this issue since
the passage of BAPCPA have strictly interpreted the definition of
an emergency, so such a waiver has not been granted very frequently.

While each credit counseling agency will have its own requirements
for what a consumer must provide in order to receive counseling,
it is safe to assume that they will have to review the same documents
that a bankruptcy attorney would have to review, in order to counsel
a consumer about their options under bankruptcy law.

ARE THERE ALTERNATIVES TO
FILING A CONSUMER BANKRUPTCY WHICH I SHOULD CONSIDER?

Nowadays, it is almost impossible to watch television, read the
newspaper or surf the internet without being bombarded by supposed
bankruptcy alternatives or debt remedies. These proposed solutions
may include non-profit credit counseling, compensated debt management
programs, second mortgages and/or refinancing of a principal mortgage.
Finally, some individuals may be able to negotiate directly with
creditors, in order to reduce or eliminate interest, and decrease
the payments.

At Leiden and Leiden, as well as many other bankruptcy firms in
the CSRA, there is no charge for the initial bankruptcy consultation.
As a result, an individual can take advantage of the opportunity
to consider bankruptcy alternatives before taking steps which may
further jeopardize their financial situation, such as accumulating
more debt against their residence.

Credit counseling may be successful if the creditors are willing
to cooperate. However, there are some types of creditors who will
not participate in credit counseling. Secured debt and tax debt
can often not be included in credit counseling arrangements. In
addition, credit counseling may not be an option for an individual
who has been served with a lawsuit, or has a judgment. You may contact
our office for a list of court-approved credit counseling agencies.

There are many scams, especially on the internet, in regard to
debt management programs that promise to reduce or eliminate your
monthly payments. The legitimacy of such programs can be investigated
by calling the Attorney General’s Office for your particular
state, Better Business Bureau, or contacting the Federal Trade Commission.

IS THERE ANY CHARGE FOR
MY INITIAL BANKRUPTCY CONSULTATION?

Leiden and Leiden, P.C., like most firms locally, does not charge
a consultation fee for the initial bankruptcy consultation. Fees
are usually discussed after the consultation, once a bankruptcy
alternative is selected.

WILL MY EMPLOYER BE NOTIFIED
OF MY BANKRUPTCY FILING?

This depends on the type of bankruptcy that you file. In a Chapter
7 bankruptcy, an employer would not be notified unless that employer
was also a creditor, or a co-signer or guarantor on a debt.

In Chapter 13 cases, the Chapter 13 plan is funded by deductions
from the employee’s paycheck. The Bankruptcy Court sends a
Salary Deduction Order to the employer, so that the money can be
deducted and forwarded to the Chapter 13 Trustee. In some circumstances,
an employer may not be notified if there is an alternate source
for the Chapter 13 payment, such as military retirement income.

WILL MY BANKRUPTCY BE PRINTED
IN THE NEWSPAPER?

No. Unlike some legal proceedings like foreclosures or name changes,
bankruptcies are not required to be published in the newspaper.
While some high profile bankruptcy cases may receive media attention,
consumer bankruptcies usually do not.

WILL A BANKRUPTCY STOP LAWSUITS
AND GARNISHMENTS PENDING AGAINST ME?

The filing of a bankruptcy stops or “stays” any collection
activity pending against you, even if a lawsuit has been filed,
or a judgment received. It also prevents the garnishment of wages,
and bank accounts. If the purpose of a lawsuit is something other
than to collect a debt or recover property, such as a domestic matter,
then it may not be affected by the filing of a bankruptcy.

IF I AM MARRIED, DOES MY
SPOUSE HAVE TO FILE BANKRUPTCY WITH ME?

There is no legal requirement that a married couple needs to file
a bankruptcy together. However, most attorneys will usually recommend
a joint filing in a situation where both spouses are liable for
debts that would be discharged in a bankruptcy. For example, if
a husband and wife are both liable on a credit card debt, and the
husband files bankruptcy alone, the credit card company will still
be able to pursue the wife for the debt.

WILL I BE ABLE TO OBTAIN
CREDIT AFTER MY BANKRUPTCY IS OVER?

Your ability to obtain credit after the filing of a bankruptcy
will depend upon a variety of factors. In addition to reviewing
your credit report, future lenders will also consider your employment,
income and expenses in considering any applications for credit.
Bankruptcy law does not prohibit you from attempting to obtain credit
after your case is discharged.

ARE THERE OTHER TYPES OF
BANKRUPTCY BESIDES CHAPTER 7 AND CHAPTER 13?

In addition to the types of bankruptcy already discussed, the Bankruptcy
Code also provides special bankruptcy protections for Family Farmers
(Chapter 12) and businesses that wish to reorganize and restructure
their debt (Chapter 11). Your attorney should advise you about your
eligibility to file one of these types of bankruptcy, where applicable.

330 Telfair Street, Augusta, GA • 706-724-8548 • Toll Free 888-228-9035 • Fax 706-724-9727

We are a debt relief agency as defined by Title 11 of the United States Code. We assist consumers in filing for debt relief under the Bankruptcy Code.
This website is for informational purposes only and should not be used as a substitute for legal advice.
Please contact a bankruptcy attorney for advice on how the bankruptcy laws will apply to you and your creditors.

FREQUENTLY ASKED QUESTIONS ABOUT BANKRUPTCY LAW

IF I FILE A PERSONAL BANKRUPTCY, HOW LONG WILL IT REMAIN ON MY CREDIT RECORD?

FREQUENTLY
ASKED QUESTIONS
ABOUT BANKRUPTCY LAW

IF I FILE A PERSONAL BANKRUPTCY,
HOW LONG WILL IT REMAIN ON MY CREDIT RECORD?