Bankruptcy Attorney Questions

Find answers to bankruptcy attorney questions:

Q: What are the different types of Bankruptcy?
A: There are four different types:

  • (1) Chapter 7: a liquidation Bankruptcy enabling you to discharge unsecured debts quickly.
  • (2) Chapter 13: a replacement program which lasts from 36 to 60 months in which you make payments. Depending on your situation, you will repay your creditors between 1% and 100% during the 36 to 60 month period.
  • (3) Chapter 11: a reorganization Bankruptcy for wealthy individuals and businesses.
  • (4) Chapter 12: a reorganization Bankruptcy for family farmers.

Q: How much does it cost to file Bankruptcy?
A: It depends on your individual case and the type of Bankruptcy you file. I will discuss this with you during your consultation.

Q: Is the debt that I am discharged from taxable by the IRS?
A: No. Under current income tax laws, discharged debt is not considered taxable.

Q: Are debt settlements considered taxable income?
A: Yes. If you enter into a settlement with a debt collector or credit consolidator, then the settlement is considered taxable income by the IRS.

Q: Will a debtor lose his/her home by filing Bankruptcy?
A: As long as the person filing Bankruptcy follows the Bankruptcy plan submitted to the Court, he/she will keep their home.

Q: Are student loans discharged in a Bankruptcy proceeding?
A: If you are disabled you may be able to discharge your student loans in Bankruptcy.  Typically they are not discharged.

Q: How does Bankruptcy show up on your credit report?
A:  In most cases filing Bankruptcy actually helps your credit score.  By subjecting your negative credit accounts to the Bankruptcy process, you are able to improve your score quickly.  Bankruptcy stays on your credit report for ten years.