Frequently Asked Questions About Bankruptcy

 
Can I file a bankruptcy case without an attorney?
          You are permitted by law to file a bankruptcy petition without the assistance of an attorney.  Additionally, “bankruptcy petition preparers” charge lesser fees than attorneys and can assist you with completing the forms necessary to file a bankruptcy case.
 
          However, properly drafting a bankruptcy petition, schedules and related documents is much more challenging than many people believe.  Petition preparers cannot provide legal advice regarding the exemptions necessary to protect your property, nor can they draft the documents needed to avoid liens or lower your car payments. 
 
          It is certainly to your advantage to have an experienced bankruptcy practitioner, knowledgeable in the complex rules of the bankruptcy court, fighting on your side. 
 
When will telephone calls from debt collectors stop?
          As soon as your bankruptcy petition is filed, all debt collectors who receive notice of your case are automatically stayed or stopped from continuing actions intended to collect your outstanding debt.  Generally this notice will be received within two or three days of filing your case.  This stay applies to not only debt collectors but to lawsuits, vehicle repossessions and home foreclosures.  Additionally, creditors will only be able to contact your attorney – and not you – for the duration of your bankruptcy case and most of your debts will no longer exist once your case is concluded. 
 
          Even if you are late on payments toward a secured debt (i.e., a home mortgage or automobile loan) your creditor cannot continue its efforts to foreclose or repossess without first asking permission of the bankruptcy court.  Your bankruptcy attorney will then have the ability to oppose the creditor’s request and/or propose a reasonable repayment plan for any arrearage before drastic measures can be taken. 
 
          Regardless of whether you file for bankruptcy relief or not, your inability to pay a debt does not give a creditor the right to harass you.  You are protected by both federal (Fair Debt Collection Practices Act) and New Hampshire state law (Unreasonable and Deceptive Acts and Practices) from unreasonable collection activities.  For more information you should review the Federal Trade Commission’s website at  www.ftc.gov/bcp/edu/pubs/consumer or contact your attorney to discuss your rights. 
 
Will I have to give up any of my property during the bankruptcy?
          While some debtors are required to sell or turn over certain property, most people receive their discharge from bankruptcy without losing any property at all.  All bankruptcy filers are afforded the opportunity to use “exemptions” in order to protect certain assets they own at the time of filing bankruptcy.  These exemptions apply to everything from real estate and automobiles to clothing and retirement accounts.
 
          Both New Hampshire state law and the federal law offer different sets of exemptions, one of which might be more advantageous to you than another.  Generally, these exemptions are sufficient to protect your assets.  Honest debtors who do not conceal assets from the court and who do not own excessively valuable assets are often fully protected by the exemptions.  Your attorney can be very helpful in determining what exemptions apply to your case. 
 
What are the credit counseling and/or financial management courses?
          Since Congress overhauled the bankruptcy law in 2005, all consumer debtors are now required to attend two counseling sessions to obtain a bankruptcy discharge.
 
          The first counseling session is known as “credit counseling” and must occur within 180 days before the filing your bankruptcy petition.  Anyone considering filing bankruptcy in the near future is encouraged to complete this session as the certificate you receive upon completion is valid for 180 days and your attorney cannot file your case without this certificate. 
 
          The second counseling session is known as “financial management” or “debtor education” and is taken sometime after the filing of the case but before the entry of the discharge.  
 
          Both sessions can be completed over the internet or telephone.  Payment is made directly to whichever agency you chose.  A list of agencies approved to offer credit counseling to NH citizens can be found at:
 
          For those who would rather attend the session in-person, the CCC of NH is located on Loudon Road in Concord, NH and can be reached toll-free at 1-800-327-6778 to determine when classes are available.
 
How does filing bankruptcy affect my credit score?
          Unfortunately there is no definitive answer to this question.  Your credit score is determined by multiple factors, including your debt-to-credit ratio, whether you pay your bills on-time, how long you have had a credit history, recently obtained credit and the type of credit you borrow (i.e., mortgage, student loans, credit cards, etc.).
 
          While a bankruptcy can remain on your credit report for up to ten years, certain other negative information remains on your credit report for up to seven years, even just one missed monthly payment.
 
          Most people considering filing for bankruptcy are having some credit difficulties.  You will be able to being rebuilding your credit immediately after your bankruptcy case by using new lines of credit and paying them in full.  You may not receive the lowest interest rates soon after filing, but if you pay your bills in full each month you can rebuild your credit much sooner than you think.
 
          Anyone considering filing for bankruptcy should visit either www.freecreditreport.com or www.annualcreditreport.com to obtain a free and current credit report.  Though you will not receive your credit score without paying, the information contained in your credit report will be useful to both you and your attorney.  You can only obtain the report for free if you have not already done so in the past twelve months.
 
What are the advantages of a Chapter 13 bankruptcy case?
 
           Chapter 13 bankruptcy filings provide a number of tools to debtors to provide them with a fresh start while offering advantages that do not exist in Chapter 7 cases.  For instance, "lien stripping" allows debtors to essentially strip off second (and other junior) mortgages against real property valued at less than the amount owed on the senior mortgage.  It also allows you to pay certain debts (including arrears and past due amounts on mortgages, vehicle loans and other secured debt) over time (up to 60 months) without penalty or interest.  Similarly, certain non-dischargeable tax debts can be paid without penalty in installments as well.  Even undersecured vehicle loans, if purchased at the right time, can be "crammed down" to lessen you payment to your vehicle's actual value rather than the amount due on your loan. 
 
For more information, please contact us at (603) 643-1313 or fisher@mbfisherlaw.com.