FAQ

Will bankruptcy eliminate my debts?

Chapter 7 bankruptcy can eliminate personal liability for most credit card debts, medical expenses, dischargeable income taxes, and some lawsuits.

Can bankruptcy prevent a wage garnishment?

Yes. Upon the filing of a bankruptcy, most creditors are prevented from garnishing wages by the "automatic stay" which acts like an injunction against creditor collection.

Can bankruptcy prevent a repossession?

Yes. In a Chapter 13 debt consolidation, if a creditor repossesses your vehicle without knowledge of the bankruptcy, you may need to provide them with proof of the bankruptcy and proof of insurance to get it back.

Can bankruptcy prevent a foreclosure?

Yes. A Chapter 13 debt consolidation can provide for missed mortgage payments as part of a Chapter 13 plan.

Is bankruptcy better than debt consolidation?

Bankruptcy is the only way to eliminate BOTH the principal AND interest on unsecured debt. Bankruptcy laws were created to give people a "fresh start," and a total elimination of debt is the best way to do that.

How will filing bankruptcy affect my credit?

Bankruptcy is usually listed on your credit report for seven to ten years. It does not mean your credit is destroyed. We have had numerous clients obtain home loans, car loans, refinance loans, and credit cards after filing bankruptcy. The myth that bankruptcy ruins your credit is simply untrue! In fact, you may be solicited IMMEDIATELY after filing bankruptcy by creditors ready to extend MORE credit to you to help you "rebuild" your credit.

How much will it cost?

Be careful!! A cheap price could result in a very expensive mistake. If the appropriate chapter and exemptions are not elected, you could lose all of your assets. If a creditor objects to your discharge, and you do not have proper legal representation, your debt can become "nondischargeable" and you can remain personally liable on the debt. Always have an experienced bankruptcy attorney file your case. Do NOT let a cheap price trick you into making a costly and expensive decision that you will regret for many years.

The cost of a bankruptcy should always depend on the number of creditors, the value of the assets, the type of creditors, the amount of your debt, and whether you have any contested issues that require bankruptcy court intervention. Any "blind" price quote without investigating these factors is an irresponsible guess and should call into question the competence and credibility of the company making the quote.

American Debt Relief offers a free initial consultation where we examine these factors and will be glad to quote you an attorney fee after analyzing your entire financial picture.

Do I have to go to court?

Probably not. All bankruptcy cases have an informal hearing conducted by a trustee (not a judge) called the "meeting of creditors." At the meeting of creditors, the trustee asks you administrative questions about your case under oath. The hearing usually lasts about 5-7 minutes after your case is called. Chapter 7 cases rarely require a visit to bankruptcy court.

How long does the process take?

The meeting of creditors in Chapter 7 cases usually occurs within 40 days from the date your bankruptcy is filed. Chapter 13 cases are usually heard within 45 days. In Chapter 7 cases, after your meeting of creditors, creditors are given approximately 60 days to object to your discharge. If no objection is filed, you will usually receive a discharge soon after the 60 days.