Bankruptcy FAQ

Following is a list of questions asked frequently by clients of the Law Offices of Carolyn Patrick. If you have a question not answered here, or in the FAQ menu above, please contact us with your question.

How much do I have to owe in order to file bankruptcy?

The law sets no minimum amount a person must owe in order to file bankruptcy. This is entirely up to you. Review your finances and determine if you are able to pay your debt in a reasonable amount of time. If not, you may want to consider bankruptcy.

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What are the drawbacks to filing bankruptcy?

A Chapter 7 bankruptcy will be on your credit report for 10 years. A Chapter 13 bankruptcy will be on your credit report for 7 years. You can file a Chapter 7 only once every six years.

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How much does it cost?

Attorney fees for most Chapter 7 bankruptcy filings are $1,400. In addition, the Bankruptcy Court charges a filing fee of $274. So in most cases a Chapter 7 filing will cost a total of $1,674. The Chapter 13 fee is $2,000, with a filing fee of $189.

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Will I Have to Go to Court?

In most bankruptcy cases, you only have to go to a proceeding called the "meeting of creditors" to meet with the bankruptcy trustee (not a judge) and any creditor who chooses come. Most of the time, this meeting will be a short and simple procedure where you are asked a few questions about your bankruptcy forms and your financial situation. Creditors rarely attend this meeting.

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How Does Bankruptcy Affect My Credit?

There is no clear answer to this question. Each person's situation is unique and each lender has their own criteria for making a loan. Unfortunately, if you are behind on your bills, your credit may already be bad. Bankruptcy may not make things any worse. Occasionally, bankruptcy actually helps because once your old debts are wiped out, you are in a better position to pay new bills.

The "sub-prime" market (for loans to people with lease than perfect credit) is very competitive. People who recently completed a bankruptcy can often obtain a car loan or mortgage. However, you can expect to pay higher a higher interest rate and closing costs. Credit cards are generally not available until several years after your bankruptcy.

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Can a Married Person File Bankruptcy Individually?

Yes. If you are married, you may file bankruptcy without your spouse. However, Louisiana is a community property state. Under the community property law, your spouse is liable on your debts incurred during marriage for a family purpose. This is true even if your spouse's name does not appear anywhere on the account and regardless of whether or not your spouse signed anything. For this reason, it is usually recommended that couples intending to divorce file bankruptcy jointly prior to divorce.

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How Long Does the Bankruptcy Process Take?

The entire bankruptcy process typically takes about three months. First, your bankruptcy petition must be filed with the court. Often your petition can be filed within a few days after meeting with your attorney. In emergencies, a petition can sometimes be filed that same day. Your meeting of creditors will be held about four weeks after the filing of your petition, depending on the caseload of the court. You should expect your discharge about ten weeks after your meeting of creditors. Although the bankruptcy process takes several months, creditors are stopped from acting as soon as your petition is filed.

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What Else Should I Know?

Utility services - Public utilities, such as the electric, gas and telephone companies, cannot refuse or cut off service because you have filed bankruptcy. However, the utility can require a deposit for future service and you do have to pay bills for service provided after your bankruptcy petition is filed.
Discrimination - An employer or government agency may not discriminate against you because you have filed bankruptcy.
Driver's license - If you lost your driver's license solely because you couldn't pay damages caused in an auto accident, bankruptcy may allow you to get your license back.
Co-signers - If someone has co-signed a loan with you and you file bankruptcy, the co-signer will have to pay your debt.

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