Frequently Asked Bankruptcy Questions

By Kenneth Lenz, Board Certified Consumer Bankruptcy Attorney

Q. I see Attorney Lenz has Board Certification in Consumer Bankruptcy. What is it?

A. When an attorney is certified by the American Board of Bankruptcy Certification, it means that he has undergone an extensive examination of his bankruptcy knowledge and litigation experience, and that his skills are recognized by other bankruptcy professionals as highly competent. Only 1% of practicing attorneys are board-certified in consumer bankruptcy.

Q.What is a Chapter 13 Wage Earner's Arrangement?

A. A Wage Earner's Arrangement, also known as Chapter 13 debt reorganization, is an alternative to outright bankruptcy. It is not a loan, nor a debt negotiation, but a solution to consolidate debts into one low monthly payment that you can afford. This is a solution generally approved by the court, regardless of whether creditors like it or not. This typically allows you to keep your home, car, and all other property.

Q. What is a Chapter 7 Straight Bankruptcy?

A. If you are unable to make any meaningful payments to your creditors, you may qualify for straight bankruptcy, known as Chapter 7. Chapter 7 allows you to discharge your debts, which means you will get rid of and do not have to pay back debts, bills and other financial obligations and keep all your property that is exempt under State or Federal law. Creditors can no longer call you, and you might be able to get new credit fast.

Q, What are the Common Misconceptions about Bankruptcy

The most common misconception is that by filing bankruptcy you will never be able to buy a house or car. THIS IS NOT TRUE. There are thousands of FHA and V.A. assumable loans and there are many realtors that specialize in this area. Credit is not a factor. You will be able to establish new credit and start over. The second most common misconception is that you will have to give up all your property for liquidation. For the vast majority of debtors who choose Chapter 7, no assets are liquidated, because they are all claimed exempt. A third common misconception is that you can pick and chose which debts to list in bankruptcy or “to go bankrupt on”. All debts known to you must be listed in your bankruptcy schedules, although certain debts may not be discharged.

Q. What debts are not discharged in bankruptcy?

Government guaranteed or government issued student loans, most taxes, and domestic support obligations (child support and alimony, or court-ordered family support and not discharged .Debts incurred by fraud, or by theft while in a fiduciary (trust) capacity, or which arise from intentional wrongdoing, or from injuries while driving while intoxicated are not discharged. Criminal fines (including tickets) or criminal restitution orders are not discharged.