Bankruptcy Frequently Asked Questions

Understanding Key Bankruptcy Terms (FAQs)

From The Law Offices of Kathryn L. Johnson in Tucson

Are Student Loans Dischargeable?

Typically, the answer is no.  It is difficult to demonstrate the requirements to show an undue hardship.

However, there may be options outside of a bankruptcy that can help you get back on track, including income driven repayment programs and forgiveness programs if you have federal student loans.

Defining the Length of Time that the Bankruptcy Process Takes

While no two bankruptcies are exactly alike a typical chapter 7 bankruptcy can span a time period of about four months from the point of filing to the final discharge. Conversely, a typical chapter 13 bankruptcy can take anywhere from 36 to 60 months from the point of filing to the completion of the chapter 13 plan. This also ultimately leads to the final discharge of debts, assuming that the plan was satisfied as intended.

Defining the Automatic Stay

A properly filed bankruptcy petition generally guarantees an individual an automatic stay of all debts. This in effect requires creditors to immediately cease and desist all collection activities. Debt collectors can be sanctioned by bankruptcy courts for not adhering to strict automatic stay regulations.

Defining What Property is Protected

Individuals who have lived in Arizona for two years or more prior to filing bankruptcy can typically protect their property under Arizona exemption laws. In other cases, individuals may find protection under various state and federal exemption laws.

Laws Regarding the Transfer of Property when Filing Bankruptcy

This can be a touchy subject and can result in bankruptcy fraud charges being filed. If property is inadvertently transferred a trustee can reverse a transaction and recover that property.

Laws Regarding Owning a Business and Filing Bankruptcy

This is a perfect example of where an individual should consult with a qualified bankruptcy attorney to determine which form of bankruptcy is best. Depending on if a business is defined as a sole proprietor or a corporation will help to decide whether Chapter 7 or Chapter 13 bankruptcy is the best option.

Laws Regarding Tax Discharge

In some cases taxes that are overdue by more than 3 years may be dischargeable, while other types of taxes are generally not dischargeable under Chapter 7 or Chapter 13 bankruptcy.

Laws Regarding Child Support and Utility Bills

Simply stated child-support and spousal maintenance are in no way dischargeable under bankruptcy laws, however, utility bills are generally dischargeable.

Other points to consider with regard to filing for bankruptcy include knowing that your employer will generally not be notified unless he or she is owed money. In addition, all debts including credit card debt should always be listed when filing for bankruptcy. It is also important to note that in some cases a tax refund may become subject to a bankruptcy and included by a trustee. Those considering bankruptcy should know that every case is unique and that by enlisting the services of a skilled and qualified attorney such as Kathy Johnson you will be more likely to come out of your bankruptcy in a successful and positive way.