March 2, 2007, Newsletter Issue #2: Some Important Bankruptcy Information

Tip of the Week

Legal Helpers Tip: Some basic bankruptcy information you should know if you are considering the bankruptcy option:

Your current creditors are prohibited from continuing collection activity once you have filed a petition with the bankruptcy court. In a Chapter 7 action, you’ll be required to liquidate all of your non-exempt assets to generate as much cash as possible for your creditors. Your spouse may or may not be affected. If he/she is also legally obligated to your creditors, your spouse will normally be included in the bankruptcy action. Should the debts you wish to erase be yours alone, your spouse need not be included in the bankruptcy. Bankruptcies are public records and the results will remain on your credit report for up to ten years. Therefore, your bankruptcy information may be accessed by other parties in the future. Your employer can not terminate you for filing bankruptcy per section 525 of the U.S. code. Per federal and many state laws you’ll be allowed to keep a portion of your assets in a Chapter 7 bankruptcy. Should you choose to file under Chapter 13, you will probably have the ability to keep most of your current assets. If you have filed a Chapter 7 bankruptcy in the past, you are not allowed to file another until eight years have passed since your last discharge. After liquidation of your assets and dispersing the proceeds to your creditors, all remaining balances will be permanently erased after your discharge.

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