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1. If I am married, does my spouse
have to file bankruptcy?
No, however the spouse that does
not file will not receive the benefits of
bankruptcy. In other words, if the non-filing
spouse is jointly liable on certain debts, he
or she will remain liable for those debts if
the filing spouse filed for a Chapter 7
bankruptcy. He or she will also remain
liable for any amount not paid for in the
filing spouse’s Chapter 13 plan. On the
other hand, the non-filing spouse will not
have bankruptcy noted on his or her credit
report.
Therefore, if the debts you owe
are also owed by your spouse, or cosigned
by your spouse, it would be to
your benefit to file a bankruptcy together
as a married couple. If most of
the debts are in your name only, you
may consider filing a bankruptcy as the
only debtor.
2. What if I am unmarried but living
with someone? Can we file a bankruptcy
together?
At the present time, if you are
living together with a significant other
but are unmarried, you cannot file a
bankruptcy together, even if the bills
are in both your names. In this case,
each one of you would have to file
separate bankruptcy petition. A competent
attorney or paralegal can separate
the expenses and budget so that
each of you pay 50% of the day-to-day
living expenses (if both of you share
the expenses) and submit the information
properly to the court.
3. Will bankruptcy stop a wage
garnishment?
Yes, some of the money garnished
from your paycheck may even
be returned to you. It all depends on
how much was garnished and when it
was garnished. If your wages are
currently being garnisheed, a Notification
of Stay pleading need to be filed in
court as well as a letter mailed to the
creditor and your employer to stop the
garnishment after your bankruptcy
petition is filed.
Stopping a wage garnishment is
possible because whomever you owe
that is garnishing your check is now being
paid (or is being discharged) through the
bankruptcy petition you filed. As soon as
the clerk file stamps your bankruptcy
petition, you have immediate protection
under the United States Bankruptcy Court
and every creditor you owe must proceed
through this court to collect anything from
you.
4. How can I immediately stop creditor
harassment?
The filing of a bankruptcy under
Chapter 7 or Chapter 13 will IMMEDIATELY
bring the harassment caused by
creditors to a HALT. Once your bankruptcy
has been filed, creditors are forbidden from
taking action against you or against your
property to collect money you owe them. If
they try to do so, they can be held in
contempt of court. This is the advantage
of the law, administered by the United
States Bankruptcy Court, and provided as
a way to help citizens get “another
chance.” Even if there is a wage garnishment
or other legal proceeding under way,
the filing of a bankruptcy will bring it to a
screeching halt, giving you the opportunity
to take care of your financial affairs in an
orderly and permanent way.
5. What if I owe the IRS back taxes?
How will bankruptcy help me?
Most tax debts cannot be discharged
in a bankruptcy. Trust funds and withholding
taxes you owe, such as sales taxes or
employee withholding obligations can
never be discharged. However, income
and self-employment taxes can be discharged
if they are at least three (3) years
old and the tax returns have been on file
for at least two (2) years.
In situations like this, a bankruptcy
can be a great help in many
ways. The biggest benefit is that you
may be able to reduce the amount of
the tax you owe. In a Debt Adjustment
Plan, you can also stop interest and
penalties on all taxes you owe — even
the ones that are non-dischargable.
This will place you in a situation where
it will be easier to pay your taxes off.
6. How much does it cost to file
bankruptcy?
At the present time, the court will
charge you $200.00 to file a Chapter 7
bankruptcy petition and $185.00 to file
a Chapter 13.
7. When does a bankruptcy take
effect?
When the Clerk of Court receives
your bankruptcy petition and date/time
stamps it, your bankruptcy is immediately
effective. The Court sends notice
of your filing to all of your creditors and
bill collectors generally within 24-48
hours after filing. That is why it is so
vitally important to include complete
addresses and zip codes of all the
people you owe on your bankruptcy
petition. The court will send a copy of
your petition to all these creditors so
they will stop harassing you. If those
addresses are not correct, the creditor
won’t know you filed bankruptcy and
will continue to harass you. It is also
important to list all the collection
agency addresses so they can be
notified as well. Upon receipt of the
notice of your filing, creditors and bills
collectors are prohibited from having
contact with you.
If your should receive any harassing
or annoying creditor calls after filing your
bankruptcy petition, a letter can be mailed
to the creditor which spells out Section 362
of the Bankruptcy Code (Automatic Stay.)
This letter prohibits the creditor from
contacting you again or risk being held in
contempt of court.
8. Am I a “bad” person because I file
bankruptcy?
You are NOT a “bad” person because
you decide to file for bankruptcy.
Back in the old days (pre 1900), if a person
went bankrupt, creditors stepped in, sold
everything the person owned, split the
money between themselves, put the
bankrupt person out in the street and make
a public mockery of them. Therefore, this
is why people who have not kept up with
the times, still feel that bankruptcy is a
“bad” thing to do. But that was over 150
years ago! The economy has changed,
employers have changed, life is more
complicated, interest rates are higher than
they have ever been in history and the
money you make doesn’t reach as far as it
used to just five years ago.
Any one of these factors could cause
a “good” person who was responsible and
financially secure, to suddenly consider
filing bankruptcy. Not one of us is immune
from the world’s problems. So if there
comes a point in your life where you find it
necessary to take advantage of the bankruptcy
law, don’t feel “guilty” about it. In
fact, you should be glad the United States
has set up a governing body to protect
people like you and me. | 
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