square The Merna Law Group: Bankruptcy Questions and Answers
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Bankruptcy Q & A

Monopoly board - Virginia Beach, Newport News, Richmond bankruptcy
I heard you can’t file bankruptcy any longer to get rid of debt. Instead, you have to pay everyone back.
No, this is not correct.  In 2005, there were some significant changes to the bankruptcy laws.  However, most of these changes only effected individuals in high income brackets.  You can still eliminate your unsecured debt through Chapter 7.
My friend told me that even if I file bankruptcy I will still have to pay the debt back in the future. Is this true?
No.  This is not true.  Some debts such as student loans, fines, some taxes are not eliminated by bankruptcy.  However, unsecured debt is permanently eliminated in Chapter 7 and in some case Chapter 13.  Talk to your attorney about any concerns to insure your debt will be eliminated.
My mother said that someone will come from the court to sell our furniture and belongs. Will I lose everything?
No.  This is not accurate.  A good attorney will be able to properly protect all of your property.  In some cases, where you have value or equity that can not be protected your attorney can help you resolve this and/or discuss other options.
Does it matter which attorney I choose to file bankruptcy with?
It can.  Most attorneys who practice bankruptcy have specialized in the field for a number of years.  During your consultation ask the attorney how many years they have practiced bankruptcy.

Here are more questions and answers from the experts at The Merna Law Group.

Chapter 13 Bankruptcy: So here is the thing. I am planning on filing chp 13 bankruptcy since I am behind on the mortgage and the bank is not willing to work out a plan. So my concern is the relief from stay. Does equity play a role in the lift. I have insurance and it is paid through the mortgage payments. If I pay all payments that come due after filing chp 13, do I need to worry about relief from stay. I do not have equity in the home since it is underwater but I do wanted to pay what I am behind over the next 60 months and pay the current payments as well? Am I worrying too much. I can pay 100 percent of my plan and also my current mortgage. Any advice?
As it has been suggested by the other attorneys, so long as you maintain your post-petition mortgage payments and maintain your plan, the automatic stay will not be lifted. The benefit of filing a Chapter 13 is that you have the right to reorganize your debts and use the plan to come current on past payments. As mortgage arrears are required to be paid in full through the plan and equity in real property really only comes into consideration in determining the percentage dividend to unsecured creditors, you should not be concerned about equity considerations with regards to the automatic stay.
I typically don’t advise debtors to attempt filing any chapter of bankruptcy pro se, certainly not chapter 13 due to the complexities it can involve in drafting a confirmable plan. I would advise speaking with an experienced attorney who can advise you as to the best way for you to move forward.No, this is not correct.  In 2005, there were some significant changes to the bankruptcy laws.  However, most of these changes only effected individuals in high income brackets.  You can still eliminate your unsecured debt through Chapter 7.
Will my business be affected by me filing a personal chapter 7?: I am part owner of an s-corp (3 partners). We are in the insurance business, we have no physical assets, but we do have a monthly residual steam. I personally owe about $70,000 in credit card debt, and there is no way I can continue paying these cards. I figure with what I am making right now, and what I have in savings, I won't even be able to make minimum payments in about 3-4 months. My question is... Will my business be affected by me filing for chapter 7? What about my partners? I really don't even want to tell them, but I have a feeling they are going to find out one way or the other....
The answer is that it depends. In general, any asset that you own must be disclosed and could potentially be an asset to be liquidated by the Trustee. That being said, each state has their own set of exemptions of property which may be protected during the bankruptcy. The most important determination to make before moving forward with a personal bankruptcy is to value your share in the s-corp. If the assets (inventory, equipment, accounts, etc.) outweigh any debts which the corporation may be liable for, then the Trustee potentially could sell or assume your interest in the business if such interest is over and above your state’s allowable exemption amounts.

I would highly advise setting a consultation with an experienced bankruptcy attorney in your area who can help you determine whether there is a risk to your business interest in the filing of a Chapter 7 bankruptcy.

Does divorce decree overwrite the separation agreement?: My wife and I were separated in 2010 and the divorce was final in 2011. We have two children. Our separation agreement stated that we each claim one child on our tax return. There is no mention of dependent deductions in the final divorce decree. I filed my taxes this year per the agreement and it was rejected because my ex wife claimed both children. Is she able to do this? Isn't the separation agreement binding? This now has forced me to file single with no child credits and has doubled my tax liability. She even sent me a letter stating that she had only claimed one child per our agreement. What recourse do I have in this matter?
The short answer to your question is that if your Separation Agreement and accompanying Final Decree were drafted carefully, you do have recourse against your former spouse for not complying with the terms of your prior agreement. The terms of your separation agreement would have been incorporated directly into the Final Decree, thereby making her violation as to the dependent deductions a violation of a court order. I would advise seeking counsel to discuss your options for moving forward with a Show Cause in Circuit Court against your former spouse. Best of luck.


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