Bankruptcy: Most Frequently Asked Questions

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BankruptcyMost Frequently Asked Questions
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Bankruptcy
Each year, more and more Americans find
themselves overwhelmed by debt, interest payments
on borrowed funds, and everyday
expenses. Consumers have options when it comes
to getting out of debt. However, when they have
exhausted all of those options, they may be
forced to turn to bankruptcy as a final resort.
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What is Bankruptcy?

• Bankruptcy is a legal process to relieve
  financial stress when an individual or company
  has more debt than they are reasonably capable of
  paying.
• Depending on the type and amount of the debts,
  some can be erased completely. Others are rolled
  into a modified payment plan.

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What Debts Can Be Resolved?

• Debts that are not eligible for bankruptcy
  include, but are not limited to
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• Child support and alimony payments
• Federal income tax liabilities
• Federal student loans
• Wages owed to employees
• Debts that are due to DUIs, fraud cases, or other
  malicious acts
• Debts that were not discharged in a previous
  bankruptcy

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Are There Different Types of Bankruptcy?

• There are several types of bankruptcy filings
• Chapter 7
• Chapter 11
• Chapter 12
• Chapter 13

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What is the Most Common Type?

• The most common type of bankruptcy used by
  consumers is Chapter 7. In 2010, a total of
  1,139,601 Chapter 7 cases were filed. Businesses
  filed 39,485 of those and individuals (or
  families) filed the remaining 1,100,116.
• Chapter 7 eliminates all debts eligible for
  bankruptcy, and in return, the consumer must
  forfeit most assets. These are sold and the
  proceeds used to pay off creditors.

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Can Bankruptcy Save My Home?

• The filing of bankruptcy triggers the automatic
  stay which stops all creditors from any action to
  collect their claim including foreclosure.  
• Through Chapter 7 bankruptcy, consumers are often
  able to eliminate enough other debt to qualify
  for a modification of their mortgage, thus saving
  their home.

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Is It Possible to Obtain an Auto Loan After
Bankruptcy?

• Absolutely! Many lenders now offer special
  programs for consumers whove faced financial
  hurdles. They realize that a consumer who has
  filed a Chapter 7 bankruptcy case is actually a
  better credit risk than a consumer sitting with
  overwhelming debt.

In fact, we have a relationship with a local car
dealership that places virtually all of our
clients in late model cars after their bankruptcy
cases are filed.
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Erin B. Shank, P.C. Can Help

• The Law Firm of Erin B. Shank is devoted
  exclusively to handling bankruptcy, debt
  consolidation, tax debt and foreclosure cases.
  Erin is a proud member of the National
  Association of Consumer Bankruptcy Attorneys and
  co-chair for the state of Texas.
• If youre struggling with debt, please call me to
  set up a free consultation. Well take about 45
  minutes to discuss your situation, explore your
  options, and choose a strategy that is right for
  you.