Are there any alternatives to filing bankruptcy?

Yes, if the debtor's financial problems are only temporary, they may want to simply ask creditors to accept lower payments or that payments be scheduled over a longer period of time. Creditors may be receptive to these ideas if the debtor has been a prompt payer in the past, or if bankruptcy is mentioned, since creditors know that once a bankruptcy proceeding is initiated they will probably collect only a portion of what is owed. Also, creditors may wish to avoid the difficulties of a court proceeding to collect on the debt, which can be time-consuming and expensive.

Consumer credit counselors can also help creditors work out a payment plan. Some of these advisors work for non-profit agencies, so they charge no fees.

Are student loans discharged in a bankruptcy proceeding?

No, educational loans guaranteed by the United States Government are generally not discharged by a Chapter 7 or Chapter 13 bankruptcy. However, if the court finds that paying off the loan will impose an undue hardship on the debtor and his/her dependents, they may discharge the loan.

What effect does a bankruptcy filing have on the collection of alimony and child support?

Although filing bankruptcy stops, or "stays," all efforts to collect debts, the Bankruptcy Code excludes actions to collect child support or spousal maintenance from the stay. In other words, even at the conclusion of the bankruptcy proceeding, these continue to be on going obligations.

Does a bankruptcy eliminate all debts?

In a Chapter 13 the discharge affects only those debts provided for by the plan. Additional exceptions include, spousal and child support, educational loans, drunk driving liabilities, criminal fines and restitution and certain long-term obligations, such as home mortgages, that extend beyond the term of the plan.

In a Chapter 7 the following debts are NOT discharged, debts or creditors not listed on the schedules filed at the outset of the case, most student loans, recent federal, state and local taxes, child and spousal support, government-imposed restitution, fines or penalties, drunk driving liabilities and debts not discharged in a previous bankruptcy because of the debtor's fraud.

In addition, the following debts are not discharged if the creditor objects during the case and proves that the debt fits one of these categories; debts from fraud, luxury goods or services incurred within sixty (60) days before filing and certain cash advances taken within sixty (60) days after filing, debts from wilful and malicious acts, embezzlement, larceny or breach of fiduciary duty or debts from a divorce settlement agreement or court decree.

Will I lose my home by filing bankruptcy?

Although that is possible in some cases, loss of the home need not always result from a bankruptcy filing. If you are behind on your mortgage payments, the home could be lost.

How long is bankruptcy and other credit information included on my credit report?

A consumer credit report may include Chapter 7 and Chapter 13 bankruptcy information for ten (10) years from the time the case is filed. One major consumer credit reporting agency is said to remove Chapter 13 information after only seven (7) years, but it is not legally required to do so.