Should I file for bankruptcy, and can I get some general information about it? 18 Answers as of August 13, 2012

I am 26, a student who will be done in about a year, and do not have a large amount of money currently. I really do not have all that much outstanding debt. Most of my debt is small amounts that I know I can (and am) paying off. However, I have one credit card debt that is $13,000. I am barely holding them off from submitting a judgement against me by paying 20 dollars a month. I am hoping that I can finish school, get a good job, and settle with them before they submit a judgement. My questions: 1) Do people file for bankruptcy even if they are not in a large, large amount of debt? 2) If the creditor does file a judgement against me, can they come and take my property to pay the debt, such as my car, computer, etc? The car is in my name but I make payments on it and have signed an MPN for the car payments. 3. If I do file for bankruptcy, what exactly does that mean? Is all of my debt gone? I heard that even if I do file, I still have to pay a certain amount of money to the creditors, is that true? And if I file for bankruptcy, does that mean they can can come take my car, computer, and other personal items to pay my debt?

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Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
1. yes, happens all the time 2. Generally, no. Most personal property is "exempt" from judgement levy. 3. All your debts must be listed. The student loan debt will be discharged. It is not likely they will take the car, assuming it has little or no equity.
Answer Applies to: California
Replied: 8/13/2012
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
If you qualify for bankruptcy, which it sounds like you should, all of your unsecured debt will be gone, except student loans. You should be able to keep your car and other assets. There is no minimum amount of debt and in chapter 7 you will not have to pay any of your credit card debt back. It is rare that a judgment creditor will do anything other than freeze your bank account and garnish any salary.
Answer Applies to: New York
Replied: 6/26/2012
Dan Wilson Bankruptcy
Dan Wilson Bankruptcy | Dan Wilson
1. There is no set amount of debt for filing BK. I ask clients this question: Is there a reasonable chance you will be able to pay off this debt within.
Answer Applies to: Colorado
Replied: 6/26/2012
Norman Linder Hull, P.A. | Norman L. Hull
Your question requires an answer that would be much too long for this service. Please contact a bankruptcy lawyer. Avoid petition preparers as they cannot legally answer your questions.
Answer Applies to: Florida
Replied: 6/26/2012
Alvin Lundgren | Alvin Lundgren
You can file for any amount, however, you should consider avoiding as long as you can, because your debt is not large. Also a bankruptcy may affect your job potential.
Answer Applies to: Utah
Replied: 6/26/2012
    Weber & Phillips, P.A.
    Weber & Phillips, P.A. | John G. Phillips
    Yes, people do file bankruptcy over relatively "small" amounts of debt. Sometimes its not the amount of the overall debt but what is required of you in terms of monthly payments that creates the need to file a bankruptcy. Your student loans would not be discharged in bankruptcy, but credit card debt, medical bills and such would be. It sounds like there may still be an opportunity for you not to file, but you should go ahead and consult with a bankruptcy attorney, many of which offer free or greatly discounted initial consultations, so that you are ready if you need to file.
    Answer Applies to: Arkansas
    Replied: 6/25/2012
    Charles Schneider, P.C.
    Charles Schneider, P.C. | Charles J. Schneider
    Most attorneys including myself offer a free initial consultation. I suggest you take advantage of it. Your questions are too numerous and without sufficient detail that needs a dialogue.
    Answer Applies to: Michigan
    Replied: 6/25/2012
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    There is no minimum amount of debt that must be owed to qualify for bankruptcy. However, one should consider whether it is worth having bankruptcy on one's credit report for 10 years. A judgment also stays on the record for 10 years and it can be renewed for an additional 10 years. One a creditor receives a judgment they can use all the enforcement options available under state law. The most typical ways judgment creditors enforce their debt is wage garnishment and levies on bank accounts. Persona assets, such as household goods are exempt. There is also an exemption for about $3000 in equity in a vehicle. If your vehicle is worth a lot of money beyond the exemption some creditors may choose to levy and sell the vehicle. The lender must be paid in full as well as your exemption. You get the exempt amount and the creditor gets the excess. If there is no excess there will be no sale of the vehicle. Generally, judgment creditors don't exercise their right to sell vehicles, particularly when their is a lender that has a lien on it. Not all debts are discharged in bankruptcy. Some of these debts include most taxes, student loans and child and spousal support. If you are file a bankruptcy there is no amount paid to creditors if there are not non-exempt assets in the bankruptcy estate. You can do a payment plan in chapter 13 if you have regular income and meet other requirements. Consult with a lawyer to discuss the specific facts of your case.
    Answer Applies to: California
    Replied: 6/25/2012
    The Law Offices of Kristy Qiu
    The Law Offices of Kristy Qiu | Mengjun Qiu
    1. Yes, people do it all the time. They do it primarily to avoid garnishment of wages, seizure of assets, and to just feel better because they're tired of dealing with creditors and collection agencies. 2. Yes, they can take those assets away as they're not exempt assets. They might not be able to take your car if there is no equity. When you find a job, they can also start garnishing your wages. 3. If you file for chapter 7, all your unsecured debts will be wiped out, with a few exceptions listed on code section 523 of the bankruptcy code. Also, student loans are difficult, if not impossible to discharge. The bankruptcy where you'll have to make payments is chapter 13, you won't have to worry about it if you qualify for chapter 7.
    Answer Applies to: Florida
    Replied: 6/25/2012
    Connaghan Newberry Law Firm
    Connaghan Newberry Law Firm | Tara D. Newberry
    The questions you have raised, are topics that are generally covered during an initial consultation. Most attorneys, including myself, offer a free initial consultation to discuss how bankruptcy works and what benefits and burdens it provides. Given how many questions you have, I really think you need to meet with a bankruptcy attorney, a lot of the answers to your questions depend upon financial information that an attorney would need to review prior to answering. On a general basis, if you are eligible for chapter 7, most debts you owe will be discharged and you will not have to pay any money to your creditors. When you file for bankruptcy in Nevada, an attorney will apply exemptions based on state law to your property, such as your car, your household belongings, your computer, etc., and you will be able to keep all exempt property through the bankruptcy. With regard to your concern about a judgment. If you are not working and do not own any real estate, you may be "judgment proof", which means there is nothing that the creditor can take from you, lien against or garnish in order to collect on the judgment. Most often, creditors obtain judgments and will either file a lien against real estate, or seek a garnishment order to take up to 25% of your net wages. Since you indicate that you are still in college, there isn't much that the creditor could do at this point, but you do need to consider clearing up your debt situation before you begin working. There may be a way for you to negotiate with the one creditor to avoid a judgment and to avoid filing bankruptcy, you should meet with a qualified bankruptcy attorney who can fully assess your individual situation in order and advise you on your options.
    Answer Applies to: Nevada
    Replied: 6/25/2012
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    Filing bankruptcy is a Major step and should not be undertaken without thought and counsel. I would suggest not undertaking it unless absolutely necessary, yes it should cause you to be making installment payments and living on a government approved budget for years. As for amount, in my estimation the amounts you are speaking to are insufficient. You are generally not allowed to to play the card again for ten years. I recommend engaging an attorney to help you reach agreements with your creditors to all you to work this our short of bankruptcy.
    Answer Applies to: Michigan
    Replied: 6/25/2012
    Steven Alpers | Steven Alpers
    Some of your answer depends on whether you file a chapter 7 or 13. You can probably protect your property with the exemptions provided for you by California law. You get to claim about $22,000 plus some specific additional objections. You can combine two or more to protect your property. You only have to protect the equity in the property. There may be no equity in your car because of your loan balance versus its estimated sale price may be zero or less. You only have to pay some creditors if you file a chapter 13 as a wage earner. You must earn over $44,900.00 per year now before the court will force you to file a chapter 13.
    Answer Applies to: California
    Replied: 6/25/2012
    Olson Law Firm | Edward M Olson
    There are asset and income requirements to qualify for bankruptcy. It sounds like you may qualify. The bigger issue is: why file? You will be wiping out a small amount of debt and damaging your credit score for a long time. In addition, some jobs, like bank teller, cannot be had by persons who have filed a bankruptcy. The better strategy is probably to get the job and then negotiate a settlement with this one creditor.
    Answer Applies to: Michigan
    Replied: 6/25/2012
    Diefer Law Group, P.C.
    Diefer Law Group, P.C. | Abel Fernandez
    This is not a lot of debt. You could file for bankruptcy if you needed to but to be honest not a lot of people file for bankruptcy for this amount of debt.
    Answer Applies to: California
    Replied: 6/25/2012
    R. Jason de Groot, P.A
    R. Jason de Groot, P.A | R. Jason de Groot
    Yes, some people file bankruptcy over relatively small debt as compared to others. A creditor with a judgment would have to pay the sheriff a cost prohibitive sum in order to seize property. Bankruptcy will discharge all debt, with the exception of student loans and income taxes within the last 3 years, and some other debts. The cannot come get anything from you when you file bankruptcy, a federal automatic stay goes into effect when you file and creditors cannot proceed with any state court action or file suit, without getting approval from the bankruptcy judge.
    Answer Applies to: Florida
    Replied: 6/25/2012
    The Smalley Law Firm, LLC | Cary Smalley
    You can file for bankruptcy regardless of the amount of debt you have. A credit card is generally not a secured debt so they cannot come after your property if they obtain a judgment against you. However, they can attempt to garnish your wages or bank account. If you file for bankruptcy generally all of your unsecured debts (such as credit cards and medical bills) will be discharged except for student loans, some tax liens and domestic support obligations. Whether you have to pay anything to your creditors after filing bankruptcy depends on what chapter you file. Chapter 7 discharges your debts without any repayment, while Chapter 13 involves a 3-5 year repayment plan. Generally when filing for bankruptcy most of your assets are exempt. I suggest you talk with a bankruptcy attorney to discuss the specific details of your situation.
    Answer Applies to: Kansas
    Replied: 6/25/2012
    Moore Taylor Law Firm, P.A.
    Moore Taylor Law Firm, P.A. | Jane Downey
    You should consult with a certified bankruptcy specialist. There are exemptions, which are things creditors cannot take from you even if they have a judgment. Google 15-41-30 for more information. People file bankruptcy over all levels of debt. If you just have 1 card, I would consider talking to the creditor about your options.
    Answer Applies to: South Carolina
    Replied: 6/25/2012
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