Garvey Tirelli & Cushner

Common Bankruptcy Questions and Answers

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Here are what we believe to be the 11 most common questions and concerns many people have regarding Personal Bankruptcy. If you have a question and don’t see the answer here feel free to submit it to us on our Contact Us page or send it to our direct email at We promise to respond in a timely fashion!
1. Will I lose anything (or everything) if I file for personal bankruptcy?

Generally, you may file a bankruptcy and retain all of your personal belongings, including your house, your car and all household goods. Again the object of the government via the Bankruptcy Courts protecting you is to ensure you can survive and get a fresh start. It is the job of your Bankruptcy Lawyer to make sure that all of your personal belongings are protected and advise you of any potential “red flags” before you file.
When the assigned Trustee (a person acting as the arm of the Court) finds it appropriate to sell assets it is for the purpose of paying back some of the debt. In many cases, this is just not an option. For example, if you owe more on your car than the car is worth, the bankruptcy court will not sell your car, because after sale there would be no money left over to make a distribution to your creditors. The same goes for your home and personal property. Even if your property is worth more than what is owed on it, usually we can use the permitted bankruptcy exemptions to protect these items. Please bear in mind that the amount exempted may vary from state to state.

You may be more at risk of losing property if you don't file bankruptcy, as creditors can sue you and attach your bank accounts, garnish your wages and attach and seize your property. As a result, you may miss rent, mortgage or car payments, making it difficult to provide even your most basic necessities.
2. When do I get relief from creditor harassment?

We love this question – Immediately! As soon as you retain our office, you can start to refer all future creditor calls to your bankruptcy attorney. Thereafter, once you actually file the petition with the court, all collection actions against you must stop until the creditor seeks its own relief from the Bankruptcy Court to continue to pursue its actions. In most cases, the permission is not granted but there are exceptions which will be determined on a case by case basis.
Just imagine…no more credit card payments and no more harassment immediately upon retaining our office.
3. Does my spouse have to file jointly with me?

No! There is no requirement to force a spouse to file for Bankruptcy Protection. We often file joint petitions which include both spouses, however, our approach is always to see if we cant avoid making both file if it isn’t necessary.
If all or most of the debts are in your name only, your spouse may not have to file. Creditors usually cannot pursue a non-filing spouse, unless he or she is legally a co-debtor on the debt. Additionally, the bankruptcy should not be reflected on the non-filing spouse's credit report. The law does vary, however, from state to state so make sure you ask your bankruptcy attorney about whether or not your spouse has to file.
4. Who knows about my personal bankruptcy case?

The only parties that receive notice of the bankruptcy are your creditors, the Bankruptcy Court and the IRS. Generally, the bankruptcy will have no effect whatsoever on your taxes. Your employer will not be notified of the bankruptcy unless your employer is also a creditor. I think it is also worth mentioning that in some cases, as an employee you might have signed an authorization permitting an employer to check your credit report. If you did, they may at some point discover you filed for Bankruptcy Protection. I advise my clients to find out before they file whether or not they signed such authorization so they can avoid any surprises down the road.
Your Bankruptcy is public record, so anyone who wants to find out could determine that you had filed. Generally, however, only you, your creditors and the IRS will know about the bankruptcy.
5. Will I be able to rent after I file personal bankruptcy?

There were over 1 million bankruptcies filed in the United States last year alone. Common sense will tell you that these people are not all living on the street. If you are presently renting a home or apartment, usually your present landlord will renew your lease without running an updated credit report, and will have no knowledge that you even filed a bankruptcy.
If you are applying for a new lease, there could be some slight difficulties that can easily be overcome. We have found that larger leasing companies usually have stricter policies regarding leasing to applicants with blemished credit. Remember that it is the blemished credit report, not necessarily the bankruptcy that is reflecting poorly on your application. Also, with no outstanding debt, you may appear to be a better risk than other applicants who have outstanding debt and blemished credit reports. We find that a good faith gesture, such as offering an extra month security deposit, may be enough for a potential landlord to overcome her concerns about your blemished credit.
6. How do I know if I should file personal bankruptcy?

*Are you calling because you are being sued?? If you are being sued, and you own a home, we strongly urge you to speak with a representative immediately about filing a bankruptcy. A bankruptcy will stop a lawsuit immediately and prevent your creditors from placing a lien on your home or garnishing your hard-earned wages.
*Is your home being foreclosed or is your car about to be repossessed? If it is, very often bankruptcy may prevent the foreclosure action or repossession from proceeding and allow you to consolidate your mortgage arrears or automobile balance and make payments on those debts over time through a payment plan designed by us with your help. If your house is being foreclosed or your car is about to be repossessed, Chapter 7 bankruptcy may not be an option. Chapter 13 bankruptcy may save your house and your car.
*Do credit cards or medical bills have you so deep in debt that it is hard for you to save for the future? If you are only paying the minimum payment on the credit card bills from month to month (generally from two to three percent of the outstanding balance), and the interest rate is only 15%, you will take about 20 years to pay off a $10,000 debt. Do you really want to be in the same financial situation in twenty years? Chapter 7 bankruptcy can provide you with a fresh start that you are entitled to under the law and get you out of debt NOW.
7. Is filing personal bankruptcy immoral or does it make me a bad person?

Of Course Not!!!Get over it, you read too many articles from debt collectors and people trying to convince you to consolidate your debts and pay more fees on top!
Now...Repeat after me:

Most people who file for Bankruptcy Protection do so because a series of circumstances have brought them to the point that they can no longer live under the heavy burden of their debts.
Everyone is entitled to a fresh start!! (See my related article listing 75 famous people who have filed for Bankruptcy) Many times, events occur in people's lives that cannot be expected. You may have had a sudden loss in income, a family medical catastrophe, a work injury, or any one of numerous other difficulties that would have been almost impossible for which to plan. Most of the people that we represent are good people who have encountered unfortunate circumstances and just want to get a fresh start. We understand that for most of our clients bankruptcy is the last resort. Many of our clients have a very difficult time determining if personal bankruptcy is the right decision for them.
You should stop and ask yourself the following questions:
Are the credit card companies concerned about your financial difficulties?
Are you paying your creditors instead of saving for your children's education or your retirement?
When is the last time you took a vacation?
Have you had to make tough decisions about whether to buy groceries and prescriptions or pay a credit card collection agency?
As a team of professionals, our firm believes it is important for an attorney to provide both bankruptcy and non-bankruptcy alternatives. We believe in giving you our honest opinion as to what will put you in the best possible financial condition now and into your future. The client always comes first. Our goal is to present you with your options and empower you to make decisions which benefit you and your family.
8. How do I choose a personal Bankruptcy Attorney?
Linda Tirelli, Esq.
Personable and Professional!

This is not as easy as it may first seem. I am often approached by debtors who have consulted with two or three other attorneys and dread the "shopping around" aspect of finding a legal representative. I am perfectly confident and glad to learn my clients have put the time and energy into deciding who to trust.  I encourage a client shop around, in fact the more you do, the better my firm will look.

Just like when choosing a doctor, sometimes you just need to “click” with the person you are seeking help from. Your finances are about as personal as you can get to you and your family.  Many people have a hard time talking about their financial problems largelt because they are embarrassed, feel alone or just dont understand what happened.  In fact, statistically speaking more people are comfortable discussing their sex lives than they are their finances.

I want you to be comfortable with me and  my team and assure you we will never try to belittle you or talk above you. Customer service is important in all professional settings – including Bankruptcy Law Firms. We are very sensitive to your crisis and respect the fact that you have choices in terms of where to take your business. This is why our firm is dedicated to go the extra mile and explain concepts 2, 3 even 4 times to make sure you understand the process. You are not just a number here, you are an individual with a story to tell and reasons leading up to where you are financially. We are commited to serving you as an individual.
When considering filing a personal bankruptcy, you want to be advised by someone who is familiar and experienced with all of the "ins and outs" of bankruptcy law. This is especially true when you own a home or car or have other assets that you are trying to protect. While some general practice attorneys are capable to handle some Bankruptcy work, you do not want your advice from an attorney who knows a little bit about a lot of different areas of law, but not a lot about bankruptcy.
Think of it like this, your family doctor might be able to diagnose a heart problem, but she may not be the best option to administer treatment. On the other hand, your cardiac surgeon may not be the one to give you advice on how to get rid of a cold. Same to in the law there are different specialties and deference should be given to professionals who practice in Personal Bankruptcy Law.
9. Can I get rid of student loans or tax debts?

Any bankruptcy attorney must have a sophisticated understanding of bankruptcy law to deal with student loan and tax debts. Until October 1998, student loans were discharged through Chapter 7 bankruptcy if the first payment on the loan became due more than seven years prior to the date of filing. In October 1998, President Clinton signed a new law into effect that disqualified all student loans from discharge. We can still help you obtain relief from your student loan debts through the use of Chapter 13 bankruptcy. Under Chapter 13 bankruptcy, our attorneys can consolidate your student loan debt, along with any other outstanding bills, and arrange an interest free repayment plan, so that you do not have to suffer through the burden of garnishments, harassment and other collection efforts by student loan agencies. We may even be able to reduce the amount paid to the student loan agency during the course of your Chapter 13 bankruptcy so that your consolidation payment is as low as possible.
Tax debts are generally subject to discharge only if you file personal bankruptcy more than three years after you file a timely, truthful tax return. If your return is filed late, the taxes are generally discharged only if you file bankruptcy more than two years after filing a truthful tax return. Of course, these are general rules and you should speak with a Bankruptcy Attorney who will perform a detailed analysis of these issues.
10. Can I get credit after filing personal bankruptcy?

We hope so! Think of it this way, well over a million people filed for personal bankruptcy last year, more than a million have filed for protection this year and as sure as you are reading this today, more than a million people will file next year too.  The market for credit post-bankruptcy is huge.  Moreover, you are a better credit risk to lenders after you file than you are before you file.
Although bankruptcy may legally be reported to your credit report for up to 10 years, you can begin to reestablish your credit immediately. Remember that "credit" is your ability to borrow money. Lenders consider many factors while determining whether to loan you money, but most importantly, they consider your debt-to-income ratio. You are probably visiting this site because you already have more outstanding debt than you have the ability to pay. So, arguably, you do not have credit.
Filing eliminates most, if not all of your debts, therefore reducing your debt-to-income ratio, potentially improving your ability to borrow money in the future. Some financial institutions actively solicit business from people who have filed. Lenders are in business to make money by lending you money and charging you interest. Lenders know that once you have filed, you will not be able to file again for 8 years.
Many of our clients have purchased cars immediately upon receiving their discharge orders. Many lenders have programs that provide for post-bankruptcy borrows to obtain home financing within a year or two after a discharge. Many of our clients even receive solicitations for unsecured credit cards almost immediately upon receiving their discharge. Just please be advised that you need to be careful not to fall into the credit card "trap".
11. Can my employer fire me if I file for Bankruptcy?

Absolutely not. You have a right to file for Bankruptcy Protection and unless your employer is one of your creditors or if you have authorized your employer to pull your credit report, in all likelihood they will never know. Again, it is a matter of public record so if they had reason to research the issue and find out if you filed, they legally can. However, under 11USC 525, you are specifically protected from being discriminated against and terminated from employment. Legally, your employer can also not discriminate against you if you are applying for a position and not hire you just because you filed for Bankruptcy Protection.
If you feel you have been discriminated against, you need to contact an attorney specializing in employment law to understand potential recourse.   Furthermore, given the number of employers who have filed for corporate bankruptcy protection, it would be like "the-pot-calling-the-kettle-black" for an employer to discriminate against an individual filer.

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Garvey Tirelli & Cushner Ltd.
50 Main Street Suite 390
Wite Plains, NY 10606


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