Bankruptcy FAQ

Household debt climbed to more than $14 trillion in the last quarter of 2020. Millions of Americans struggle to pay medical bills, credit cards, business debts, car payments, rent payments and mortgages. If you are one of many people struggling with excessive debts, foreclosure, repossession, garnishment, or lawsuits, then bankruptcy may be a good option for debt relief.

Whether you are a business owner or consumer, bankruptcy may be an option for resetting your finances. However, your bankruptcy filing options and possible property exemptions may vary depending on your personal circumstances. Below, our Kansas City bankruptcy attorneys answer some of the most common questions we receive about bankruptcy.

What Happens When You File for Bankruptcy?

What happens when you file for bankruptcy depends on your unique circumstances and the bankruptcy Chapter you file your case under. Each case is going to be slightly different. You must take credit counseling before filing a bankruptcy petition.

After you file the bankruptcy petition, the automatic stay prevents creditor collection attempts. This means that creditors must stop collecting for you, stop lawsuits and garnishments, cease repossession, and stop foreclosure. Depending on when you file and the specific actions of the creditor, you may be able to prevent the seizure of certain assets. The Bankruptcy Court also assigns a Trustee to your case. The Trustee’s responsibilities vary depending on the bankruptcy Chapter you file your case under.

We encourage you to contact our Kansas City bankruptcy attorneys if you have more questions about the filing process. Our attorneys can answer questions you have about the bankruptcy filing process or bankruptcy filing requirements.

Can I Pass the Chapter 7 Means Test?

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 changed the Bankruptcy Code by requiring some filers to pass a means test before qualifying for Chapter 7 bankruptcy. If your income is less than the state median for a household of your size, then you automatically pass. You must take the Means Test if your income is higher than the state median and you have primarily consumer debts.

The Chapter 7 Means Test checks to see if you have enough disposable income to repay your debts. Disposable income is income left over after your monthly expenses. If your disposable income is at a certain threshold, then you cannot file for Chapter 7 bankruptcy.

For filers who cannot pass the Chapter 7 Means Test, Chapter 13 bankruptcy may be an option. However, we strongly encourage you to contact our Kansas City bankruptcy lawyers if you have questions about passing the Chapter 7 Means Test.

What Are the Advantages of Filing for Bankruptcy?

The advantages of bankruptcy depend on the circumstances. If you are a person facing the prospect of foreclosure, and want to keep your home, then Chapter 13 bankruptcy might help you get caught up on payments and avoid a foreclosure sale. Someone with a large amount of unsecured debt and little in secured debts may benefit from a Chapter 7 bankruptcy.

Of course, there are some universal advantages that apply to most cases. For instance, an automatic stay goes into place after filing bankruptcy. The automatic stay prevents creditor collection attempts from proceeding for as long as it is in effect. You may also be able to discharge debts that were making your financial life difficult.

It can be tough to determine what the advantages are without first talking to an experienced bankruptcy lawyer. Our bankruptcy lawyers can explain the benefits of filing bankruptcy in Kansas or Missouri during an initial consultation.

Should I File for Bankruptcy?

This is another question that would be best answered by our bankruptcy lawyers during a consultation. However, as a rule of thumb, if you are facing insurmountable debts and the possibility of creditor collection actions, then you should consider filing for bankruptcy.

How Long Does it Take to File for Bankruptcy?

How long your case takes to conclude depends on the circumstances and the bankruptcy Chapter you filed your case under.

With a Chapter 13 bankruptcy, you pay back certain debts through a three to five year repayment plan. Your case would conclude upon completing the repayment plan.

Chapter 7 bankruptcy works differently. In a Chapter 7 bankruptcy case, you do not pay back debts through a three to five year repayment plan. The Trustee may use your nonexempt assets to satisfy your debts. Chapter 7 cases can take a few months, whereas Chapter 13 cases can take three to five years.

Can You File for Bankruptcy On Medical Bills?

Medical bills are unsecured debts that you can discharge in bankruptcy. Whether you should file for bankruptcy over medical bills depends on your personal circumstances. It is not uncommon for people with extensive medical debt to have other types of debt.

If you have other debts or are facing a wage garnishment, then we encourage you to contact us for a consultation. We can walk you through possible debt relief options.

Call Our Bankruptcy Attorneys in Kansas City for a Consultation

The Kansas City bankruptcy attorneys at Troppito Miller Griffin, LLC can answer any questions you have about filing bankruptcy in Kansas or Missouri. To schedule an initial consultation with us, dial 816-221-6006 or use the contact form on our site.