Frequently Asked Questions
Bankruptcy is a process pursuant to federal law which allows individuals and entities to discharge (erase) most, if not all, of their unsecured debt. How much debt you are able to discharge depends on the type of bankruptcy you are ling and the types of debt you currently have.
For those individuals, or those with businesses, who have more debt than they can pay, ling a Montana bankruptcy could be a viable choice. The original goal of bankruptcy is go give honest debtors a fresh nancial start, and, in the case of Chapter 13 bankruptcy, to repay creditors in an orderly manner to the extent the debtor has disposable income available to do so.
If you have little income and a large amount of unsecured debt (medical expenses and credit card bills) then you might benet from ling for bankruptcy. If you are ling for bankruptcy simply to stop creditor harassment, there are consumer laws which protect you from such harassment. It is recommended that you speak to a knowledgeable Montana bankruptcy attorney before you make a decision about ling for bankruptcy.
Bankruptcy can have numerous beneﬁts to individuals. It can eliminate your legal obligation to repay certain debts. It can also stop wage garnishments. Further, if a creditor is in the process of garnishing your wages (such as starting a lawsuit), ﬁling for bankruptcy can stop the creditor in their tracks from trying to collect on the debt while the bankruptcy proceedings are pending. It may also stop foreclosure proceedings, allow you to keep your car, and allow you to keep and secure certain categories of your property.
The benets of ling for bankruptcy is an elimination of the legal obligation to pay some or all of your debts, known as debt discharge. A bankruptcy ling can halt foreclosure proceedings on your home, allowing you the time to catch up on any arrears. A bankruptcy ling can halt a car repossession, or, in some cases, can force the creditor to return property after a repossession. Bankruptcy can stop wage garnishment, restore utility services (or prevent termination of those services), and can allow you challenge creditor claims when you think there is fraud involved.
What ling for bankruptcy will not do is solve every nancial problem you have. You are generally not able to eliminate secured debts, or discharge debts such as child support, student loans, criminal nes, some taxes, court restitution orders, some divorce-related debts and spousal support. Bankruptcy does not protect any co-signers on your loans. If a relative, business partner or friend has co-signed a loan for you, even if you
discharge the loan during your bankruptcy ling, your co-signer may still be liable for repayment of the loan. Finally, ling bankruptcy in the state of Montana will not discharge any debts which may arise after you le your bankruptcy forms.
Chapter 7 is the most common type of bankruptcy, however you must either be under the median income for your household sice, or pass the means test to qualify. You will compare your income to the median income in your county in the state of Montana, and if your income is equal to or below, then you will probably be able to le for Chapter 7 bankruptcy. In Chapter 7 bankruptcy, most of your debts are discharged without paying them. Chapter 13 bankruptcy is also known as debt reorganization, and will take your income minus your expenses, then the amount remaining (disposable income) will be distributed between your creditors for the next three to ve years.
You will pay $310 in ling fees for a Chapter 13 bankruptcy ling, and $335 for a Chapter 7 bankruptcy ling. If you cannot aord this ling fee, you may qualify to pay the fee in installments. You will also be required to pay your Montana bankruptcy attorney’s fees, credit report fees, and the fees (if any) for the two classes you must take pursuant to the Bankruptcy Code. The attorney’s fees will depend on the size and complexity of your case, but we believe are fees are reasonable. Further, in a Chapter 13 bankruptcy, generally, the entire fee does not need to be paid up front. Rather, a majority of the attorney fees can be rolled into the repayment plan.
This is a tough question to answer, because it really depends on your individual situation. If you are far behind on your bills, your credit has most likely already been adversely aected, and ling bankruptcy will probably not make it much worse. A bankruptcy ling will appear on your credit report for ten years, however since it will also wipe out your old debts, you may be able to obtain credit and pay your current bills.
Filing bankruptcy in Montana immediately stops all creditors from debt collection practices, at least until all your debts are properly sorted out under the laws of the state of Montana. Once a creditor or bill collector is notied of your bankruptcy ling, they must immediately cease all collection eorts. This can take a couple of weeks, however you may also inform a creditor who calls you that you have led a bankruptcy petition, supplying them with the case number. Your attorney can also contact creditors, particularly if a lawsuit is pending. Creditors who continue to harass you after being informed of the bankruptcy ling could be sanctioned by the court, and required to pay attorney fees.
Student loans are not generally dischargeable through a bankruptcy ling. That being said, a student loan could be discharged if it is not insured and not guaranteed by a governmental unit, or if it is not under a program which is wholly or partially funded by the government. If paying the student loan would impose an “undue hardship” on the debtor and his or her dependents, then it could potentially be discharged.
If you are contemplating ling for bankruptcy, it is denitely to your advantage to consult an experienced Montana bankruptcy attorney who can fully answer your questions regarding bankruptcy in the state of Montana.
At a minimum, you will need the following documents:
- The last six months of your paystubs;
- The last six months of your bank statements; and
- The last three years of your tax returns.
At the meeting of the creditors, you will need to bring:
- Your driver’s license; and
- Your social security card or an original W-2.