Bankruptcy Frequently Asked Questions

  1. Does bankruptcy forgive student loans? It is extremely difficult to discharge student loans in Bankruptcy, but §525(c)(1) of the Bankruptcy Code does permit future student loans.
  2. Does Bankruptcy eliminate motor vehicle surcharges? Perhaps. If you own a home and MVC has filed a lien, the surcharges may have to be repaid. If MVC has not filed a lien then the surcharges are dischargeable in a Chapter 13, and probably dischargeable in a Chapter 7. To those individuals that have had their license suspended solely because of non-payment of surcharges, MVC will reinstate the license with the payment of a fee.
  3. Are income taxes dischargeable in Bankruptcy? Generally, if you filed timely and accurate returns and the taxes are more than three years old from the due date, the taxes are dischargeable. However, as with MVC surcharges, if you own a home and the IRS has filed a lien, the taxes may have to be repaid.
  4. Will Bankruptcy effect my job? No. §525 of the Bankruptcy Code prohibits job discrimination due to a Bankruptcy filing.
  5. Will Bankruptcy stop the phone calls? Yes. §362 of the Bankruptcy Code automatically stops all creditor calls, wage garnishments and bank levies.
  6. My home is in foreclosure, can I save my home through Bankruptcy? Yes. A Chapter 13 allows five years to bring mortgage arrearages current. Once the Bankruptcy is filed, however, all future mortgage payments will need to be made in a timely fashion.
  7. Will I be able to retain my furniture and bank accounts if I file Bankruptcy? Yes. Congress provides liberal Bankruptcy exemptions. Provided you are within those exemptions you will be able to retain your furniture and bank accounts. Debts secured by homes or cars must be repaid in a timely fashion.

Brian S. Thomas, LLC