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What is the difference between Chapter 7 and Chapter 13?


            In a Chapter 7, the case is over and done with in approximately ninety days from the date of filing.  Generally, you do not make any payments to the Court and you are granted a discharge of credit card debts, medical bills, and auto loans deficiencies.


            In a Chapter 13, the case will continue for at least 36 months and can be as long as 60 months from the date of filing.    You will make a monthly plan payment to the Trustee in order to repay some or all of your debts.


Is there a minimum amount of debt to file upon?


            No.  You can file on any amount, but since you can only file a Chapter 7 case once every eight years, you only want to file if you have no other choice.


How often can you file a Chapter 7?


            Eight years must pass from the date of discharge to file a second Chapter 7 case.  You can file a Chapter 13 case four years after a Chapter 7 discharge.  You would have to pay back all of your unsecured debt in the Chapter 13 case.


I want to KEEP MY CAR, what do I do?


The rule is simple, if you want to keep any secured property such as a car, motorcycle, bass boat or camping trailer, you must continue to make the normal payments.  You are, however, limited as to the amount of equity you can retain in secured property.


How much equity can I keep in my car?


            In Missouri, you are allowed to keep up to $3,000 equity in one car.  It may be necessary to get your car appraised at CarMax for free.


How much equity can I keep in my house?


            The equity exemption amount for houses is $15,000 after a reasonable amount is deducted from the price of the house for selling it.


What about my furniture and jewelry?


            In Missouri, you are allowed to keep up to $3,000 in household goods and furniture and $500 in jewelry.  There is another exemption under RSMO 513.430 for wedding rings up to $1,500 in fair marker value.


Can I keep my TAX REFUNDS?


            It all depends upon the size of the refunds and if you have children living with you.  You can claim the head of household exemption and keep around $2,000 in refunds if your children are less that 18 years old.


How much does it cost to file?


            The filing fee or court costs for a Chapter 7 is $335 and a Chapter 13 cost is $306. 


Do I have to take a class or go to a school?


            Yes, you will need to complete a pre filing bankruptcy class that takes a couple of hours on average and costs about $25 for individuals and couples.  This class can be done online.  There is also a pre discharge class that has to be completed before you can be granted a discharge of your debts.  The second class costs around $10.


Does my spouse have to file with me?


            No, you can file by yourself if your spouse does not want to file or is ineligible to file.  Their income and expenses must be included in your budget for the most part.  Trustees ask more questions in these cases.


Should I keep making my CREDIT CARD payments until the case is file?


            No.  You should stop making payments on your charge cards.  You must keep the car payments and the house payments current if you want to keep them


Can I file a Chapter 7 case if I am behind in my house payments?


            You will want to file a Chapter 13 case in order to pay back your past due house payments over the life of the Chapter 13 plan.  This is a major reason why people go into a Chapter 13 case.  Your mortgage company will probably request permission of the court to foreclose on your house if you file a Chapter 7 and are behind in house payments to them.  Their Motion is called a Motion to Lift the Automatic Stay.


Will my name be in the paper that I file bankruptcy?


            Generally no.  Some small town newspapers still print the names of those who file for bankruptcy.  It is a public record since cases are filed electronically.


Will my boss find out that I filed?


            Generally no.  If you work for the bank that has your car or house loan, they may find out.


Do I have to list out my car since I want to keep paying for it?


            Yes.  All debts need to be listed out, including car loans.  Most auto lenders will mail out a Reaffirmation Agreement for you to sign.


Can I keep my furniture I bought from NEBRAKSA FURNITURE MART?


            Yes.  They will mail out a Reaffirmation Agreement that sets out a repayment plan.  They want your money but will come after the furniture and electronics if you do not pay for them.  They will accept at lump settlement in most cases that will save you some money. 


Can I get out from under my STUDENT LOANS?


            Generally not.    They are not dischargeable at the present time.  Congress has talked about changing the law but nothing has happened yet.


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