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General Bankruptcy FAQs

  1. How do I know if I should file for bankruptcy?
  2. There are many situations where bankruptcy may be best option available to save your assets or prevent you from being in debt for many years. A few of the more common situations where bankruptcy is an appropriate option are listed below. Of course, each person, and his or her specific situation, is unique. You should consult with an attorney at The Carmichael Firm to discuss all of your options and alternatives.

    Will bankruptcy stop a lawsuit against me?

    If you are being sued, bankruptcy may be a better and cheaper way to deal with the lawsuit. In fact, you may have options before the lawsuit is finished that will not exist after the lawsuit goes to judgment. We strongly urge you to speak with an attorney at The Carmichael Firm about filing a bankruptcy before any judgment is entered against you. In most cases, a bankruptcy filing will stop a lawsuit immediately and will prevent your creditors from placing a lien against your house or garnishing your wages.

    Will bankruptcy stop foreclosure on my home and/or my stop the repossession of my car?

    Bankruptcy can stop foreclosure on your house or a repossession of your car. In most cases, an "automatic stay" arises by law the instant a bankruptcy is filed. The "automatic stay" stops the foreclosure process and prevents any collection actions, such as repossessions or garnishments. Bankruptcy may also allow you to consolidate your mortgage arrears or automobile balance and make payments on those debts over time. In a Chapter 13, the attorneys at The Carmichael Firm will design a repayment plan for you, with your help.

    I can only afford the minimum monthly payment on my credit cards and my balance keeps increasing. Can bankruptcy help me?

    If you are only paying the minimum required payment on your credit card bills each month (generally about 2% of the outstanding balance), and the interest rate is 20%, it will take you 15-20 years to pay off a $10,000 debt. Do you really want to be in this same financial situation in 20 years? Filing a bankruptcy with The Carmichael Firm will discharge these debts and allow you to get a fresh start and get on with living your life.



  3. My creditors will not stop calling me regarding my past due bills. How can I make them stop?
  4. As soon as you retain (hire) The Carmichael Firm as your attorneys, you can refer all of your creditor calls to our office, and we can deal with them. They have to stop calling you if you have an attorney. This will happen even before you file for bankruptcy.

  5. Will bankruptcy stop foreclosure on my home and/or prevent my car from being repossessed?
  6. In most cases, bankruptcy can stay a foreclosure of your house or a repossession of your car. An "automatic stay" arises by law the instant a bankruptcy is filed. The "automatic stay" stops the foreclosure process and prevents any collection actions, such as repossessions or garnishments. Bankruptcy may also allow you to consolidate your mortgage arrears or automobile balance and make payments on those debts over time through a repayment plan. There are exceptions to the automatic stay. It is possible that filing will not stop foreclosure. The "automatic stay" is not always automatic. It is important to see a lawyer well in advance of a foreclosure sale date. Every case is different, and The Carmichael Firm will be able to provide advice about your specific situation before you file.

  7. Who will know about my bankruptcy?
  8. Parties who receive notice of the bankruptcy are your creditors, the Bankruptcy Court, the IRS, and the Louisiana Department of Revenue. The bankruptcy is a public record, so anyone who wants to try to find out about your bankruptcy could do so.

  9. Will my employer be notified about my bankruptcy?
  10. Your employer will generally not be notified of the bankruptcy unless your employer is also a creditor, or unless there is a garnishment in place. In this case, your attorney may need to notify your employer that you filed bankruptcy so that the garnishment can be canceled. Neither the Bankruptcy Court nor your attorney will contact your employer.

  11. I only want to file bankruptcy on certain creditors, but not on others. Is this possible?
  12. No. You are required by law to list all of your creditors, including friends and family members who have loaned you money. Intentional failure to list a debt is a serious matter and could result in the denial of your entire bankruptcy discharge, and even criminal prosecution. However, you are not prohibited from voluntarily paying selected debts after you file for bankruptcy. The Carmichael Firm can explain how you can legally repay any debt you want, after your bankruptcy is over, on a purely voluntary basis and without a reaffirmation agreement.

  13. What happens to co-signers of debt in my bankruptcy?
  14. A Chapter 7 bankruptcy releases you from your debts, but it does not release your co-signers. Creditors will demand payment from the co-signers if you don't pay. You can protect the co-signers by continuing to pay the debt after your discharge (even though you are not obligated to), or you can file a Chapter 13. In certain circumstances, a Chapter 13 can prevent a creditor from collecting from the co-debtor while you repay the debt through the Chapter 13 plan.

  15. Do I have to go to court?
  16. You must attend a first meeting of creditors. Your attorney will be with you at this meeting. This meeting is held in a hearing room used by the bankruptcy trustees (not in the courtroom). The trustee will ask you questions regarding your bankruptcy filing. If any of your creditors are present, they can also ask you questions. However, creditors rarely attend this hearing, and, if they do, they rarely ask questions. Your attendance at this hearing is mandatory and failure to appear can result in dismissal of your case.

    We understand that the first meeting of creditors can be very stressful for the debtors.

  17. How do I rebuild my credit after filing for bankruptcy?
  18. Although bankruptcy may be legally reported on your credit report for up to 10 years, you can begin to reestablish your credit immediately after your bankruptcy discharge.

    Lenders consider many factors when determining whether or not to extend credit to you, but the most important of all factors that they will consider is your debt-to-income ratio. Based on the credit scoring models currently used by the credit reporting agencies, a debtor's credit score often improves upon the filing of a bankruptcy because of the elimination of debt.

    The Carmichael Firm will show you how to rebuild your credit and use that credit responsibly.