Katz and Wulff Attorneys at Law

Practicing exclusively in bankruptcy and proudly serving Southern Illinois for more than 20 years.

FAQs

What Happens To My Property?

In a Chapter 13 case, you can keep all of your property if your plan meets the requirements of the bankruptcy law.  In most case you will have to pay the mortgages or liens as you would if you didn’t file bankruptcy.
In a Chapter 7 case, you can keep all property that is “exempt” from the claims of creditors under state law.

What Will Happen to My Home and Car If I File Bankruptcy?

In most cases you will not lose your home or car during your bankruptcy case as long as your equity in the property is fully exempt. However, some of your creditors may have a “security interest” in your home, automobile or other personal property. This means that you gave that creditor a mortgage on the home or put your other property up as collateral for the debt. Bankruptcy does not make these security interests go away. If you don’t make your payments on that debt, the creditor may be able to take and sell the home or the property, during or after the bankruptcy case.

Will Bankruptcy Wipe Out All My Debts?

Yes, with some exceptions. Bankruptcy will NOT normally wipe out:

  1. Money owed for child support, alimony, property settlements in a divorce proceeding, criminal fines, or most income taxes.
  2. Debts not listed on your bankruptcy petition.
  3. Loans you got by knowingly giving false information to a creditor, who reasonably relied on that information in making you the loan.
  4. Debts resulting from “willful and malicious” harm.
  5. Student loans

Can I Get Rid of a Second or Third Mortgage by Filing for Bankruptcy?

In Chapter 13 cases only, if you owe more on your first mortgage than you could reasonably expect to sell your house for, it is possible in some cases to “strip” a second or third mortgage and get rid of those debts along with all of your other debts.  You may be required to incur additional cost in obtaining a new, independent appraisal of your real estate in order to show what your house is worth.  Many people who would have filed under Chapter 7 find this benefit well worth the additional cost of filing under Chapter 13 instead.

Where Can I Get More Information Online?

To view informational videos about obtaining bankruptcy relief published by the United States Courts, click here.

Debts such as student loans, child support, alimony and most kinds of back income taxes usually cannot be discharged in bankruptcy. Income taxes that are more than three (3) years old often CAN be discharged. Call us to find out how.