Q: What is the automatic stay?
A: This is an injunction that goes into effect automatically upon the filing of a bankruptcy. It strictly prohibits the commencement or continuation of any acts to collect on a debt that arose prior to filing the bankruptcy. This includes enforcement of judgments, creating or perfecting liens, arid many other actions. (It does not apply to collecting alimony maintenance and support).
Q. Does the automatic stay always apply when a bankruptcy case is filed, and if so, for how long?
A: Generally, the automatic stay goes into effect immediately upon filing your case and against acts taken towards you personally until you receive your discharge. Stays against actions towards property you own may last longer or shorter depending on what happens to that property during your case (e.g. it is sold by the Trustee or not, etc.). Note: For cases filed on or after October 17, 2005, there are several limits to the length of the automatic stay: 1. If you had a prior bankruptcy case dismissed under any chapter within one year prior to the filing of your present case, the automatic stay will terminate 30 days after your new case is filed, unless you obtain a court order extending it, for cause and a showing of good faith as to why the prior case was dismissed. 2. If you had more than one prior bankruptcy case dismissed under any chapter within one year prior to the filing of your present case, the automatic stay does not go into effect at all unless and until the court orders it into effect, after a noticed hearing. There are other new limitations on the automatic stay, but you should check with your attorney as to whether they will affect you.
Q: Where Does My Case Get Filed?
A: Your case is filed in the District where you have resided or have your domicile (or for a business, its principal place of business) for the greater part of the 180 day period prior to the date your case is filed.
Q. What are exemptions?
A: Exemptions are protected allowances for the value in certain assets. For example, a homestead exemption protects the equity you have in your home, up to a certain value. All States have different exemption laws, which protect the value in certain assets. You need to check with a qualified bankruptcy attorney regarding what exemptions you are entitled to when you file your case. Which State's laws you use depends on where your domicile was located for the 2 years prior to commencing your bankruptcy case.
Q. Can I pick and choose who to list in my bankruptcy case?
A: Absolutely not. I don't know where people get this idea. You must list all your assets and all your debts in ANY chapter of bankruptcy. You may voluntarily repay anybody you want after your case is concluded (arid you are required to repay any debts that are not discharged), but you are still required to list all your creditors.
Q. Can you be fired or denied employment because of a bankruptcy?
A: No. While an employer can usually find some reason to fire anyone, they cannot use bankruptcy as a basis for doing so. This is set forth in Section 525 of the Bankruptcy Code.
Q. Can I remove liens against my property?
A: Yes. Under certain circumstances, judicial liens and "non-possessory, nonpurchasemoney security interests" may be removed if, based on the value of the asset and the amount of senior liens and encumbrances against it on the date your bankruptcy case is filed, the fixing of the lien causes it to "impair" an exemption to which you are entitled under State (or other applicable) law.