At Blalock Law Office, P.A., we understand that bankruptcy can be rather complex and that you probably have many questions. We have answered a few common questions to get you started.


What is bankruptcy?

Bankruptcy is a set of laws designed to help individuals and companies protect their property and satisfy their debts to the best of their ability. Bankruptcy is a legal proceeding in which a person or company that has difficulty meeting financial obligations can obtain a fresh start. The right to file for bankruptcy is provided by federal law under the U.S. Bankruptcy Code, and all bankruptcy proceedings are handled in Federal Bankruptcy Court.

How can bankruptcy help me?

Filing bankruptcy causes an automatic stay to go into effect, which stops most of the collection attempts against you and your property immediately. It can end the collection calls and harassment from your creditors. It can stop wage garnishment and prevent the seizure of your assets, including foreclosure of your home and repossession of your vehicle. Bankruptcy can reduce, eliminate or modify your debt or certain small business debt to allow you to get back on your feet.

What is the difference between Chapter 7 and Chapter 13 bankruptcy?

A Chapter 7 bankruptcy is often referred to as a "liquidation" bankruptcy and discharges most of your unsecured debt. It is designed to help you get out from under debts, such as mounting credit card and medical bills that you simply cannot afford to repay. There is no monthly payment plan in a Chapter 7 bankruptcy. Most people filing Chapter 7 are allowed to keep all their property, including their homes and vehicles, through available exemptions.

Chapter 13 is a bankruptcy plan designed to reorganize your financial situation. In Chapter 13, a monthly payment plan is set up to pay back a portion of the amount you owe to creditors. The amount you pay back is determined by several factors, including your disposable income, the value of the property you own and the amount and type of debt that you have. Homeowners facing foreclosure often use Chapter 13 as a way to save their homes and catch up on their mortgage payments.

What does it cost to file for bankruptcy?

For Chapter 13 bankruptcy, you must pay the filing fee of $281 in addition to the other costs associated with filing including the credit counseling expense. The base attorney fee set by the bankruptcy court is $3,700. This base fee typically is the same no matter which lawyer you use. We usually require a deposit of $660 to cover the filing fee and other costs before we file a Chapter 13 bankruptcy. The remainder of the attorney fees is paid through the monthly Chapter 13 plan payments, so no other direct payment to our law firm is required. For a Chapter 7 bankruptcy, you must pay the filing fee of $306 in addition to the other costs associated with filing including the credit counseling expense. The typical attorney fee is between $1,000 to $1,300 for Chapter 7 bankruptcy filings. We can advise you about the exact amount of your fees at your free consultation at our office.

Are you able to file bankruptcy after changes to the bankruptcy law?

New bankruptcy laws took effect on October 17, 2005. These changes were the result of intense lobbying by credit card companies and other lenders, and they were intended to make it more difficult to file for bankruptcy. Despite these changes, bankruptcy relief remains available to most people who need it, and this law firm is well-versed in the changes to bankruptcy law. If you have questions about the effect of the bankruptcy laws on your particular financial situation, please contact us to schedule a free consultation.

Is bankruptcy right for you?

Declaring bankruptcy should be considered in the following situations:

  • The amount of unpaid bills is so much that repayment is unlikely or impossible.
  • A creditor has threatened or commenced foreclosure or repossession.
  • Creditors and collection agents are making frequent, harassing collection calls.
  • You want to stop a lawsuit, execution of a judgment, wage garnishment or other action that affects you, your credit and your property.

Can I file for bankruptcy twice?

Yes, you may, with some caveats. If you have received a Chapter 7 discharge, you must wait eight years to receive a second Chapter 7 discharge or four years for a Chapter 13 discharge. If you have received a Chapter 13 discharge, generally, you must wait six years to receive a Chapter 7 discharge and two years for a second Chapter 13 discharge.

Can a loan co-signer be responsible for a debt if the other person declared bankruptcy?

Typically, yes. If your debt is discharged, the discharge only applies to your personal guarantee, not the co-signer. Under Chapter 7, you can protect your co-signers by reaffirming or paying off the debt. While under Chapter 13 the automatic stay also protects your co-signer, creditors can remove the stay and pursue your co-signer under certain circumstances.

How long does a bankruptcy stay on my record?

Circumstances can vary, but typically it remains for 10 years.

What is the difference between secured and unsecured debt?

A secured debt is tied to some type of property to guarantee the loan. The typical example of a secured debt is a house that secures the mortgage. On the other hand, an unsecured debt, like credit card debt, is not guaranteed by any property. Secured and unsecured debts are handled differently under bankruptcy law.

What is wage garnishment?

If you owe money to creditors, they may get a wage garnishment. A wage garnishment takes money directly out of your paycheck to pay off a creditor or creditors. For many, garnishments are shocking and embarrassing. In certain circumstances, bankruptcy permanently can remove a wage garnishment.

How can I get creditors to stop calling?

There are a number of ways to get creditors to stop calling you. When you declare bankruptcy, the automatic stay forces creditors to stop collection efforts and wage garnishments. You can use the automatic stay to plan the rest of your bankruptcy. Additionally, the Fair Debt Collection Practices Act (FDCPA) explains acceptable collection behavior by debt collectors. Under the FDCPA, creditors are prohibited from harassing you, and continued harassment could entitle you to monetary damage from the creditor.

You can put an end to creditor harassment by informing your creditors that you've retained our services.

Contact us today for more bankruptcy answers

While this FAQ page is a perfect place to start, it certainly cannot answer every bankruptcy question. At Blalock Law Offices, P.A., I answer all of your questions in a one-on-one consultation. Please call us at (336) 274-2343 or contact us online today.


Office Location

620 Green Valley Road
Suite 209
Greensboro, North Carolina 27408

Phone: (336) 274-2343
Fax: (336) 235-0652