Bankruptcy is a legal process that provides individuals and businesses with relief from debts that they are struggling, or unable, to repay. It allows for the elimination, or in some cases, the restructuring, of the debt under the authority and protection of the United States Bankruptcy Court.

The most common types of bankruptcy for individuals are either Chapter 7 or Chapter 13. Chapter 7 is a shorter, usually less complicated process with no form of repayment plan involved. In a Chapter 7 bankruptcy case, the dischargeable debt (normally things like credit cards, medical bills, and miscellaneous types of unsecured debt like, for example, old electric, cell phone, car insurance, and payday loan type bills) simply gets discharged.  Chapter 13, on the other hand, usually involves some kind of repayment plan for the restructuring and repayment of all or a portion of the debt.

Yes. Once you file for bankruptcy, an automatic stay immediately goes into effect. This stay, which actually is a federally imposed injunction, requires that creditors immediately stop contacting you, garnishing your wages, or pursuing lawsuits against you.

Filing a bankruptcy case will, no doubt, initially negatively impact your credit score. However, particularly over the last several years, many individuals who have filed bankruptcy cases through my office have found that their credit scores have shown marked improvement within a relatively short period of time.

Yes, almost certainly. In Chapter 7 bankruptcy cases filed here in Rhode Island, it is highly unusual for anyone to not be able to retain their home or vehicles. That is because the applicable federal or Rhode Island state exemption statutes (which govern what you are permitted to retain through a Chapter 7 bankruptcy case) are extremely generous. This is, however, one of several areas where it is extremely important for you to have experienced legal representation when filing for bankruptcy protection. In over 25 years of practice, I have never had a client lose a house, vehicle, or other tangible asset, except in very, very rare instances when such loss was expected at the outset of the case.

Most unsecured debts, such as credit cards, medical bills, and miscellaneous types of unsecured debt like, for example, old electric, cell phone, car insurance, and payday loan type bills, can be discharged in a bankruptcy. However, certain debts, like student loans, child support, alimony, and certain tax obligations, typically cannot be discharged.

No. Since the pandemic hit in 2020, the bankruptcy process here in Rhode Island normally only involves attendance at a Zoom meeting called a “Section 341 Meeting of Creditors.”  My clients come to my office to virtually attend this Zoom meeting, which typically takes place approximately 25 days after their case is filed and almost always lasts for less than 8 minutes.

The cost of filing for bankruptcy includes the Bankruptcy Court filing fee and the attorney fee. For a Chapter 7 bankruptcy case filed in Rhode Island, the Bankruptcy Court filing fee is currently $338. For a Chapter 13 case, the Bankruptcy Court filing fee is $313. It is rare that my attorney fee for any Chapter 7 case is in excess of $1,200. It is also rare that my “up front” attorney fee in a Chapter 13 bankruptcy case exceeds $1,200, although I will typically receive via the Chapter 13 Trustee (out of the payments made by my clients as part of their Chapter 13 repayment plans) a post-filing fee of approximately $2,000 to $2,500.

The duration of the bankruptcy process depends on the type of bankruptcy case filed. A Chapter 7 bankruptcy case typically takes approximately 90 days to complete from start to finish. A Chapter 13 case, which involves some form of repayment plan, can last between 36 and 60 months.

Bankruptcy filings are public records, so theoretically, anyone could access the information necessary to determine that someone had previously filed a bankruptcy case. However, bankruptcy filings are not commonly publicized, and it is very unlikely that people outside of your creditors and legal representative will become aware of a bankruptcy filing unless you tell them.