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Bankruptcy - Frequently Asked Questions
Financial distress can feel like the end—but Bankruptcy can give you a fresh start. Not sure where to begin? Our FAQ section breaks it down step by step.
You are not prohibited from filing for bankruptcy more than once, but there is a waiting period between discharges in bankruptcy. In general, to receive an additional discharge, you will have to wait:
• Chapter 7 → Chapter 7 - 8 Years from the initial date of filing Chapter 7
• Chapter 7 → Chapter 13 - 4 Years from the initial date of filing Chapter 7
• Chapter 13 → Chapter 13 - 2 Years from filing date of FIRST Chapter 13
• Chapter 13 → Chapter 7 - 6* Years from filing date of Chapter 13
*There is an exception to the 6-year rule: If you paid:
• 100% of unsecured debts, or
• 70% of unsecured debts and the court found that you acted in good faith and did the best you could financially,
→ then you can file a Chapter 7 immediately after your Chapter 13 discharge and receive an additional discharge under Chapter 7
Credit Report Fee:
All clients must purchase a credit report to begin their application process with "The Law Office of Furonda Brasfield." The fee is $50, and we do not accept outside credit reports.
Credit Counseling Class Fee:
You are required, by law, to take a credit counseling class before you file bankruptcy, and a financial management class before your case is discharged. We recommend "Debtor CC" (https://bit.ly/3WUemCL)but there are multiple providers of this service and we will accept any accredited class if you provide us with the certificate of completion. The fees are typically around $20.
Filing Fees:
There is a $350 filing and processing fee for Chapter 7 bankruptcy.
There is a $320 filing and processing fee for Chapter 13 bankruptcy.
These fees cover the cost that the Bankruptcy Court charges to file the case ($338 for Chapter 7, $313 for Chapter 13) in addition to a small processing fee to cover credit card processing and other costs ($12 for Chapter 7 and $7 for Chapter 13).
Attorney's Fees:
• Chapter 7 - Call our office to discuss the fees charged to represent you and file your case. We have flexible payment options and can break down the costs of a Chapter 7 bankruptcy over 12 months.
• Chapter 13 - the attorney's fees for chapter 13 are set by the court and will be included in your monthly plan payment.
Yes. Bankruptcy does not mean that you can't get a vehicle. Two reputable sources who will be understanding of your situation:
1) Motorsports Authority: (479) 459-0228; Lmendenall@msastore.com; 4318 Central Avenue, Hot Springs, AR 71913
2) National Automotive Brokerage Services: (888) 335-1498; Info@natautobrokerage.com; P.O. Box 28148 Columbus, OH 43228
1) Initial Intake with Office Staff
2) Sign Pre-Filing Agreement
3) Accept Invitation to Client Portal from NextChapter
4) Complete Credit Report ($50)
5) REVIEW YOUR CREDIT REPORT
A. If there is a creditor missing from your report and we do not add them to your bankruptcy manually, THEY WILL NOT BE DISCHARGED IN BANKRUPTCY!
6) Client Uploads Documents to Client Portal
A. Pay Stubs (last 6 months)
B. State and Federal Income Tax Returns
C. Mortgage Statement
D. Copy of Drivers License
E. Copy of Social Security Card
F. Bank Statements (last 6 months)
G. Personal Property Assessment
7) Consult with Attorney
8) Take Credit Counseling Course at Debtor CC (https://www.debtorcc.org/bankruptcy-credit-counseling-course.aspx?ReferralKey=a149d24cd2094cc986950b380e04a785)
A. The credit counseling class MUST be completed before we can file.
9) File Bankruptcy
A. $350 in filing and processing fees for Chapter 7
B. $320 in filing and processing fees for Chapter 13
10) Automatic Stay Kicks In
A. Now creditors can no longer contact you or attempt to collect on your debt.
11) Sign Post-Filing Agreement
A. For 'No Money Down Bankruptcies', payments of $138.50 begin in fourteen (14) days.
12) Bankruptcy Schedules Filed
13) Complete Financial Management Class at Debtor CC (https://www.debtorcc.org/bankruptcy-credit-counseling-course.aspx?ReferralKey=a149d24cd2094cc986950b380e04a785)
A. This is REQUIRED before the court will enter a discharge.
14) File Reaffirmation Agreements
A. This is a promise that you will continue to pay for your secured debts (car or house).
15) Complete Meeting of Creditors— 341 Meeting
A. We will meet with the bankruptcy trustee by phone and they will ask a few questions about your petition.
16) Wait for Discharge
A. Once you receive a discharge, you are no longer required to pay the debts that were discharged. The Chapter 7 bankruptcy will stay on your credit report for 7-10 years.
1) Initial Intake with Office Staff
2) Sign Pre-Filing Agreement
3) Accept Invitation to Client Portal from NextChapter
4) Complete Credit Report ($50)
5) REVIEW YOUR CREDIT REPORT
6) Client Uploads Documents to Client Portal
A. Pay Stubs (last 6 months)
B. State and Federal Income Tax Returns
C. Mortgage Statement
D. Copy of Drivers License
E. Copy of Social Security Card
F. Bank Statements (last 6 months)
G. Personal Property Assessment
7) Consult with Attorney
8) Take Credit Counseling Course at Debtor CC (https://www.debtorcc.org/bankruptcy-credit-counseling-course.aspx?ReferralKey=a149d24cd2094cc986950b380e04a785)
A. The credit counseling class MUST be completed before we can file.
9) File Chapter 13 Bankruptcy
A. $320 in filing and processing fees.
B. Bankruptcy petition, schedules, proposed payment plan, and certificate of counseling is submitted.
10) Automatic Stay Kicks In
A. Now creditors can no longer contact you or attempt to collect on your debt.
11) Sign Post-Filing Agreement
A. For 'No Money Down Bankruptcies', payments of $138.50 begin within thirty (30) days of filing, even before plan is confirmed.
12) Bankruptcy Schedules and Chapter 13 Plan Filed
A. Filed with the court and reviewed by the Chapter 13 Trustee.
B. Trustee may request changes before confirmation.
13) Complete Financial Management Course at Debtor CC (https://www.debtorcc.org/bankruptcy-credit-counseling-course.aspx?ReferralKey=a149d24cd2094cc986950b380e04a785)
A. This is REQUIRED before the court will enter a discharge.
14) Complete Meeting of Creditors— 341 Meeting
A. We will meet with the bankruptcy trustee by phone and they will ask a few questions about your petition.
15) Plan Confirmation Meeting
A. Held in court (often within 45-60 days of filing).
B. The judge reviews your plan.
C. If needed— you may amend the plan to meet trustee or creditor objections.
16) Make Plan Payments for 3-5 Years
A. Send monthly payments to the trustee.
B. Maintain post-filing obligations (i.e. car insurance, ongoing mortgage payments, domestic support obligations).
C. Request court approval for major purchases or new credit.
17) Receive Discharge
A. After completing all plan payments and required courses.
B. Remaining eligible unsecured debts are discharged.
18) Case Closes
A. Court issues final decree.
B. Bankruptcy stays on your credit report for 7 years.
Bankruptcy immediately stops a garnishment. In addition, we may be able to get the money garnished from you back, if:
• The money was garnished within 90 days before filing,
• The total amount taken was $600 or more (in total from a single creditor),
• You have an exemption to protect the funds, and
• The garnishment was from a non-priority unsecured creditor,
Student Loans are not automatically discharged in bankruptcy. To discharge student loans you will have to file an adversarial proceeding with the court or an attestation stating that repaying the loans would cause an undue hardship. Most courts use the Brunner Test, which requires showing:
1. You cannot maintain a minimal standard of living if forced to repay,
2. Your financial situation is likely to persist, and
3. You’ve made a good faith effort to repay.
This service is not included in our typical bankruptcy. If you think that you qualify for loan discharge, please discuss it with the attorney during your consultation.
If your car has been repossessed but not yet sold, you can file bankruptcy quickly and request the lender return it.
You Must Still Do the Following:
1. File bankruptcy quickly (before the lender sells it).
2. Show proof of insurance and ability to pay going forward.
3. In Chapter 13, propose a plan to repay the arrears over time.
4. In Chapter 7, reaffirm the loan, redeem the car, or pay off arrears quickly (if the lender agrees).
If the Car Has Already Been Sold:
• You usually can’t get it back, even if you file bankruptcy later.
• But you may no longer owe a deficiency (the remaining balance) if you file Chapter 7 — that debt could be discharged.
Yes, you can usually keep your car in bankruptcy — but it depends on your financial situation, the value of the car, how much you owe on it, and which chapter you file (Chapter 7 or Chapter 13).
Here’s a breakdown of how to keep your car in each type of bankruptcy:
CHAPTER 7:
✅ You Can Keep Your Car If:
1. You’re current on the loan (or close to it),
2. The equity in your car is not more than available exemptions (in Arkansas, up to $1,200 + the $500 wildcard exemption, or Federally $5,025+ wildcard of $1675)
3. You reaffirm (make a promise to continue to pay) the loan or redeem (pay the current value in a lump sum) the vehicle.
4. IF YOU CANNOT PAY THE PAST DUE BALANCE ON YOUR CAR (BEFORE YOUR CASE CLOSES), YOU WILL HAVE TO FILE CHAPTER 13.
CHAPTER 13:
Chapter 13 is more flexible — it's often the best way to keep your car if you’re behind on payments.
✅ You Can Keep the Car If:
• You include the car loan in your repayment plan, and
• You catch up missed payments over 3–5 years
🔑 Additional Benefits:
• You may be able to “cram down” the loan to the car’s current value (if the loan is more than 910 days old),
• Interest may be reduced, and
• Repossession must stop when you file.
SURRENDER - If your car payments are too high, the car is wrecked/needs to be fixed, or you simply do not want the vehicle, you can give the car back and wipe out the loan.
13
CHAPTER 13 BANKRUPTCY
Chapter 13 bankruptcy helps you take control of your debt without losing the things that matter most, especially if you are behind on payments—like your home or car.
If you have regular income, Chapter 13 lets you create a plan to pay back what you can over 3 to 5 years.
You get to keep your property, stop foreclosure or repossession, and catch up on missed payments, all while protecting yourself from creditors. It’s a smart way to get back on track and protect yourself from losing everything you've worked so hard for.
7
CHAPTER 7
BANKRUPTCY
Chapter 7 bankruptcy is a legal way to help people who owe more money than they can pay.
It lets you erase many kinds of debts, like credit cards or medical bills, so that you can get a fresh start. It's like pressing a reset button on your money problems.
You might have to give up some things that you own, like extra cars or land, but you can usually keep the things you need most, like clothes, furniture, and your house or car if you are up to date on payments.
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