Frequently Asked Questions

Individuals who receive a discharge in bankruptcy can expect to be relieved of all personal liability on most debts, such as:

• secured debts like home mortgages and car loans, and
• unsecured debts such as credit card expenses and medical bills.

The exceptions to this rule are addressed in the answer to the next question.

Common debts for which a person remains liable even after bankruptcy include:

• “Domestic support obligations” (like alimony and child support)
• Most other obligations to a spouse, former spouse, or child arising out of divorce or similar court action
• Many tax obligations (including income tax obligations less than three years old)
• Most student loans (with some exceptions)
• Debts that arise from fraud, some criminal acts, and drunk driving accidents

In most cases, student loan debt cannot be discharged in bankruptcy. Debtors who can prove that excepting their student loan debt(s) from discharge would result in an undue hardship on them or their dependents might be able to get a discharge of student loan obligations. However, the Bankruptcy Courts have been very strict in applying the “undue hardship” standard and exceptional circumstances are generally required for such cases to succeed, and an action to secure a discharge of student loan debt is never included in the cost of a standard bankruptcy filing.

For most individuals, there are no adverse tax consequences from filing bankruptcy. On the other hand, there can be adverse tax consequences from negotiating debt forgiveness with creditors outside of bankruptcy. For this reason such agreements should never be entered without first securing the advice of competent legal counsel.

If you have questions about the tax consequences of bankruptcy or debt forgiveness/settlement, contact Kidwell Law Office to set up a free consultation.

Child support and alimony payments will continue to be your responsibility after you file for bankruptcy.

Every debtor who files bankruptcy is required to attend a 341 hearing, also known as the meeting of creditors. In the pre-pandemic world the meeting of creditors took place at a federal building between 21 to 40 days after your bankruptcy is filed, and was presided over by a bankruptcy trustee or a trustee’s representative. With the onset of the pandemic these meetings began to be held by telephone or videoconference, and that is likely to continue for the foreseeable future.

The meeting permits the trustee (or representative) to review the debtor’s petition and schedules and question the debtor under oath regarding their assets, liabilities, and other matters that pertain to their bankruptcy case. In addition, the trustee (or representative) will ask questions to ensure that the debtor understands the bankruptcy process.  

The 341 hearing is also an opportunity for creditors to ask you questions about your assets or other matters pertaining to your case. Creditors are not required to attend these meetings, however, and in most cases do not attend them.

The meeting usually lasts between five and fifteen minutes and may be continued if the trustee (or representative) is not satisfied with the information presented.

If the debtor fails to appear and provide the information requested, the trustee (or representative) may request that the case be dismissed, or may seek other relief against the debtor for failure to cooperate. If the case involves spouses filing jointly, both spouses must appear at the meeting of creditors.

You will be required to bring the following to your meeting of creditors (341 hearing):

• Photo ID
• Social Security card 
• Most recent pay stub

Hiring an experienced bankruptcy lawyer to represent you is the best way to ensure that your 341 hearing – and the entire bankruptcy process – goes smoothly.

Bankruptcy:

• Chapter 7: for uncomplicated cases, I generally charge a flat fee of $2,000
• Chapter 13: for uncomplicated cases, I generally charge a flat fee of $3,200. Legal fees are higher for Chapter 13 than for Chapter 7 because filing a Chapter 13 case is more complex.

However, total attorney fees will depend not only on the type of bankruptcy to be filed but also on the complexity of your case.

Litigation:  I am willing to discuss accepting cases under fee arrangements involving a contingent fee, an hourly fee, or a combination of hourly and contingent.