Bankruptcy Frequently Asked Questions Answered by Attorney Ike Shulman

Let Attorney Ike Shulman provide the answers to your frequently asked bankruptcy questions and give you proper guidance about your legal concerns. Click on the videos to learn more.

“What Is Bankruptcy?” by Ike Shulman”

“Will My Retirement Accounts Be Protected?”

“Can Bankruptcy Stop Wage Garnishments?”

“Is It Too Soon to Talk to a Bankruptcy Lawyer?”

“Can I Save My Home From Foreclosure in Bankruptcy?”

Bankruptcy Frequently Asked Questions


What is Bankruptcy?

Bankruptcy is a legal process under federal law that allows individuals to wipe out and discharge certain debts that they are unable to pay. All assets and debts must be disclosed in the process. And other financial information must be given. The bankruptcy laws require that all information be truly provided. In Chapter 7 Bankruptcy protected or exempt assets are retained by the debtor. While non-exempt assets are subject to liquidation by a bankruptcy trustee with proceeds paid to creditors. In Chapter 13 Bankruptcy, all assets can be retained but a repayment plan for 3-5 years is also proposed to pay a portion of the debt. The amount to be repaid is different for each case. It is determined by several factors. Including the debtor’s income. The type of debts owed and the value of the debtor’s non-exempt assets. After completing the bankruptcy most debts are discharged and the debtor can get a fresh financial start.

Will My Retirement Accounts Be Protected?

In almost all bankruptcy cases your retirement funds are protected from your creditors. As long as the contributions to your retirement plan remain following IRS rules, those funds cannot be taken from you in bankruptcy. One rare exception to this is if you have an IRA account, it is protected up to a certain amount. Which currently is greater than 1.2 million dollars. Also, if you are repaying loans that you took against your retirement plan, you can continue repaying those loans after your bankruptcy is filed.

Can Bankruptcy Stop Wage Garnishments?

If a creditor is garnishing your wages or taking money from your bank account, a bankruptcy filing can put a stop to that. When you file bankruptcy, it creates an automatic stay, or shield, to protect your wages and property from collections. The stay is effective against most creditors, even the IRS. The collection of support obligations is one exception where bankruptcy protection does not apply.

Is It Too Soon To Talk To a Bankruptcy Lawyer?

I’ve often been asked by clients if it’s too soon to be considering bankruptcy. In most cases, the reality is they’ve already waited to get legal advice way beyond the time when they could make their budgets work. Sometimes waiting to file bankruptcy can be very damaging. Certainly, anyone at risk of losing their home in foreclosure must act before the sale date to find out their options. Also, clients whose wages are being garnished, or are facing a car repossession, should contact a bankruptcy lawyer right away to see if they can avoid further damage. But there are many other situations where clients can benefit if they only knew sooner what are the best steps to take. For example, the client may have a 401k or other retirement plan. Some clients have already borrowed large sums from retirement plans to pay other bills. And now have to repay that debt through large monthly payments. Or, they may have taken an early withdrawal from retirement triggering new tax debts and penalties. If bankruptcy had been used instead to deal with the debt problems, those tax debts could have been avoided and their retirement savings protected and available for their retirement years. I highly recommend that anyone that is experiencing stress from their debt, call a bankruptcy lawyer today. It is not too soon to find out your options.

Can I Save My Home From Foreclosure?

Filing for Chapter 13 Bankruptcy can stop a foreclosure sale and allow a homeowner to catch up on their missed payments through a Chapter 13 payment plan. The bankruptcy filing will stop the sale and the client will need to resume making their monthly mortgage payments after the case is filed. If you are at risk of foreclosure, you should contact a bankruptcy lawyer before the foreclosure sale date, to see how a Chapter 13 Bankruptcy plan can help save your home.