Bankruptcy FAQ: Answers to Common Questions About Filing for Bankruptcy

Bankruptcy can be a complex and intimidating process for those who are struggling with debt. There is often confusion surrounding the procedures, implications, and potential outcomes of filing for bankruptcy.

This article aims to provide answers to some of the most frequently asked questions about bankruptcy to help you better understand your options and make informed decisions.


What is bankruptcy?

Bankruptcy is a legal process that allows individuals or businesses struggling with unmanageable debt to seek relief and have a fresh financial start. The goal of bankruptcy is to allow the debtor to eliminate or restructure their debts while providing creditors with a fair opportunity to recover some of the amounts owed.


What are the different types of bankruptcy?

There are several types of bankruptcy, but the most common ones for individuals and businesses are:

  • Chapter 7: Known as “liquidation” bankruptcy, this is the most common form for individuals. It involves the sale of non-exempt assets to pay off creditors, with remaining eligible debts being discharged.
  • Chapter 11: Primarily used by businesses, this “reorganization” bankruptcy allows a company to restructure its debts and continue operating.
  • Chapter 13: This “wage earner’s plan” is for individuals with a steady income, allowing them to create a repayment plan to pay off all or a portion of their debts over a period of 3-5 years.


How do I know if I should file for bankruptcy?

Filing for bankruptcy should be considered when your debts become unmanageable and other options such as debt settlement, consolidation, or negotiation are not viable. Before deciding, consult with a bankruptcy attorney to review your financial situation and determine if bankruptcy is the most suitable solution for your circumstances.


Will I lose all of my assets if I file for bankruptcy?

Not necessarily. In a Chapter 7 bankruptcy, certain assets are exempt, meaning you can keep them. Exemptions vary by state and may include items such as your primary residence, a certain amount of personal property, or a vehicle. In a Chapter 13 bankruptcy, you generally keep all of your assets as long as you adhere to the repayment plan.


How does bankruptcy affect my credit?

Bankruptcy will have a negative impact on your credit score. A Chapter 7 bankruptcy will remain on your credit report for ten years, while a Chapter 13 bankruptcy will remain for seven years. However, the impact of bankruptcy on your credit score lessens over time, and you can take steps to rebuild your credit after filing.


Can bankruptcy eliminate all of my debts?

While bankruptcy can discharge many types of debts, there are certain debts that cannot be eliminated. These non-dischargeable debts include student loans (except in rare cases), child support, alimony, and certain taxes.


What is the cost of filing for bankruptcy?

The cost of filing for bankruptcy includes court filing fees and attorney fees. For Chapter 7, filing fees are approximately $335, while Chapter 13 fees are around $310. Attorney fees vary based on your location and the complexity of your case.


How long does the bankruptcy process take?

The duration of the bankruptcy process depends on the type of bankruptcy you file. A typical Chapter 7 case takes 4-6 months from filing to discharge, while a Chapter 13 case lasts for the duration of the 3-5 year repayment plan.



Filing for bankruptcy is a significant decision with long-lasting implications. Understanding the process and potential outcomes is essential to making the best choice for your financial future. If you have further questions or need guidance, it is recommended to consult with a bankruptcy attorney to navigate your specific situation.


Learn More

At Blue Bee Bankruptcy, our lawyers are highly experienced in bankruptcy options. More importantly, we understand that each case we receive is unique and each client has different needs and goals. We will discuss these signs with you and decide the best route to take.

We strive to help our clients rebuild their lives and take steps toward a better financial future through filing. 


Best Bankruptcy Attorneys in Salt Lake City


If you’re dealing with the potential of bankruptcy, give us a call. Our team will work to help you by reviewing all of the options our firm has available. We will ensure you’ll get the best possible outcome for your situation.

Get in touch today so we can start working on either halting bankruptcies or preventing them from taking place altogether!

Contact Us Today For Help! You can schedule your free consultation online or call us at (801) 285-0980.


Blue Bee Bankruptcy Law Firm

Rebuild Your Life After Bankruptcy
Get FREE information on rebuilding your credit.
Start Today