Expert: Terry Leeders - 2/1/2009

Question
I am considering Chapter 7 Bankruptcy, if I go ahead with the process what will happen if my case is not discharged? Can the trustee ask me to hand over my 2008 income tax refund?

When will I be considered Bankrupt?
I have also been told that if I go ahead and file I can stop making payments on my debts, can my credit card company and others call me at work?, if this legal? I know they will call me at home.

Answer
The date the case is filed is the effective date of the filing.  The official discharge is entered about 90 days later, but the date of filing is when you are considered 'bankrupt.'

I advise most clients to stop using and paying their credit cards.  There are some situations that it could be advisable to keep paying, mainly if there was recent usage on the accounts. Speak to a local attorney to get specific advice here

It depends on how large your refund is, what jurisdiction you file in, and what state exemption protections your state offers as to the tax refund. Speak to your local bankruptcy attorney about that as well.

Most attorneys will accept creditor phone calls for you, so if/when you stop paying, you can refer them to your lawyer to keep them off of your back.