Have you ever wondered if bankruptcy might be a good option for you to regain your financial footing? Do you have questions about how bankruptcy works in Idaho? This information below guides you through some of the information you need to know in order to make an informed decision about whether bankruptcy is right for you. 

In addition to the attached Bankruptcy Basics guide, Idaho Legal Aid Services has created an Understanding Bankruptcy in Idaho video in both English and Spanish.

If you are low income and would like more information about bankruptcy, please contact your local Idaho Legal Aid office. 

If you need to file Chapter 7 bankruptcy, you may be able to file your bankruptcy through Upsolve. Upsolve is a national non-profit that helps people file for Chapter 7 bankruptcy at no cost. Read about whether Chapter 7 bankruptcy is right for you and visit Upsolve’s web site, upsolve.org, to see if you qualify.

The Federal Trade Commission has created guidance for consumers on whether debt relief or bankruptcy may be right for them. Debt got you down? You’re not alone. Consumer debt is at an all-time high. Whether your debt dilemma is the result of an illness, unemployment, or simply overspending, it can seem overwhelming. In your effort to get solvent, be on the alert for advertisements that offer seemingly quick fixes. While the ads pitch the promise of debt relief, they rarely say relief may be spelled b-a-n-k-r-u-p-t-c-y. And although bankruptcy is one option to deal with financial problems, it’s generally considered the option of last resort. The reason: its long-term negative impact on your creditworthiness. Bankruptcy information (both the date of your filing and the later date of discharge) stays on your credit report for 10 years, and can hinder your ability to get credit, a job, insurance, or even a place to live. 

For more information, please visit their website at: https://www.consumer.ftc.gov/articles/0084-debt-relief-or-bankruptcy

Corporations and partnerships must have an attorney to file a bankruptcy case. Individuals, however, may represent themselves in bankruptcy court. While individuals can file a bankruptcy case without an attorney or "pro se," it is extremely difficult to do it successfully. 

For more information, please visit this U.S. Courts guide on filing without an attorney.

Be forewarned, the following journey through Chapter 7 bankruptcy law is a bit technical, so if you are considering filing for Chapter 7 bankruptcy, consider consulting with a bankruptcy attorney first. For more information, visit the National Bankruptcy guide on how Chapter 7 bankruptcy works.

Chapter 11 allows for reorganization that usually involves a corporation or partnership. For more information, visit the U.S. Courts bankruptcy basis for Chapter 11 bankruptcy.

A common question is whether or not a debtor can keep a credit card after filing for bankruptcy protection and do I have to list the cards I want to keep. If you owe a balance at the time the bankruptcy petition is filed, you must list the debt. This applies regardless of the amount of the debt. If you are worried that you cannot live without a credit card there are a few options. A credit card with a zero balance does not need to be listed and can be used after you file the bankruptcy petition. If you have a card with a low balance, you should pay it off before filing for bankruptcy. However, be careful not to use balance transfers to pay off the card as the transaction could be undone by the trustee or challenged by the creditor if it is determined that the transfer was fraudulent.

NOLO has created an excellent overview of this information as well.

Student loans are difficult, but not impossible, to discharge in bankruptcy. To do so, you must show that payment of the debt “will impose an undue hardship on you and your dependents.” 

To learn more, visit the Student Loan Borrower Assistance website.

A garnishment is basically a legal collections tool where a creditor obtains a court order compelling an employer to withhold a portion of an employee’s wages. The amount that can be withheld is capped at 25%, however, the percentage may vary depending on the state issuing the garnishment and the type of debt. The cap applies to all creditors, meaning 25% is the most that can be withheld at any one time. Garnishments, however, are not limited to wages and can involve one time garnishment of bank accounts or personal property. Whether or not bank accounts, personal property or tax returns can be garnished will depend the individual state.

More information can be found by visiting NOLO's guide on garnishments and bankruptcy.

The National Consumer Law Center (NCLC) has created Consumer Advice for Dealing with Debt Collectors. Their webpage covers the following information: 

• Do Not Let Collectors Pressure You
• What Collectors Can Legally Do to Collect on a Debt
• Nine Ways to Stop Debt Collection Harassment
• Illegal Debt Collection Conduct 

This webpage also includes example Cease and Desist or Stop Contact Letters, Exempt Income Letters, Dispute Letter, and Verification Letter to debt collectors. 

Visit the links above or go to https://library.nclc.org/consumer-advice-dealing-debt-collectors%E2%80%94including-new-federal-rules for more information.

If debt is piling up, it's important to remember that you're not alone and that you still have options. Surviving Debt is a free, plain-language guide from the National Consumer Law Center (NCLC) that walks you through practical steps to protect yourself, understand your rights, and decide what to do next. 

Surviving Debt includes clear, actionable information on many of the situations people face when money is tight. Topics include: medical debt and dealing with bills and collectors; credit card debt and choosing what to pay first; student loans (including major recent changes and cancellation options); car repossessions; evictions, rental debt, and getting out of a lease; and bankruptcy information. 

It also links to helpful companion resources, like sample letters (including a “stop contact/cease” letter) and other tools you can use. To access it online, you can read it directly on NCLC’s site using their website's direct link.