Frequently Asked Questions Regarding Bankruptcy
1. What is bankruptcy?
Bankruptcy is a government approved way to relieve certain people of the personal responsibility of repaying a debt.
Additional FAQs |
2. Will bankruptcy wipe out all my debts?
No. Only certain debts can be wiped out through this method. Other debts such as student loans or recent taxes or debts owed to the government cannot be discharged (or wiped out).
Debt You Can Erase Credit Card Debt |
Debt You Can't Erase Criminal Debts
|
3. What is the difference between Chapter 7 and Chapter 13 bankruptcy?
Chapter 7 allows for discharge in 4 to 6 months (generally), however Chapter 13 involves a payment plan and can last from 3 to 5 years. There are different criteria and limitations in each form of bankruptcy.
4. If I file for bankruptcy, can I keep my property? What can I keep?
It depends. If you are repaying your arrearage in a Chapter 13, you should be able to keep the property. In a Chapter 7, you can keep it if you are up to date on your payments.
You are entitled to certain exemptions. You can work with your attorney to determine what you will be able to keep.
5. Which kind of bankruptcy should I file?
It depends on what you qualify for and what you own.
6. What do I need to begin the bankruptcy process?
You will need to provide a great deal of information to your attorney. This will be used to prepare your petition for filing. Additionally, you will need to pay a filing fee and take a course prior to filing your petition.
7. I have missed a few mortgage payments, is it too late to file for bankruptcy?
It’s not too late to file for bankruptcy. Depending on your intent to keep or surrender your home, you can strategically choose the right time to file for bankruptcy.
8. Do you have to have a certain amount of debt to file?
No. There is no lower limit, but there are upper limits to certain types of bankruptcy.
9. Will my bankruptcy affect my spouses credit? Do we both need to file at the same time?
If you and your spouse share the debt, it may affect your spouse indirectly. You will no longer be responsible for the debt, but your spouse will be entirely responsible for it.
10. Does my divorce decree protect me from creditors if my ex files for bankruptcy?
Absolutely not.
11. Can a co-signor of a loan be responsible for a debt if the other person has declared bankruptcy?
Yes.
12. Do I have to file bankruptcy on all the accounts I owe, or can I keep some?
Once you file, most creditors will receive notice or hear about your bankruptcy. Whether you list them or not, they may still revoke your line of credit.
13. Will I lose my retirement accounts or payments from social security?
Usually you will not lose your retirement accounts if they are truly retirement accounts that can be protected. Social security funds will depend on which Chapter you file and your particular circumstances.
14. How long does a bankruptcy stay on my record?
10 years.
15. Can I do anything to remove a bankruptcy from my credit report?
NO. Only time will remove the bankruptcy.
16. Does a bankruptcy improve my credit rating? How long before I can apply for credit again?
Depending on your credit rating, it may improve it. You can apply for a credit card at anytime after you file. It will be at the creditor’s discretion on when you will be approved.
17. Can a creditor continue to contact me after I've filed for bankruptcy?
NO.
18. Should I let my creditors know I've filed for bankruptcy?
Yes, or you can wait until they receive notice from the court.
19. When should I stop using my credit cards if I'm planning on filing for bankruptcy?
At least 90 days prior to filing.
20. Can I file for bankruptcy on my own?
Absolutely. But I don’t recommend it because it could cost you a lot more than what you would pay a professional to do.
21. Have more bankruptcy questions? Ask your question below: