Are some of my debts non-dischargeable?
Some kinds of debts are non-dischargeable, meaning you'll remain obligated to repay them even after you complete your bankruptcy. Examples of non-dischargeable debts are certain state and federal taxes, student loans that are at least 7 years old, and debts that were induced or extended by fraud.
If you have the kinds of debts mentioned above, it's better to have them reviewed by an attorney before filing. This way you can be assured that you're choosing the most appropriate form of bankruptcy for your debts.
Will filing bankruptcy stop my bill collectors from taking action?
Yes. When you file bankruptcy, federal law imposes an "automatic stay," which precludes your creditors from taking any action to collect debts against you, including court judgments and tax debts during the pendency of the bankruptcy. For instance, if you have been served by one of your creditors to appear in court over a debt, the bankruptcy filing will stop this lawsuit. Any wage garnishments or repossession efforts are also halted.
However, once the bankruptcy is over, a creditor holding a claim that was not discharged may proceed to collect on the debt. Also, under some circumstances, a secured creditor may proceed to collect on the lien he has on the filer's assets during the bankruptcy proceeding, but may only do so by filing a court motion and by getting the approval of the bankruptcy court first.
How quickly will my creditors get notice of my bankruptcy?
Within a couple of weeks of the filing of your petition, the bankruptcy court clerk mails your creditors notice of the filing and the imposition of the automatic stay. Until the creditors get notice, it may be necessary for you to supply the creditor with the docket number and date of your bankruptcy. Once they have been given notice, they must stop collection efforts against you or may be liable for court sanctions. Thankfully, for the vast majority of people, once their bankruptcy petition is filed, that's the last they hear from their unsecured creditors.
Do I have to pay my bills during the bankruptcy proceeding?
Generally, the answer is no. For specific property (usually secured) such as your car loan or your house's
mortgage that you plan on keeping, you should continue to make payments. You should also continue to pay for your day-to-day expenses such as rent and utilities. You should stop making payments on other old debts incurred prior to the bankruptcy, such
as credit card debts.
How long does a bankruptcy take?
For a typical Chapter 7 case, the discharge of your debts usually takes approximately 3 to 4 months. A Chapter 13 takes anywhere from 3 to 5 years.
Will I lose my car and my house?
As long as you continue to keep up with your payments on the loan that secures the property, there shouldn't be a problem keeping your house or car, even after the bankruptcy proceeding is concluded. If you want to play it safe, contact your creditor to reaffirm the debt directly. This reaffirmation agreement must then be filed and approved by the court.
Will bankruptcy devastate my credit rating?
Although the record of filing bankruptcy may technically stay on your credit for up to 10 years, often by making payments on time subsequent to your bankruptcy you
can regain an "A" credit rating within 2 years of your discharge.
Ironically, in many cases, filing bankruptcy may actually help your credit rating because discharging
your debts greatly improves your debt-to-income ratio. This is a major criterion the creditors use in judging your "creditworthiness." In fact, many people report a flood of pre-approved credit cards within weeks of a bankruptcy discharge.
By all accounts, bankruptcy no longer has a stigma attached to it that it once did. Perhaps this is one of the reasons that the number of filings has been dramatically increasing over the last several years.
Can I keep any of my existing credit card accounts?
The credit card accounts for which you have a zero balance may not get notice of the bankruptcy proceeding and thus you may be able to keep your account intact. If you do have an outstanding balance when you file, you may still be able to keep your account. To do this, you usually must agree with the creditor to pay off the balance. Once you make an agreement with the creditor, you must file the "reaffirmation agreement" and get the approval of the bankruptcy court. It is advisable to consult legal assistance
before you reaffirm an otherwise dischargeable debt. Some creditors will allow you to get a new account with them by reapplying
them even though you discharged their debt in the bankruptcy.
How do I know if it's time for me to file?
If your creditors are attacking your assets and income and you are in debt way over your head, look into the "fresh start" filing bankruptcy may be able to provide. The stigma attached to filing bankruptcy has greatly diminished over the last decade because a fast-increasing percentage of the population file
Is it smart to hire a bankruptcy petition preparer
to help me file my bankruptcy petition?
It depends on your case. However, the facts are that the vast majority of bankruptcy cases could have been successfully handled without an attorney. Accordingly, you could save hundreds of dollars or more by using a service such as ours to help you prepare your petition instead of a lawyer.
Will everyone find out about my filing?
Not unless you tell them or they go out of their way to check the public records. Bankruptcy filings are not normally published in newspapers. Therefore, the only people who usually find out are your creditors whose debts you have listed on the petition.
Can I be fired for filing bankruptcy?
No. If your employer finds out about your bankruptcy, it is against federal law to discriminate against someone for filing bankruptcy.
What happens after I file for bankruptcy?
In most cases, completing and filing your petition is the hardest part. If your bankruptcy petition doesn't raise any red flags for the trustee or your creditor(s), you're usually in good shape. Approximately 30 to 40 days after filing the petition, you're required to attend the First Meeting of Creditors or "Section 341(a) Examination."
At this meeting, creditors are given the opportunity to ask you questions. There's no judge for this hearing, just the trustee in charge of your case. However, in most "no asset" cases, rarely do creditors show up for this hearing. Typically, there's a room full of other filers and the questioning by the trustee is very limited since they're usually pressed for time. In most cases, the key to your case's success lies in your bankruptcy petition. Normally, 3 to 4 months from the time the petition is filed, you are granted the final discharge of your debts.
Can I run up my credit cards right before I file bankruptcy?
No. Running up your credit cards on the eve of bankruptcy in anticipation of filing may cause your debt to be non-dischargeable on the grounds of fraud, and you can be fined. You should get legal advice concerning large amounts of credit card debt incurred for "luxury goods" right before your bankruptcy.
Do I have to list all of my assets on my petition?
Yes. Knowingly and fraudulently concealing your assets from the bankruptcy court is a felony and the court has the power to fine you and deny you a discharge. Most bankruptcy cases are considered "no asset" cases because
state or federal exemptions protect all of their property.