Common Bankruptcy Questions

Financial hardships are overwhelming.  We have complied a brief answer to the most common questions when considering bankruptcy.  Please contact us for a free consultation to discuss your financial situation and if bankruptcy may be right for you.

What is bankruptcy?

Bankruptcy is a legal proceeding in which an individual who cannot pay his or her bills can get a fresh financial start.

What can bankruptcy do for me?

Bankruptcy may make it possible for you to:

• Eliminate your obligation to pay most or all of your debts.
• Stop foreclosure on your home.
• Prevent repossession of a car or other property.
• Stop debt collection harassment or wage garnishment.

What doesn’t bankruptcy do?

Bankruptcy cannot cure every financial problem, nor is it right for every individual.

• Eliminate certain rights of secured creditors.
• Discharge certain types of debt.
• Protect cosigners on your debt.

How often can I file bankruptcy?

You cannot receive a discharge in a Chapter 7 case if you received a discharge under a Chapter 7 case filed in the last eight years or a Chapter 13 filed in the last six years.  You cannot receive a discharge in a Chapter 13 case if you received a discharge under a Chapter 7 case filed in the last four years or a Chapter 13 filed in the last two years.  If didn’t received a discharge in the previous bankruptcy filing, depending on why this is the case, you can file and receive a discharge without any time restrictions.

Can I own anything after bankruptcy?

Yes. Many people believe they cannot own anything for a period of time after filing for bankruptcy. This is not true. You can keep your exempt property and anything you obtain after the bankruptcy is filed. However, if you receive an inheritance, a property settlement, or life insurance benefits within 180 days after your bankruptcy, that money or property may have to be paid to your creditors if the property or money is not exempt.

Will bankruptcy affect my credit?

While bankruptcy will be one of many factors on your credit report for up to 10 years after your case is filed, it does not mean that you will not have credit available to you at that time.  In fact, most people become eligible for credit cards and auto loans immediately after their discharge is entered.  And most mortgage companies are willing to extend a home loan to people 2 years after their bankruptcy.  If your credit is already in poor shape due to delinquent bills, then bankruptcy can actually be the fastest way to improve your credit.