There is so much false information out there about bankruptcy. Many of the myths that exist arise when people consult well-meaning friends and relatives or are created by creditors trying to steer you away from bankruptcy. When you are considering filing bankruptcy, you need to consult with an attorney. Do not compare your possible case with the experiences of others. Every person’s situation is different. Those differences may cause variances in your bankruptcy case. Below are answers to some common questions that we receive at our office.
Will I Be Able to Obtain Credit Again?
Filing bankruptcy will actually provide you a new opportunity for credit. By filing bankruptcy you are wiping your financial slate clean. If you are keeping any assets that have an installment payment, like a car, making timely payments will start generating a good credit history right after you file. Some creditors will actually send you credit card offers shortly after your discharge is entered.
How Many Times Can a Person File For Bankruptcy?
You can file bankruptcy many times. There are, however, rules that limit how often you can file. You can only file Chapter 7 once every eight years. You can file Chapter 13 every two years. If you filed a Chapter 7 and want to file Chapter 13 you must wait six years. If you filed a Chapter 13 and want to file a Chapter 7 you must wait four years. If you filed a bankruptcy case that was dismissed, the above time restrictions do not apply.
Can I Still File For Bankruptcy With the Law Change?
Law changes have imposed some additional requirements. If you hire an experienced bankruptcy attorney, you will not even notice the difference. In most cases, your ability to file bankruptcy is unchanged.
Can I Discharge My Taxes in a Bankruptcy?
You can discharge income taxes that are more than three years old. There are other requirements that must be met, but if you owe taxes, you filed the tax return and more than three years have passed, you can discharge the taxes. Certain taxes, such as sales tax and employer trust fund taxes, cannot be discharged.
Do I Have to File Bankruptcy with my Spouse?
Married people can file together or separately. In most cases spouses file together, but there may be occasions when separate filings are required or advantageous. There also may be occasions when only one spouse needs to file bankruptcy.
Does Bankruptcy Make Me a “Bad Person?”
Financial problems are caused by many different reasons – a job loss, medical illness or divorce. Bad things can happen to good people. Bankruptcy is the legal process that gives you an opportunity to get a fresh start that you cannot obtain otherwise.
Can You Pick and Chose Which Debts to Discharge?
You are required to list all of the debts that you owe and all of the assets that you own. Even if you want to continue to pay a debt you must list it. If you want to pay a debt after your case is over you can voluntarily do so, but you are not obligated to do so.
Will I Still Be Harrassed By Creditors?
When you file bankruptcy, an automatic stay is in place that prevents creditors from taking further actions without the court’s permission. Creditors are also not allowed to contact you about a debt. When your discharge is entered, creditors are not allowed to contact you anymore about your discharged debts. If creditors do contact you in violation of the law, the creditor may be held in contempt and be required to pay damages as a result.
What About Family Trouble After Filing for Bankruptcy?
Bankruptcy is actually a way that you can eliminate stress in your family relationships. Financial problems cause anxiety and certainly can strain your relationships. If you file bankruptcy and discharge your debts, you eliminate the financial problems that are causing the stress.
How Do I Repair My Credit After Bankruptcy?
1. Open a checking or savings account and start saving money. This shows lenders that you are responsible.
2. Apply for store and gas credit cards. These cards generally have lower limits to get you started.
3. Get a secured card where you deposit cash and charge against it. Get a secured card with creditors that report to the major credit reporting agencies.
4. After you file, pay what bills you do have – rent, utilities, a car payment – on time. Paying timely is crucial.
5. Find a friend or relative to cosign for you on a loan and pay it on time. It takes longer to rebuild credit if you do not have an installment payment.
6. Look for car dealers and mortgage brokers that claim to be “bankruptcy friendly”.
7. Stay away from payday loans and finance companies that are at high interest rates.
8. Live within your means. If you don’t have the money . . . don’t spend it!