Here you will find some general answers to some common questions. Please be aware that these are GENERAL answers, and as such, are not intended to substitute as legal advice. Your particular circumstances are unique and should be reviewed with an attorney. If you have more questions, contact us to request a FREE consultation.
What is a secured creditor?
A secured creditor is one that has a right to take some or all of your property without taking you to court if you fail to make your payments. Two examples of secured creditors include your car loan (the creditor could repossess the car if you fail to pay) and your “friendly” finance company with whom you listed your household good as collateral in order to borrow money for last year’s vacation.
If you want to keep property which is secured by a creditor’s claim, you must agree to pay the creditor. You can agree to keep making your payments on the debt until it is paid in full, or you can pay the creditor the amount the property is worth. If you put up your household goods as collateral for a loan, you can usually keep your property under Chapter 7 without making any more payments on the debt.
What is an unsecured creditor? An unsecured creditor is one to whom you owe money but for which you have not made a written promise to give up any of your property or to return an item if you do not pay the debt. Examples of unsecured debts are medical bills and most credit cards. Generally, unsecured debts are discharged in chapter 7 and can be paid pennies on the dollar in Chapter 13.
What is discharged? If everything goes normally in a bankruptcy case, the final action the court takes is to grant you a DISCHARGE, which excuses you from paying all of your debts (except possibly for a few mentioned above). The discharge order also forbids creditors from doing anything to try to collect a debt that has been discharged.
The court can refuse to grant a discharge, but only in very limited cases if you have done something improper, such as trying to cheat a creditor by hiding your property, giving false information to the court, refusing to obey a court order, etc.
Will bankruptcy wipe out all of my debts?
Yes, with some exceptions. Bankruptcy will not normally wipe out:
What else must I do to complete my case?
After the bankruptcy is filed, you must complete an approved course in personal finances. This course will take approximately two hours to complete. This office has a list of organizations that provide approved courses, or you can check the website for the United State Trustee Program office at www.usdoj.gov/list. In a Chapter 7 case, you should sign up for the course soon after your case is filed. If you file Chapter 13, you should ask the attorney when you should take the course.
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! However, if you receive an inheritance, a property settlement, or life insurance benefits, that money or property may have to be paid to your creditors if:
How will bankruptcy affect my credit?
There is no clear answer to this question. Unfortunately, if you are behind on your bills, your credit may already be bad. Bankruptcy will probably not make things worse. The fact that you’ve filed a bankruptcy can appear on your credit for 10 years. Because bankruptcy wipes out your old debts, you should be in a better position to pay your current bills and start a regular savings plan, which is one of many factors for creditors to consider when you apply for future credit. After bankruptcy, lenders must be convinced that you are able to repay their loans. Another positive influence is the ability to make a down payment when applying for a loan.
Once I receive my discharge, must the credit bureau stop reporting the debts that were discharged in bankruptcy?
NO. Under the Fair Credit Reporting Act, a credit bureau is not obligated to remove the debts discharged in bankruptcy. However, in order to ensure accuracy and completeness, the credit bureau should indicate that the debts reported have been discharged in bankruptcy if that is the case.
Will bankruptcy affect my co-signer?
YES. A discharge in bankruptcy applies only to the debtor, therefore you co-signer will be responsible for any debt you are released from in bankruptcy. However, if you file under Chapter 13, you can agree to pay the debt and protect your co-signer.
Other Information:
Utility Service A public utility, such as an electric company, cannot cut off service because you have filed for bankruptcy. However, they can require a deposit for future service.
Discrimination: An employer or government agency cannot discriminate against you because you have filed for bankruptcy.
Driver’s License: If you lost your license solely because you couldn’t pay court-ordered damages caused by an accident, bankruptcy will allow you to get your license back.
The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you free information about our qualifications and experience. We are a debt relief agency providing legal assistance to consumers seeking relief under the Bankruptcy Code.