Bankruptcy questions can be difficult to answer when you are just starting out in the process. This article is designed to answer the most common bankruptcy questions with some common general answers to help give you a starting and to put your mind at ease. Whether you are filing a chapter 13 bankruptcy or a chapter 7 bankruptcy, the information in this article will be very important to become familiar with. Dealing with Bankruptcy companies and attorneys does not have to be scary. Here are some of the most common questions about bankruptcy.
If I File Bankrutpcy How Will My Spouse Be Effected?
This is one of the most common questions about filing bankruptcy for a married couple. Your husband or wife will not be affected by your personal bankruptcy if they are not responsible for the debt that is being discharged. The easiest test for this would be if they signed for the debt with you. If they did not sign, then they should not be impacted by the bankruptcy.
Be careful here because you may have put them on as an additional card user when you got married if it was a debt you brought in from before you got married. If you added a spouse to a credit card for example, make sure that that spouse is not legally responsible for the debt before you file. This is a common mistake people make when only one spouse files. Come later on, when the other spouse applies for credit and gets denied - this is often the reason for being denied so pay close attention to this.
The only difference to the above answer would be in a community property state. Either spouse could contract for a debt liability without the other spouse signing the agreement and it would obligate the marital community or community property in this case. There are a few exceptions however, one would be in regard to the purchase of real estate. This exception would require both spouses signatures on the contracts. Debts such as credit cards, unsecured loans and other debts do not require signatures of both spouses to be signed. Your bk lawyer will need to guide you through this aspect.
Can I Get The Creditors To Stop Harassing Me?
The simple answer is yes. By law, because of something called an Automatic Stay, all creditor actions against you must cease and desist once your bankruptcy documents are filed with the court. Creditors cannot start or continue any lawsuit. There are some limits and exceptions to this rule if you are in the process of being evicted by a landlord and if you are already pretty far along in a foreclosure proceeding. Another exception to this rule is if you have already file a bankruptcy which has been dismissed. See What debts can be discharged and what debt cannot be discharged for more information on creditors and debt.
What Does It Cost To File A Chapter 7 Bankruptcy?
Depending on the state, it usually costs about $300 to file and attorney fees range anywhere from $1000-$2000. You can usually get an attorney to give you a free consultation to go over the process of bankruptcy with you. They may even give you an idea about what type you may have to file. You can keep your fees down by not having the attorney attend all of the creditor meetings. Some states do not have this option and they must attend with you. Massachusetts for example, lawyers must attend a Section 341 meeting with you and your creditors.
Do I Have To Go To Court For Bankruptcy?
Well, technically not always to file, but most likely you will end up in front of the bankruptcy trustee (judge) to either file or answer to your creditors at the creditor meeting. Now, don't let the creditor meeting get you. You won't be interacting with the creditor - they interact with the trustee and the trustee interacts with you. In many cases, creditors do not show up, which doesn't necessarily mean anything because they could have sent in written correspondence to the bankruptcy trustee. But you are still required to go.
At the creditor meeting, the trustee will most likely ask you questions about your filing if they have any. They might ask you to explain what happened that has you have to file for bankruptcy. They also might ask you to offer what have you learned from your mistakes in the past. Be prepared to answer these types of questions. One suggestion, don't make it a sob story - just tell the facts - the truth. Everybody has a sob story and the trustee has heard everyone. So just be straight and things will go much better for you.
Will People Know That I File For A Chapter 13 or Chapter 7 Bankruptcy?
It is possible that they can find out. Bankruptcy filings are public and posted in the newspaper and online in some municipalities. However under typical circumstances nobody in real life spends time looking at bankruptcy filings everyday. The credit bureaus can report it on your credit report for up to 10 years. So when someone pulls your credit report it will be on there, so do not be surprised. Also, be prepared for the onslaught of bankruptcy associated junk mail. Marketing companies of all kinds to pay for the lists of people who have filed for bankruptcy and mail every imaginable thing to you to help you recover, get credit, buy a home, etc. In time the volume will die down, but don't be surprised if years later something shows up in your mailbox referencing your bankruptcy.
Can I Get New Credit After Bankruptcy?
Without a doubt you will be able to get credit after a bankruptcy. Many banks offer secured credit cards which work just like a debit card. You need to put money into the account and you can then use it just like cash. 4 The credit limit for a secured credit card is usually equal to the security given and is increased as the debtor demonstrates the ability to repay the debt. After two years from the filing date you will be able to qualify for a Fannie Mae and Freddie Mac Conventional Loan. The farther away in time you move away from the BK, the less impact it has on your score. Check out our section on Credit Card Offers.
Bankruptcy is not a death sentence. There is life after a bankruptcy. Keep your chin up because today is a new day.
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