What is bankruptcy?
Bankruptcy is a court process by which an individual or business seeks
to discharge or re-organize their debt.
Bankruptcy provides a legal remedy to overwhelming debt. For individual
debtors, bankruptcy can protect your assets, save your home from foreclosure,
and is most often more affordable than debt settlement or negotiation.
Will filing for bankruptcy ruin my credit?
No. While bankruptcy will be a negative on your credit report, most people
are surprised by how quickly their credit rebounds. Bankruptcy is not
a bar from obtaining credit in the future, rather it will be one factor
your bank uses to determine if they wish to extend you credit. Many debtors
are able to get new credit cards and car loans within a month or two of
filing for bankruptcy. It will likely take 1-3 years to get a new home
mortgage after filing.
My house is in foreclosure. Would filing for bankruptcy help?
Yes, bankruptcy can stop foreclosure and eliminate second mortgages. If
you are facing foreclosure, the longer you wait to address the situation
the more difficult it becomes. As soon as you know you are having problems
paying your mortgage, call Kovacs Law, P.C. for a free consultation.
Can creditors still contact me after I file for bankruptcy?
No. As soon as you file bankruptcy your creditors are stayed (legally barred)
from contacting you. There will be no more harassing phone calls after
your case is filed with the court.
How long will a bankruptcy stay on my credit report?
Chapter 7 bankruptcy will be listed on your credit report for 10 years
and Chapter 13 will be listed for 6 years. However, having a bankruptcy
listed on your credit report is not a bar from receiving new credit. Most
debtors are able to obtain car loans and new credit cards in 1-2 months
after filing bankruptcy.
What types of debts can be discharged through bankruptcy?
Most debts are discharged in bankruptcy. There are a few types of debts
that do not get discharged, including most taxes, child support, alimony,
and student loans.
If I file for bankruptcy does that mean my spouse has to file as well?
No. If you are married, you can either file as an individual or as a married
couple. The advantages of filing as a married couple include saving money
on legal fees, court filing fees, and counseling fees, as well as eliminating
all the debt for your entire household rather than just one spouse. The
advantages of filing as an individual include that the non-filing spouse's
credit will not be negatively impacted.
Will I lose my house or my car?
You can keep your car, house, and all your assets in bankruptcy. In fact,
many people who file bankruptcy do so to protect their home, car, and
other assets from creditors.
Can bankruptcy protect me from wage garnishment?
Yes. If you are currently under a wage garnishment, fling bankruptcy will
stop the garnishment as soon as the case is filed. If you are being threatened
with a wage garnishment, bankruptcy will prevent your creditors from ever
attaching your wages.
I have been sued over a debt. What should I do?
You may have legal defenses to the lawsuit, including laches and the statute
of limitations. Additionally, you may have counter claims against the
Plaintiff that entitle you to collect money damages. Bankruptcy may also
be an alternative. Bankruptcy will stay or stop the lawsuit as soon as
your bankruptcy case is filed.
Our Blog for More Frequently Asked Questions