Answers To Worrying Questions
Are There Alternatives To Bankruptcy?
Yes. Sometimes payment plans can be negotiated with creditors in the context of an out-of-court workout of your debts. Obtaining loan extensions, compromises and workout agreements require negotiation skills and experience. These alternatives may alert your creditors to the existence of nonexempt property that the creditor could reach and can involve considerable expense. You also have the option of doing nothing. In any event you should seek professional advice in dealing with most of these alternatives.
What Happens To My Personal Property, Real Property And Other Assets?
Generally, all of the property you own at the time of the bankruptcy filing you continue to possess, but it becomes the property of the bankruptcy estate. Certain property is exempt and you will be able to keep that property. Often, all of your assets can be protected.
What Is The “Automatic Stay?”
At the moment a bankruptcy petition is filed, your creditors are automatically restrained from taking any action to collect the debts owed them. There are some exceptions; for example, a bankruptcy petition does not stay the commencement or continuation of a criminal action, an action to collect spousal support, or an action to enforce a government’s police or regulatory power.
Will My Creditors Stop Harassing Me?
Yes, they will! By law, all actions against a debtor must cease once the documents are filed. Creditors cannot begin or continue any lawsuits or even telephone calls demanding payments. However, secured creditors such as banks holding, for example, a lien on a car, will get the stay lifted if you cannot make payments.
Will My Spouse Be Affected?
Your wife or husband will not be affected by your bankruptcy if they are not responsible (did not sign an agreement or contract) for any of your debt. If they have a supplemental credit card they are probably responsible for that debt.
However, in community property states, either spouse can contract for a debt without the other spouse’s signature on anything, and still obligate both spouses. There are a few exceptions to that rule, such as the purchase or sale of real estate; those few exceptions do require both spouses’ signatures on contracts. But the day-to-day debts, such as credit cards, do NOT require both spouses to have signed.
Who Will Know?
Bankruptcy filings are public records. However, under normal circumstances, no one will know you went bankrupt. The Credit Bureaus will record your bankruptcy and it will remain on your credit record for 10 years.
Can I Keep Any Credit Cards?
Whether a debtor keeps credit cards after filing bankruptcy is up to the credit card company. If you are including the credit card in your bankruptcy, they will cancel the card less you reaffirm (choose to pay) the debt. Even if you have a zero balance the credit card company might cancel the card.
Will I Ever Get Credit Again?
Yes! A number of banks now offer “secured” credit cards where a debtor puts up a certain amount of money (as little as $200) in an account at the bank to guarantee payment. Usually the credit limit is equal to the security deposit and is increased as the debtor proves his or her ability to pay the debt.
Two years after a bankruptcy discharge, debtors are eligible for mortgage loans on terms as good as those of others, with the same financial profile, who have not filed bankruptcy. The size of your down payment and the stability of your income will be much more important than the fact you filed bankruptcy in the past.
The fact you filed bankruptcy stays on your credit report for 10 years. It becomes less significant the further in the past the bankruptcy is. The truth is, that you are probably a better credit risk after bankruptcy than before.
Can My Boss Fire Me For Filing Bankruptcy?
No. U.S.C. Sec. 525, prohibits any employer from discriminating against you because you filed bankruptcy.
What Do I Lose?
In a bankruptcy, assets in excess of your allowed personal exemption, or non exempt assets such as, real estate, automobiles and boats will be liquidated by the trustee.
How Do I Go Into Bankruptcy?
There are two ways a person can become a bankrupt. The first and more common way is for the person file a petition to voluntarily go bankrupt.
The second, and rarely used way, is for creditors to ask the Court to make an Order that a person is bankrupt. In both these cases, a Bankruptcy Trustee is required to administer the bankruptcy.
If you need relief from harassing creditors, Rowland & Yauger invite you to contact our office for a free consultation to learn how we can assist you in handling this matter. Contact us or call our office at 910-947-2280 or toll free at 910-722-9717.