Articles - 5 Most Popular Questions
About Bankruptcy
WILL MY CREDITORS STOP HARASSING ME?
Yes, they will! By law, all actions against a debtor must cease once
bankruptcy documents are filed. Creditors cannot initiate or continue
any lawsuits, wage garnishees, or even telephone calls demanding
payments. 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 the marital community. There are a few exceptions to that rule,
such as the purchase or sale of real estate; those few exceptions do
require both spouse's signatures on contracts. But the day to day debts,
such as credit cards, do NOT require both spouses to have signed.
Your bankruptcy lawyer will be able to guide you in this regard.
WHO WILL KNOW?
Chapter 7 filings are public records. However, under normal
circumstances, no one will know you filed for Chapter 7. The Credit
Bureaus will record your filing and it will remain on your credit record
for 10 years.
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 given and is increased as the debtor proves his or
her ability to pay the debt.
Two years after a discharge, debtors are eligible for mortgage loans
on terms as good as those of others, with the same financial profile,
who have not filed Chapter 7. The size of your down payment and the
stability of your income will be much more important than the fact you
filed chapter 7 in the past.
The fact you filed Chapter 7 or 13 stays on your credit report for 10
years. It becomes less significant the further in the past the filing
is. The truth is, that you are probably a better credit risk after
bankruptcy than before.
WHAT DOES IT COST?
Costs for filing your bankruptcy will vary depending on the type of
bankruptcy you are seeking. The rule of thumb is that a consumer
bankruptcy will cost approximately $200. This does not include attorney
fees that can run between $700 and $1500 depending on the nature and
complexity of your case. Many bankruptcy lawyers will give you a free
initial consultation. You can keep the fees down by being well organized
and well prepared. You may also be able to keep the fees down by not
requiring the lawyer to attend the meeting of creditors with you. Check
this with your lawyer. In some states such as Massachusetts, attorneys
must attend the Section 341 meeting with the debtors otherwise attorneys
are deemed to have NOT represented the debtors.
These fee quotes are mere estimates based on nationally reported
averages and subject to variation and change. Please consult with your
local bankruptcy court and with legal counsel on fees before commencing
any action.
For more information, please visit
www.mybankruptcycounseling.com
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