Bankruptcy FAQ
- What is bankruptcy? What does it do?
- Is there more than one type of bankruptcy? Which should I use?
- Will bankruptcy stop foreclosure and creditor calls or harassment?
- What is a discharge? Does it apply to all my debts?
- What is the difference between secured and unsecured debt?
- Will I be able to get credit after bankruptcy?
- How long do bankruptcies stay on my credit report? Are they public record?
- Do I really need an attorney to file bankruptcy? Can I do it on my own?
Bankruptcy is a legal way for people to eliminate their debt by providing at least partial payment to creditors and providing you a financial fresh start.
Yes, there are several types of bankruptcy. Most consumers (individual people) primarily file either Chapter 7 or Chapter 13 bankruptcy.
The type of bankruptcy you file depends on many factors – like the type of debt you have, income levels, and if you need to keep your home. Bankruptcy attorneys can help you determine which type of bankruptcy is right for you.
Yes. Filing bankruptcy provides immediate Automatic Stay Protection. Automatic Stay Protection stops foreclosure, creditor harassment, collections, and even lawsuits.
The length of protection varies depending on which type of bankruptcy you file and if you follow your plan to completion.
A discharge means the debt is no longer owed, nor can the creditor attempt to collect on the debt. It no longer exists.
Not all debts are discharged under bankruptcy law. Bankruptcy discharge applies to debts that are part of the filing. Any debts acquired during or following your bankruptcy filings are not discharged. Nor are all debts dischargable. Debts that are not generally discharged under bankruptcy are: certain secured debts like mortgages and car loans, tax debts, child support, spousal support/alimony, student loans, debts incurred because of intentional acts like fraud or because of a DUI.
Secured debt is debt that has an asset attached (collateral put up against the loan) that a creditor can claim as payment – such as a house or car.
Unsecured debt has no such collateral or asset attached – such as most credit or charge card debt.
Yes. It may be expensive, but possible. Many companies charge higher fees and interest. But from the time of your discharge, you will likely receive offers for new credit cards. The trick is deciding which, if any, to accept and not incur new debt.
A bankruptcy filing stays on your credit report 7-10 years. And yes, a bankruptcy is part of the public record – meaning anyone can find out if they want. It will show up on credit and background checks. Generally, however, only the people you tell or give access to your credit report will know about your bankruptcy.
You can file bankruptcy on your own, but no one recommends it. Bankruptcy is a complex legal matter, and a local bankruptcy attorney can advise you on options and exemptions you may not know about or fully understand.
Besides, your creditors will have attorneys working on their behalf, you should, too.