Bankruptcy is a great way for some people to get rid of all or most of their debt, but the process is confusing for some. Individuals filing bankruptcy typically have questions before, during, and even after the process is finalized. If you are suffering from immense debt, below are the answers to some of the most frequently asked questions. Knowing these answers before you begin can help you to better prepare for the process.
What Is Bankruptcy?
Bankruptcy is the legal process for discharging debt. There are many different types of bankruptcy you can file depending on whether you are filing a personal bankruptcy or filing for your business.
What Type of Bankruptcy Should I File?
No one can determine which type of bankruptcy is right for you without first reviewing the facts of your case. Generally speaking, Chapter 7 bankruptcy works best for unsecured debt, or if you just want to get rid of your debt and start with a clean slate. Chapter 13 bankruptcy is more complicated and involves creating a repayment plan that could extend over five years. When filing a Chapter 13 bankruptcy, you can also keep your home and other assets.
When Should I File Bankruptcy?
Simply being in debt is not reason enough to file bankruptcy. If you have a good income, or very little debt, and do not have trouble paying it off, bankruptcy is probably not the wisest choice. However, if your debt significantly outweighs your assets and income, bankruptcy may be a good choice.
How Can I Stop Creditor Harassment After Filing Bankruptcy?
Once you file bankruptcy, your creditors must stop harassing you and you do not need to do anything to stop it. The bankruptcy court will issue an automatic stay, which prohibits any debt collectors or creditors from contacting you and trying to collect on the debt.
What Should I Do if a Creditor Still Contacts Me?
If you have filed bankruptcy and a creditor or debt collector contacts you despite the automatic stay, you should speak to a bankruptcy lawyer. Ask the offending creditor for their name so your lawyer can send them a cease and desist demand letter to stop contacting you. If they still continue to contact you, obtain their names and contact information so your lawyer can sanction them in the bankruptcy court.
Can I Obtain Credit After Filing Bankruptcy?
In most cases, a person can still obtain credit after filing bankruptcy. In fact, many people receive pre-approved credit applications shortly after their debt is discharged. However, you should know that you may have to pay higher interest rates. If you want to improve your credit without taking on higher interest, a secured credit card can help you get your credit score back in good standing.
Can I Keep Current Credit Cards Once I Have Filed?
This will largely depend on your creditor. If you have a balance on your credit card and discharge the debt, the creditor will likely cancel your account. Even if you do not carry a balance on a credit card, the creditor may still cancel the account because they now view you as high risk. It is important to understand though, that keeping a credit card could hurt your bankruptcy case. Other creditors may point to the fact that you have paid down one debt, so you should be able to pay down others, as well. If they are successful with their argument, it could push you out of bankruptcy.
Is All My Debt Discharged in Bankruptcy?
The answer to this largely depends on the type of debt you have, and the type of bankruptcy you are filing. If you are filing Chapter 13 bankruptcy, you may get rid of some of your debt, but you will likely have to repay the majority of it. Regardless of what type of bankruptcy you file, there are still certain types of debt you cannot discharge in bankruptcy. These include child support, student loans, and certain tax debts.
What Property Do I Have to List When Filing?
The bankruptcy laws of the United States require that you fully disclose all of your property and assets regardless of the type of bankruptcy you are filing. Bankruptcy filings are examined by the U.S. Trustee’s office, IRS auditors, and the FBI fraud division. Even if you do not include certain assets within your bankruptcy filing, they will be found. Once they are, not only will it hurt your bankruptcy case but it can also result in charges of bankruptcy fraud. Bankruptcy is a federal felony that has serious penalties for those convicted. Always fully disclose your assets, regardless of how you think they may affect your case.
Who Will Learn About My Bankruptcy?
Most court records are public record and bankruptcy proceedings are no exception. However, you should not let this keep you from filing bankruptcy. Your friends and family will not likely pull up public records to learn about your bankruptcy, so they will only know if you tell them.
Direct notice of the bankruptcy is sent to your creditors and, if applicable, your co-debtors. Bankruptcies are also reported to the major credit bureaus and so, it will remain on your credit
for seven to 10 years. This may mean that employers and creditors may be able to see it if they perform a credit check on you.
Do I Have to Work With a Florida Bankruptcy Lawyer?
You are not required to hire a Fort Lauderdale bankruptcy lawyer when filing any type of bankruptcy and you can represent yourself in court. However, doing so has many disadvantages. Bankruptcy laws in the country sometimes change and one mistake could mean significant consequences for your case. At Loan Lawyers, we have helped thousands of people successfully file bankruptcy and become debt-free and we want to help you, too. Call us today at (954) 807-1361 or fill out our online form to schedule a free consultation with one of our skilled attorneys.
Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation to see how we may be able to help you.