Bankruptcy FAQs and Myths

Can I keep a credit card in bankruptcy?

Typically No. You'll have to give up all of your credit cards. However, many people instead use their debit card for purchases they normally would have purchased with a credit card.

Should I pay off certain debt or creditor before I file?

No, unless it's for secured property (like a car) or via the normal course of business. If you do, this payment may be looked at as fraudulent and invalid by the bankruptcy trustee.

Will my bankruptcy filing be public record?

Yes, but not in a conspicuous place like a newspaper or common medium. Your bankruptcy record typically will only be seen by someone in search of such information and one who knows where to look.

Can I keep my personal possessions or will everything be liquidated or taken away?

In a Chapter 13 you should be able to retain all your possessions while in a Chapter 7 you may be able to retain all your household possessions along with all other items depending on your particular situation.

Can I keep my house?

You can remain in your house in both a Chapter 13 and Chapter 7, however, if you file a Chap 7 and have too much equity in the home, the trustee may force you to sell. Click here to visit the page on mortgages and foreclosures.

Can I keep my car?

Yes. You can usually keep in both a Chapter 7 and 13 if you continue to pay the monthly car payment.

Can I discharge my unpaid taxes?

Typically your tax debt can be discharged if it is more than 3 years old and was filed on time. There is also an offer in compromise with the IRS, where you can work with the government to settle a reduced amount.

Can I discharge my student loans?

Not usually. Student loans are very difficult to discharge. You will need to establish undue hardship if you want to erase your student loan debt.

Can I discharge any judgments or lawsuits against me?

Yes, they can be extinguished if there is no lien on any real property or the lien attaches to real property that is exempted from the bankruptcy estate.

Will my wage garnishments stop?

Yes, as soon as you file bankruptcy.

Will phone calls from creditors stop?

Yes. When you retain me you can give your creditors my phone number and / or provide them a letter indicating your have filed for bankruptcy and retained an attorney. By law your creditors are forced to stop all harassing phone calls. My retainer is $500. Once you retain me I will make sure the harassment stops.

What happens to my credit report?

Some people think that their credit report will be ruined if they file for bankruptcy. However, if you already have high credit card debt and are only making minimum payments or have missed payments then it is more likely than not that your credit is trashed now and it will never get better until you act to clear it up. Why not use the benefits of bankruptcy to help you erase your debts so you can end the constant bill battling and start improving your credit rating immediately.

How long will my bankruptcy be on my credit report?

Technically 7-10 years but in today's environment things have changed. A lot more people are filing for bankruptcy. Bankruptcy is no longer looked at by financial institutions as negative as it was in the past. I'm aware of a couple who filed for bankruptcy 3 years ago and recently secured a mortgage to purchase a home. In some cases you can even get a secured credit card within a year or two and start building your credit card back up. As a bankruptcy filer, you actually become a better credit risk. This is because banks know you that once you file for bankruptcy you are barred from filing again for a certain time and also that you don't have other debts you have to pay off.

If I'm married do I file jointly?

Not necessarily. Both you and your spouse do not have to file. One spouse can file and the other spouse's credit rating won't be affected by the bankruptcy.