How do I know which Chapter is best for me?
By having an experienced attorney take a full account of your financial picture and advise you on the risks and benefits of each type of bankruptcy as well as the alternatives to bankruptcy.
Speaking of alternatives, what about debt consolidation?
Debt consolidators or non-profit debt counselors can help provide a get out of debt plan that does not include bankruptcy but the area is notorious for scams. Take the time to do a free consultation with an attorney before signing up with any company or at the very least thoroughly research the company through the better business bureau or consumer affairs.
Who will know if I file?
All of your creditors will get notice and so will anyone who is a co-signer on your debt. It also shows up on your credit report. Don’t be embarrassed about filing bankruptcy. Most people who file are just like you, honest, ethical, hardworking people who simply experienced some unforeseen circumstance that caused them to get behind on their bills or incur a large debt that is just impossible to pay. Our democratic government realized there needed to be a way for these victims of circumstance to get a fresh start and thus the bankruptcy code was written. Creditors are allowed to claim the debt you discharge in their taxes and our society moves happily along.
What about my credit afterwards?
Many people think that filing bankruptcy will prevent them from receiving any credit in the future. The opposite of this is usually true. Since people are only allowed to file every 7 years (with some exceptions) creditors actually see a post-bankruptcy person as a good candidate for small loans because they won’t be able to discharge the debt for 7 more years. Taking advantage of some of these small loans and managing your finances responsibly helps to rebuild your credit more quickly for larger purchases in the future. While a filing can stay on your record for up to ten years credit can still be reestablished during this time.
Can I stop a foreclosure of my home by filing bankruptcy?
Yes. Any filing automatically stops the foreclosure but a Chapter 13 can actually help you pay off your missed payments along with your other debts in a monthly payment plan.
Can I stop my wages from being garnished with bankruptcy?
Yes. It may even be possible to get some of the wages that were garnished back.
Can I file without my spouse filing?
Yes. This is often a good idea when one spouse carries more of the debt.
Can I keep one or two credit cards for emergencies, car reservations etc.?
You could try! If the card is paid in full before filing bankruptcy then you do not have to list it in your bankruptcy. However it is still possible that the cardholder will learn of your bankruptcy from your credit report and decide to cancel your account. They probably wouldn’t do so because as long as you are paying they are happy, but they could technically cancel it so it isn’t a fool-proof plan.
What is a secured credit card?
Secured credit cards are offered by most large banks as a way of rebuilding credit quickly after bankruptcy. As soon as you are discharged you can open an account with a $500 deposit. Just like a debit card you have to deposit the money to use it so you are actually using your own money, not credit, but unlike debit cards these payments are reported on your credit report to help rebuild a positive credit history and increase your credit score.