Chapter 7 Bankruptcy and Chapter 13 Bankruptcy - Frequently Asked Questions

Posted on Jan 11 2013 at 03:26:56 AM in Law

Here are some answers to frequently asked questions for those filing chapter 7 bankruptcy or chapter 13 bankruptcy and what you need to know.  

Will a person filing chapter 7 bankruptcy or chapter 13 bankruptcy 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 bankruptcy discharge, debtors are eligible for mortgage loans on terms as good as those of others, with the same financial profile, who have not filed bankruptcy.

The size of your down payment and the stability of your income will be much more important than the fact you filed bankruptcy in the past. The fact you filed bankruptcy stays on your credit report for 10 years. It becomes less significant the further in the past the bankruptcy is. The truth is, that you are probably a better credit risk after bankruptcy than before.

Will using a credit counselor lead to a better credit score than going bankrupt?

No, it will not. It will cost you less money and you will rebuild your credit rating faster if you file Chapter 7 or Chapter 13. Be cautious if you are considering using a credit counselor. Also read about the problems of unscruplous companies in the credit counseling industry and IRS action against “non-profit” credit counseling groups following widespread abuse.  If you or somone you know, in the State of Washington, has fallen victim to consumer debt collection, we may be able to assist you.  Here are some tips to help you avoid debt relief scams.

Can I be fired for filing bankruptcy?

No. U.S.C. Sec. 525, prohibits any employer from discriminating against you because you filed bankruptcy.

Are private student loans dischargeable by a chapter 7 bankruptcy or chapter 13 bankruptcy filing?

On June 7 2007, US Senator Dick Durbin introduced a Bill to make private student loans dischargeable in bankruptcy, as they were before 2005. The 2005 changes to the U.S. Bankruptcy Code made the treatment of private student loans equivalent to the treatment of government-guaranteed student loans, which were not dischargeable. This bill would reverse the 2005 amendment, so that private student loans again would be fully dischargeable in bankruptcy.

When is the best time to consider a bankruptcy filing?

If you find yourself caught up in the current economic downturn a Chapter 7 bankruptcy or Chapter 13 bankruptcy can give you a fresh financial start.

Filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy can help relieve the financial distress due to a job loss, illness, divorce, or wages that simply cannot keep up with the increased costs of living.

If you find yourself drowning in debt a Chapter 7 bankruptcy or a Chapter 13 bankruptcy can help get rid of your creditors. Depending on your personal needs a chapter 7 or chapter 13 bankrupcty can literally wipe out all of your credit card, medical or home mortgage debt and prevent foreclosure on your home or the repossession of your car.

Your best course of action is to Contact a bankruptcy attorney and ask if they offer a free consultation.  

You may also visit our site for more informative articles regarding bankruptcy.


  Article Information
Created: Jan 11 2013 at 03:26:56 AM
Updated: Jan 11 2013 at 03:26:56 AM
Category: Law
Language: English