Bankruptcy FAQs: Chapter 13 Bankruptcy. Chapter 7 Bankruptcy

I will lose my house and cars in Bankruptcy. The truth is most people that file Bankruptcy are able to keep all of their property, including houses and cars. Most property in Bankruptcy is exempt and protected from recovery by creditors or the Court. Typically, as long as you keep making the payments on houses and cars you want to keep, you will not lose them.

I don't have enough debt to file for Bankruptcy.   There is no minimum amount of debt you need for filing bankruptcy.  If you are struggling to pay your bills, then bankruptcy may be a good option.  

Is Bankruptcy my best option?  Everyone's situation is different.  During the free consultation with us, we will fully analyze your situation and discuss all of your options.  Bankruptcy does stop foreclosures and repossessions.  Bankruptcy eliminates overwhelming debt.  Imagine waking up debt free.  

I will lose my job in Bankruptcy. Not true. The Federal Bankruptcy Laws do not allow employers to take negative action against people that file for bankruptcy. This includes Security Clearance.

I will not be able to rent an apartment after Bankruptcy. Mostly not true. Though some landlords may deny you a lease, most will rent to you. They may however request an extra month security deposit.

I can't afford to file for Bankruptcy. We offer payment options for Bankruptcy filings. For Chapter 7 cases, you can make payments on your own schedule. Once you have paid your entire fee, your case can be filed. For Chapter 13 cases, the majority of your fee can go into your Chapter 13 Plan, whereby we will get paid our fee overtime. In addition to our payment options, the Court allows you to pay the Court filing fee in 4 monthly installments.

Affording the legal fee can be easy.  Once you make the decision to file for bankruptcy, you should stop making payments on your unsecured debts.  Once your case is filed, these unsecured debts will be included in your case. 

I will never get credit again. Not true. In a Chapter 7 Bankruptcy, once your Case is complete, which is normally about 4 to 5 months after you file for Bankruptcy, you will receive credit card offers in the mail. This is because you cannot file for Chapter 7 Bankruptcy again for 8 years. The credit card companies know this, and they want you in debt again. It is recommended that you get one credit card after Bankruptcy. Charge a small amount every month that you can pay off each month. This will help you rebuild your credit.

I will not be able to buy a car or a house after Bankruptcy. Not true. Generally, within 1 year of your Chapter 7 Bankruptcy Case being over, you will be able to buy a car. Your interest rate will be high to begin with, but each month that you continue with no negative hits on your credit, the better rates you will be offered. Remember, it is important to have positive information being reported to the credit agencies after Bankruptcy (See previous FAQ above).

When it comes to buying a house, generally mortgage lenders will consider you for a mortgage 2 years following the end of your Chapter 7 Bankruptcy Case. Again, it is important to have positive information being reported to the credit agencies after Bankruptcy (See previous FAQ above).

I will lose my Security Clearance in Bankruptcy. Not true. We routinely represent people with security clearance levels of every kind. No one has reported any negative outcome with their clearance due to a Bankruptcy. In fact, people have been advised that a Bankruptcy is better for their clearance than having ongoing financial problems. Though this has been our experience, we still always advice anyone with this concern to speak with their employer about their possible Bankruptcy filing and the possible effect on their clearance.

Personal taxes are not dischargeable in Bankruptcy. The fact is that certain taxes are indeed dischargeable in Bankruptcy. A review of your personal tax debts will allow us to determine which taxes are, and are not, dischargeable through Bankruptcy. For taxes that are not dischargeable, you may have the option of using a Chapter 13 Bankruptcy to create a payback period of up to 5 years.

I can only file for Bankruptcy once in my life. You can file Chapter 7 Bankruptcy again as long as it has been at least 8 years since receiving your last Bankruptcy discharge. Even if it is too soon for you to file Chapter 7 Bankruptcy again, you may still be able to file Chapter 13 Bankruptcy.

Bankruptcy will affect my spouse. So long as you do not have joint debt with your spouse, your spouse's credit is generally not affected by your Bankruptcy.

Filing for Bankruptcy is a terrible thing to do. Bankruptcy is not the end of the world. The fact is there are things that happen that are out of your control. When the debt becomes unmanageable, steps must be taken to get back on track. Bankruptcy was created for that purpose. In even considering filing for Bankruptcy, you have taken the first positive step to dealing with your financial problems and creating a fresh start for you and your family.

I can choose which debts I include in my Bankruptcy. You must list all of your debts in your Bankruptcy, including debts you plan to keep paying, such as mortgages and car payments. Even though all of your personal debt may be discharged in Bankruptcy, you can still choose to voluntarily repay any particular debts.

Everyone will know I filed for Bankruptcy. Most likely not true. Bankruptcy is not published in any newspaper. And because it is federal, Bankruptcy will not show up on a Maryland court case search. In order to find out you have filed for Bankruptcy, someone would have to get a federal court case search account. Typically, the only ones that will know about the Bankruptcy are your creditors and anyone you choose to tell.

I will have to go to Court and see a Judge. Most people that file for Bankruptcy never go to Court or see a Judge. The typical Bankruptcy hearing is conducted by a Trustee that works on behalf of the U.S. Trustee's Office. The hearing with the Trustee is held online via Zoom. You will typically only see a Judge if there is something unusual that occurs in your Case.