Bankruptcy FAQs
Will Declaring Bankruptcy Hurt My Credit?
Yes. Declaring bankruptcy will significantly lower your credit score. However, if your debts are bad enough, you're probably better off in the long run by filing for bankruptcy. This is because if you don't declare bankruptcy now, you may have payments you continue to miss and debts you may eventually default on. By declaring bankruptcy, you can reset your credit history sooner rather than later and start building it back up. Over time, the effect of anything that hurts your credit, such as a bankruptcy, diminishes.
How Soon Can I Stop Wage Garnishment?
If you declare bankruptcy, you could stop the wage garnishment immediately after you file your petition for bankruptcy. But keep in mind that some garnishments are immune from the automatic stay, such as those stemming from failure to make child support or alimony payments.
How Soon Can I Buy a Car After Chapter 7 Bankruptcy?
Yes. Declaring bankruptcy will significantly lower your credit score. However, if your debts are bad enough, you're probably better off in the long run by filing for bankruptcy. This is because if you don't declare bankruptcy now, you may have payments you continue to miss and debts you may eventually default on. By declaring bankruptcy, you can reset your credit history sooner rather than later and start building it back up. Over time, the effect of anything that hurts your credit, such as a bankruptcy, diminishes.
Can I Keep My Home in Chapter 7 Bankruptcy?
Sometimes. When an individual files for Chapter 7 bankruptcy, not every piece of property they own is subject to liquidation. Depending on what state you're in and how much equity you have in your home, your place of residence may be immune from liquidation. But this is only if you are current on your mortgage payments.
If you have any more questions, don't hesitate to give me a call at (678) 888-1778 or contact me online.
What is Chapter 7 Bankruptcy?
Both individuals and businesses are allowed to file for Chapter 7 bankruptcy. These proceedings typically last between three and six months.
Liquidation of property – In a Chapter 7 bankruptcy proceeding, some of your property may be seized and sold to pay off some or all of your debts. However, as a benefit of this type of bankruptcy proceeding, any unsecured debts (debts that are not guaranteed by collateral) will be wiped out. In addition, there are certain types of property that cannot be sold in order to pay off your debts, such as the furniture in your home, you car and your clothes.
Secured debt – Secured debts are treated differently than unsecured debts in a Chapter 7 bankruptcy proceeding. In a Chapter 7 bankruptcy proceeding, you (the debtor) have to make a choice between allowing the creditor to repossess the property that secures the debt, continuing to make payments on your debt to the creditor, or paying the creditor a sum equal to the replacement value of the property that secures the debt. In addition, some types of secured debts can be wiped out during a Chapter 7 bankruptcy proceeding.
Chapter 7 Eligibility – Before you can file for Chapter 7 bankruptcy, you must be able to show that you are eligible to file for Chapter 7. To be eligible for Chapter 7, you cannot make enough money (minus certain expenses and monthly debt payments) to be able to fund a Chapter 13 bankruptcy repayment plan. There are other requirements to be eligible to file for Chapter7 bankruptcy.
Debts that will not be wiped out by Chapter 7 bankruptcy – While credit card debt, unsecured loans, and other debts can be forgiven in Chapter 7, things like child support, taxes that are due, and alimony payments cannot be wiped out. For more debts that will remain after a Chapter 7 bankruptcy proceeding, see Debts that Remain After a Chapter 7 Discharge.
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