Bankruptcy Frequently Ask Questions
Will bankruptcy eliminate all of my debt?
Yes. Once you file for bankruptcy an "automatic stay" will prevent creditors from continuing their collection attempts.
Will I lose all of my assets?
There are a number of assets that are "exempt" from the bankruptcy process and free from creditors who do not have a lien against the exempt asset. To learn more about what assets you may be able to keep, click here.
What is a "Fraudulent Transfer"?
A transfer of a debtor’s property made with intent to defraud or for which the debtor receives less than the transferred property’s value.
What is a "No-Asset" Bankruptcy?
A chapter 7 case where there are no assets available to satisfy any portion of the creditors’ unsecured claims.
Can I keep my home if I continue to pay my mortgage/s?
If you have a mortgage on your home but would still like to keep the home, you will need to "reaffirm" the mortgage debt. to learn more about "reaffirmation" of debts, click here.
Can I pay back my parents (brother, sister, son, daughter, buddy, etc.) the money they loaned me a while back, without affecting my bankruptcy?
No. After you file, or within the 90 days before you file, (with some exceptions that may not apply) or within one year before you file in the case of payments to "insiders" you don’t get to pick and choose who gets paid. Theses are called "Preferences". Violations may be voided, or worse, they may be deemed fraudulent. You can voluntarily pay them back after your discharge if you want.
Will a bankruptcy adversely impact my credit rating?
A bankruptcy will show up on your credit report; however, most people entering into bankruptcy have already taken significant hits to their credit score so the impact may be limited. Many find that bankruptcy is actually the first step to restoring their credit score since they have shed the debt that caused their credit to fall in the first place.
Can you reaffirm credit card debt in order to keep the credit card?
A bankruptcy doesn’t force termination of credit accounts. It only discharges the debts. Whether the creditor will agree to keep an account open (regardless whether it carried a discharged debt or not) is at the creditor's discretion. If there are balances due on the cards, it is very unlikely that the trustee would approve reaffirmation of two unsecured debts and discharge the rest. On the other hand, credit card lenders are cold. They may determine that if they took no loss, and since you wouldn’t be able to file again for 8 years, you are worth keeping as a customer.
When I file bankruptcy do I have to list all of my assets and liabilities?
Yes. Bankruptcy does not allow the debtor to favor one creditor over another and only allows the debtor to keep certain assets.
What if you forget to list a liability?
Your bankruptcy lawyer will have to amend your case to include the omitted liability.
Can all debts be discharged through bankruptcy?
No. Certain debts like student loans, taxes, government loans and certain credit card debt cannot be discharged.
If I file Bankruptcy will I lose my social security benefits?