FAQs on Bankruptcy

What happens if I file bankruptcy?
There are two types of bankruptcy available to most people. If you file Chapter 13, you may keep a mortgaged house or car. Rather than surrender property, you may pay off your debts over three to five years.

Filing bankruptcy under Chapter 7 requires you to surrender all assets that are not exempt in your state. Exempt property may include items such as basic household furnishings and work-related tools.

Both types of bankruptcy may get rid of debts where creditors have no specific rights to property and stop foreclosures, repossessions, garnishments, utility shut-offs, and debt collection activities. Bankruptcy usually does not wipe out child support, alimony, fines, taxes, and some student loan obligations.

How does a DMP program differ from Chapter 13 bankruptcy?
Our DMP is voluntary for both you and your creditors. Therefore, all creditors may not waive interest. However, when you have repaid your debts, our credit recovery program will help you regain your credit.

In contrast, when you file for Chapter 13 bankruptcy, it becomes public record. The court will administer the plan and all interest will be stopped. You may also have difficulty obtaining credit in the future.

How long does a bankruptcy stay on my credit report and how does it affect my credit?
Under the Fair Credit Reporting Act - a federal law - a bankruptcy can remain on your credit report for up to 10 years and won't clean up a bad credit record.

Do I need an attorney to file for bankruptcy?
You are not required to be represented by an attorney, but the advice of an attorney is generally helpful in understanding your rights and the consequences of your bankruptcy case, particularly in light of the recent changes to bankruptcy law. If you decide to file a Chapter 7 or Chapter 13 bankruptcy case, the advice and assistance of an experienced bankruptcy attorney is generally a worthwhile expense.

If I need legal advice on filing bankruptcy, and don't have the money to pay for an attorney, what should I do?
You can contact the local bar association, legal aid services, or a university law school with a legal assistance program for a referral to an attorney.

Can I keep my credit cards after filing?
Whether you will continue to have and use any given credit card account is up to the issuer of the card. Some issuers may permit you to keep your account if you "reaffirm" payment of your debt to the issuer. There may be other alternatives available, such as secured or guaranteed payment cards that function more like debit than credit cards.

Can I be fired for declaring bankruptcy?
The Bankruptcy Code generally prohibits termination of employment or discrimination with respect to employment solely because an individual (1) has filed a bankruptcy case, (2) has been insolvent before the case was filed, or (3) has not paid a discharged debt.

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