Can I keep my house?

Many people are eligible to file a Chapter 7, even if they own a house, depending on the market value of the house and the size of the mortgage. If your house has too much value, it may be necessary to file a Chapter 13.

My house is worth MUCH LESS money than what I owe? What if I do not want my house any longer? What happens if and when I stop paying the mortgage(s)?

Both Chapter 7 and Chapter 13 can you allow you to “walk away” from your mortgages, meaning that you would never have to pay the mortgage(s). You would also not need to worry that the money lost by your mortgage lender(s) would be a capital gains tax to you on which you would normally have to pay an income tax. In many situations, you can live in your home for many, many months without making mortgage payments before you would be required to move by the foreclosure court.

Can I keep any of my credit cards?

In almost every situation, your credit card will be canceled. Your credit card may even be canceled if you have a zero balance. It is solely the decision of the credit card company whether you will be allowed to continue to charge on their credit card. If you are interested in keeping a credit card, you should contact the company after the bankruptcy has been filed. If they will allow you to continue to use the card, tell them to forward to our office a “reaffirmation agreement”. This agreement obligates you to pay the credit card company but will allow you to use the card.

Can I keep my car, truck or van?

Most people who file Chapter 7 can keep their car, truck or van, whether paid, leased or financed. The vehicle’s value and the amount due on the loan, if any, will determine whether the vehicle can be retained under a Chapter 7, or whether a Chapter 13should be filed in order to keep the vehicle.

Will my employer be notified if I file bankruptcy?

The Clerk of the Bankruptcy Court sends notices to all creditors that you have filed a bankruptcy. A notice is not sent to your employer. However, if your wages are being garnished, your employer will need to know that you filed since the filing of the bankruptcy will stop the garnishment.

Will I lose my job if I file bankruptcy?

No. The United States Bankruptcy code prohibits discrimination by an employer just because you filed bankruptcy.

How often can one file a bankruptcy?

Chapter 7 can be filed eight (8) years after a discharge in a previous Chapter 7, or six (6) years after a discharge in previousChapter 13, if more than 70% of claims were paid and the plan was proposed in good faith. A Chapter 13 can be filed four (4) years after a discharge in a previous Chapter 7, or two (2) years after a discharge in a previous Chapter 13 case. It is not allowed to have two bankruptcies open or pending at the same time.

If I file bankruptcy, does my spouse have to file bankruptcy with me?

No. It is not required that your spouse join in on your bankruptcy. However, it may be beneficial for your spouse to join you depending upon the particular Chapter under which you are filing and the nature of your debts.

What happens to my spouse’s credit if I file bankruptcy?

If you do not have joint debts with your spouse, his/her credit will not be affected. If there are any joint debts, your bankruptcy will appear on your spouse’s credit report and it will affect his/her credit score.