How Often Can Someone File for Bankruptcy?
Hopefully, you will only ever have to file for bankruptcy once. While filing can relieve you of seemingly insurmountable debt, bankruptcy does have a substantial negative impact on your credit. Consequently, you should seek to avoid multiple filings if at all possible. If it does appear that an additional bankruptcy filing will be necessary, the timing and specifics of your filing will need to be carefully considered.
If you previously filed for Chapter 7 bankruptcy, you must wait 8 years before filing for Chapter 7 bankruptcy again or 4 years before filing for Chapter 13 bankruptcy. If you filed for Chapter 13 bankruptcy, you must wait 2 years before filing for Chapter 13 again.
How Much Debt Should Someone Have Before Considering Bankruptcy?
There is no set amount of debt that warrants consideration of bankruptcy. However, if your debt continues to grow and you know that you do not have the means to get on top of it, it may be time to start thinking about filing. This is doubly true if you start receiving calls and letters from collection agencies.
Bankruptcy is not right for everyone. If you are only experiencing a temporary financial hardship, you may be able to negotiate directly with your creditors and come to a solution that avoids bankruptcy. This might involve modifying your monthly payment amounts or a reduction in your total obligation.
When a compromise cannot be reached, you may be at risk of foreclosure, wage garnishments, vehicle repossessions, and creditor lawsuits. Filing for bankruptcy can stop all of these collection actions. My team can evaluate your financial situation and make recommendations on what strategies, including bankruptcy, can help you relieve your debt.
What Types of Debt Are Dischargeable in Bankruptcy?
It is important to understand that not all types of debt are dischargeable upon successful completion of a bankruptcy filing. You will generally be allowed to discharge unsecured debts at the conclusion of your filing. Unsecured debts include credit card debt, medical bills, personal loans, and unpaid utility bills.
You will not typically be permitted to discharge secured debts, which can include mortgages and automobile loans. Generally speaking, you will also not usually be able to discharge tax debt, debts for assets obtained through fraud, alimony, child support, legal judgments, court judgments, student loan debt, and debts incurred due for injury or death due to drunk driving. You will also not be able to discharge any debts incurred after your bankruptcy is filed.
Under very limited circumstances, certain types of student loans and tax debt can qualify to be discharged. I can walk you through what types of debt you can expect to discharge at the conclusion of your bankruptcy filing.
Can Filing for Bankruptcy Help Me Save My Home?
In many cases, yes! Filing any type of bankruptcy promptly activates the automatic stay, a court order that halts all collection actions. This can stop foreclosure proceedings so long as your home has not already been sold at a public auction. The automatic stay remains in effect for the duration of your bankruptcy, meaning that foreclosure cannot generally continue until your filing has concluded.
If you file for Chapter 7 bankruptcy, you will need to protect your home from the liquidation process. State and federal exemptions allow you to protect a certain amount of equity in your home. While this can be confusing to understand, the bottom line is that many are able to shield their homes from liquidation. If you file for Chapter 13 bankruptcy, you will continue to pay a portion of your mortgage as part of your court-ordered payment plan.
You cannot discharge missed mortgage payments through bankruptcy. However, discharging your unsecured debts gives many filers the flexibility and resources to catch up on payments and bring their mortgage current. If you file for Chapter 13 bankruptcy, you will also have as many as 5 years to reorganize finances and raise funds.
If you are concerned about losing your home to foreclosure, get in touch with my team. I can review how your home might be impacted in a Chapter 7 or Chapter 13 bankruptcy filing.
How Long Does Bankruptcy Stay on My Credit Record?
There is no getting around it: Filing for bankruptcy does have a negative impact on your credit record. Most bankruptcies will remain on your credit reports for a period of 7 to 10 years. However, this does not mean that you cannot take steps to repair your credit. My team can provide guidance for limiting credit-related consequences and recommend tools and strategies that can help you improve your credit as efficiently as possible.
Who will know I filed for bankruptcy?
When you file for bankruptcy, your creditors and other parties will be notified of the filing. Depending on the type of bankruptcy you filed, this could include court trustees, debt collectors, credit bureaus and even landlords. Additionally, if you file a Chapter 7 or Chapter 13 bankruptcy petition, it will become part of the public record available to anyone who searches for it. This means that anyone, including potential employers and landlords, can find out if you have filed for bankruptcy. However, if an employer denies you a job due to your bankruptcy filing, they must tell you why.
Although filing for bankruptcy may be a public matter, it is unlikely your friends or family will find out about your filling unless you disclose this information to them or they conduct the research themselves.
As a lawyer with decades of hands-on experience, I am happy to answer all of your frequently asked questions about bankruptcy in Madisonville. If you have additional questions about your specific circumstances, do not hesitate to call (888) 392-0409 or contact me online.