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Basic Questions, Bankruptcy Terms, Common Q&A

Questions about Future Credit and Keeping all Property

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Credit after bankruptcy, Retaining property

How does bankruptcy affect my credit?

The fact that you file a bankruptcy case is a matter of public record and will appear in your credit history for seven to ten years after filing.

How long does it take?

Typically Chapter 7 is pending in the court for about six months. Chapter 13 plan lasts for three to five years. Emergency cases can be filed in minutes.

How long after filing will creditors be notified?

The clerk mails a notice about ten days after the case is filed to all creditors identified. Creditors must accept verbal notification in addition to other forms of notice.

Will bankruptcy erase and repair my credit?

No. Bankruptcy will eliminate debts and that will be reported to your credit, along with other history. Debts eliminated should reflect "DISCHARGED". You might be more credit-worthy after bankruptcy.

How long until I start rebuilding credit?

You do not have to wait. You may incur debt at any time. Court approval required while case is pending.

How soon can I get credit again?

Immediately. There is no prohibition against incurring new debt after bankruptcy. During Chapter 13, court approval is required.

How does bankruptcy affect taxes ?

Discharge of debt is not income for tax purposes. Trustee may require current year's tax refunds. Some taxes eliminated.

Will I have to go to court?

Yes. In every bankruptcy case, there is one public meeting you must attend called the meeting of creditors. Very brief and informal, your attorney appears with you.

What is the 341 hearing or meeting of creditors?

You must provide your photo ID and social security card. The Trustee verifies your information. If any Creditors appear, they could ask questions.

What if creditor shows up at meeting?

There are usually no creditors. The Trustee will permit a few brief questions, but any longer would require scheduling at a separate time.

What will they ask at the meeting of creditors ?

Trustee will ask you if your answers in your bankruptcy papers are true and correct and may ask about the content of your papers.

What if I forget to list a creditor?

There is time to amend schedules. Additional costs apply. Creditors not listed may retain rights.

What is an exemption?

Exemption is law that protects property from creditors. You can keep exempt property.

What is the automatic stay?

Automatic stay is federal bankruptcy court order against creditors to stop collection, effective the minute your bankruptcy case is filed.

What is difference in chapter 7 vs chapter 13?

Chapter 7 eliminates certain debts and it’s over in about six months. Chapter 13 is repayment plan over a period of three to five years.

Who is the bankruptcy trustee?

The Trustee represents the interest of creditors and is paid a commission on money distributed to creditors.

MORE FAQs about How to Qualify, Keeping Home & Auto

 

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