Frequently Asked Questions
1. How long will a bankruptcy filing stay on my credit report?
A bankruptcy filing can legally stay on your credit report for 10 years for a Chapter 7 bankruptcy. For a Chapter 13 bankruptcy, credit bureaus will generally remove the bankruptcy from your credit report after 7 years. Having a bankruptcy filing on your credit report does not mean that you will have bad credit for 7 to 10 years. Most people who file for bankruptcy can improve their credit score to a good level after 2-3 years.
2. Does filing for Chapter 7 bankruptcy mean that I will not be able to obtain credit for the next 10 years?
Generally, individuals who file for bankruptcy have been able to obtain credit within a few months of completing their Chapter 7 bankruptcy. Many credit card and loan companies may see you as less of a credit risk than you were prior to filing. When you file for bankruptcy you eliminate a lot of debt that previously made you a higher credit risk for companies lending you money or offering you a credit card.
3. Do I have to list all my credit cards in the bankruptcy, or can I keep some of my credit cards?
In bankruptcy you must list all of your debts. You cannot pick and choose which credit cards will be listed in the bankruptcy. Whether the creditor keeps you as a client after you file for bankruptcy is their decision. Generally, most credit cards companies will close your account.
It is understandable that you may not want to include a company that you feel has helped you or provided you good service. There is no law that prohibits you from paying any creditor back after your bankruptcy case.
4. What debts are not dischargeable in bankruptcy?
Debts that are in the nature of child support and alimony, and recent taxes debts are nondischargeable debts. Other debts that fall within the category of nondischargeable debts involve drunk driving judgments and debts involving fraud and embezzlement.
5. Can I eliminate student loans in bankruptcy?
Student loans generally fall under the category of non-dischargeable debts, regardless of whether they are government or private student loans. Unless you can show that repaying your student loans would result in undue hardship (very rare) bankruptcy will not eliminate your student loans. If you would like to learn more information about whether your student loans qualify to be discharged as part of your bankruptcy case go to: Student Loans and Bankruptcy
6. Can I keep the car that I am paying for in a Chapter 7 bankruptcy?
Vehicle payments are considered secured debt that you must continue to make your monthly payments on in order to keep your vehicle in a Chapter 7 bankruptcy. In bankruptcy you cannot eliminate a loan secured against your vehicle and at the same time keep your vehicle. If you keep current on your vehicle payments, we can assist you in reaffirming your vehicle loan.
7. If I am married, do I have to file jointly with my spouse?
You are not required to file jointly with your spouse if you are married, but you must list your spouse’s debts and assets in your bankruptcy petition. Listing your spouse’s debts ensures that creditors will not be able to pursue the community assets for your spouse’s liabilities. If you file individually your spouse should also not receive a bankruptcy filing on their credit report. To learn more information on the effect on bankruptcy on your credit report go to: Credit Reports and Bankruptcy
8. Who will find out that I filed for bankruptcy?
Although bankruptcy is a public record it is very rare that a relative or friend will find out through a public record that you have filed for bankruptcy. Generally, the only individuals who have knowledge that you have filed for bankruptcy are creditors who have pulled your credit report.
9. What can happen if I don’t pay my debts and I don’t file for bankruptcy?
Every situation is different, but generally if you fail to make payments on your debts then the creditor may seek several options to obtain the money. A creditor can file a lawsuit in court to obtain payment of the debt. Once the creditor obtains a judgment from the court, then they can seek to collect the debt through wage garnishment, levying bank account (freeze a bank account and obtain payment from the money deposited in the account), or place a lien on your property. The time frame in which the creditor will take action varies. Some creditors are more aggressive and take legal action faster while other creditors do not take legal action.
10. Will my creditors stop harassing me when I file for bankruptcy?
When you file for bankruptcy the automatic stay prevents creditors from contacting you or taking action to collect on the debt you owe. The automatic stay stops creditors from continuing with wage garnishments, lawsuits in court, or harassing telephone calls.
11. Can I keep my property if I file for bankruptcy?
Each state has bankruptcy exemptions that exempt property from being taken by the trustee to pay your creditors. In the majority of Chapter 7 bankruptcy cases all of the person’s assets are protected from creditors. You can learn more information on exempt assets in California at: California Bankruptcy Exemptions
12. Will I be able to rent an apartment after I file for bankruptcy?
Although bankruptcy may affect where you may be able to rent, it does not mean that you will not be able to rent an apartment at all. Generally smaller apartment complexes will consider your bankruptcy but not make it a determining factor on whether they will rent to you or not. It may be more difficult to rent at larger apartment complexes since they tend to have stricter guidelines. Although it may be more difficult to rent at certain places you should still be able to find a place to rent.
13. How can I improve my credit score after bankruptcy?
One way to rebuild your credit score after bankruptcy is through obtaining a secure credit card. A secured credit card requires that you deposit company as security for payment on the credit card. Generally, you can only use as much as has been deposited as security for payment on the card. The benefit of using a secured credit card is that it is reported to the credit bureaus and helps reestablish your credit.
14. Will I be fired from my job because I filed for bankruptcy?
The bankruptcy code prevents employers from firing you solely on the basis that you have filed for bankruptcy. In the majority of cases most employers will not even be aware that you have filed for bankruptcy. It is more likely that an employer finds out that you have debt problems because you are receiving harassing creditor calls at work or because of a wage garnishment.
15. Will I have to go to court?
In most cases the only time you will have to go to court is for the meeting of creditors. At this hearing a trustee, which is a court appointment person, will ask you questions about the information on your petition. The trustee is in charge of overseeing your case but is not a judge. The meeting of creditors is generally very quick and routine. An attorney from our law office will be present with you at the 341 meeting of creditors. For more information on the meeting of creditors: Bankruptcy- Meeting of Creditors
Do You Have Questions? – Get Answers at Your Free Consultation
The founder of Southern California Law Advocates, P.C. (SCAL), Orange County bankruptcy attorney Norma Duenas, is an experienced bankruptcy attorney who graduated from the University of San Diego Law School, Cum Laude.
Ms. Duenas has handled hundreds and hundreds of simple and complex Chapter 7 and Chapter 13 bankruptcy cases.
Attorney Norma Duenas will make time to sit down with you personally if you call and schedule a free and confidential consultation.