Is there life after bankruptcy?
Yes. You can get car loans, car leases, unsecured credit cards, home loans (provided you have verifiable income). You want to build your credit by obtaining new credit cards, car loans, and other credit accounts which report to the credit reporting agencies. Sometimes you will have to start with a secured credit card, and build up to a traditional unsecured credit card once you build a history of responsible use. This website is a great starting point to evaluate credit card products, rates and fees: www.bankrate.com.
What are the different chapters of bankruptcy:
The 3 most common are: 1. Chapter 7: a straight liquidation bankruptcy. This is the most common form of bankruptcy where you typically file the case, go to 1 hearing, and wipe out most unsecured debts while keeping all your assets. 2. Chapter 13: a payment plan bankruptcy, for higher income individuals who don’t qualify for Chapter 7 or who need a payment plan to cure arrearages on home and vehicle loans and tax debt. 3. Chapter 11: usually a payment plan bankruptcy, for higher debt individuals and entities which need to reorganize their debts and assets, reject certain contracts, and emerge from bankruptcy (hopefully) with less debt and better cash flow.
What is the time line of bankruptcy?
Chapter 7 usually takes 3 ½ months, with one hearing about 35 days after filing. Chapter 13 takes 3 to 5 years to complete. Chapter 11 usually takes about 6 months to a year to confirm a bankruptcy plan, depending on the complexity of the case, and plan payments can vary from 1 lump sum payment to 20 years or more.
Do I have to go to court and talk to a judge?
Typically not. In a Chapter 7, you go to an administrative hearing, answer about 10-15 easy questions from a bankruptcy trustee, and go home. If the trustee has further questions about your income and assets, usually you and your lawyer produce further information and documents to the trustee to satisfy the inquiry. Similarly, in a Chapter 13 and Chapter 11, most debtors face limited examinations from the trustee and never have to attend court hearings, which are handled by their lawyers.
What are the disadvantages of bankruptcy?
The bankruptcy reference stays on your credit report for up to 10 years. Credit scores drop dramatically for those who begin the bankruptcy process with high credit scores, and post bankruptcy interest rates are much higher than before on credit cards, mortgages and vehicle loans and leases. However, for the vast majority of persons who start the bankruptcy process with poor credit, there is much less of a negative effect. In fact, for those who already have bad credit, a bankruptcy can actually make it easier to rebuild credit since debts and judgments are now indicated as wiped out or discharged on their credit reports.
Can I file bankruptcy myself without a lawyer?
Self-represented or “Pro Se” bankruptcy filings are very common in Southern California. It is possible to get the same result in bankruptcy with or without a lawyer. There are self-help resources and clinics available at the bankruptcy courts. However, most persons and companies are far better off with a lawyer than without one, especially those with more sophisticated financial profiles.
Can I file bankruptcy and leave out my favorite credit cards and my Rolex watch collection?
You have to list all your assets and all your debts when you file bankruptcy, and there are severe financial and criminal penalties for failing to do so. It is acceptable not to list zero balance credit cards, so if you have a very small balance credit card, it is possible not to list it if you pay it down to 0 prior to filing. You may be surprised to learn how much assets you can actually keep through bankruptcy exemptions, while still being able to wipe out your debts. Get a free consultation today with a qualified, experience lawyer like Michael Chekian (310) 390-5529; firstname.lastname@example.org.