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Bankruptcy FAQs

Discuss Your Case with a Bankruptcy Lawyer in Batesville

Large amounts of debt can be daunting, but it is important to remember that there is still hope. Depending on the specifics of your situation, you may have a number of different options for debt relief, including Chapter 7 or Chapter 13 bankruptcy. While bankruptcy tends to have a bad reputation—and it is certainly not without some consequences—it is not something to be ashamed of. In fact, filing for bankruptcy can provide you with the fresh financial start you need.

That being said, there are many misconceptions about bankruptcy. The first step in regaining financial control and moving forward is arming yourself with all available information. With this in mind, our firm has compiled answers to some of the most frequently asked questions about bankruptcy. We invite you to browse our bankruptcy FAQs and, if you have questions about your specific situation, feel free to give us a call. Every case is unique and the best course for debt relief for you will depend on your particular circumstances.

Contact us online or by phone at (870) 293-6004 for an initial consultation with our Batesville bankruptcy attorney. We serve clients throughout Independence County.

  • If I file for bankruptcy, will it ruin my credit for 10 years?

    While it is true that bankruptcy is recorded on your credit report and it may temporarily affect your credit score, it is a common misconception that filing for bankruptcy “ruins” your credit for 10 years. In fact, Chapter 7 bankruptcy does remain on your credit report for 10 years, but Chapter 13 bankruptcy is deleted from your credit report 7 years after the filing date. In either case, bankruptcy itself does not typically damage credit; by the time you have decided to file for bankruptcy, your credit is likely very poor due to delinquent accounts and missed payments. Furthermore, although bankruptcy remains on your credit report for either 7 or 10 years, this does not mean that you will be unable to open any new lines of credit or secure loans for the full duration of this time.

  • Will I ever be able to get credit again after filing for bankruptcy?

    The answer to this goes hand in hand with the answer to the first question. As previously mentioned, bankruptcy remains on your credit report for a period of 7 or 10 years. However, this does not mean you will not be able to get credit for 7 to 10 years. In fact, many people who file for bankruptcy begin receiving credit offers relatively quickly.

    It is important to note that the first few credit offers you will receive will most likely be different than those you may have received prior to accumulating debt and/or filing for bankruptcy. You will likely notice lower credit limits, higher interest rates, and more fees. We advise that you tread carefully when it comes to post-bankruptcy credit offers. Many companies seek to take advantage of people who have had problems managing credit in the past and you do not want to end up in the same situation you were in before.

  • What will happen to my assets/property if I file for bankruptcy?

    This depends on the type of bankruptcy you file. If you file for Chapter 13, you will submit a repayment plan (rather than eradicate your debt) and will likely be able to keep most, if not all, of your property. If you file for Chapter 7, your debt will be eliminated and you may lose some of your assets. However, many assets are exempt either under state or federal law. Exemption laws take the total value of a property, the amount owed, and the equity (the difference between the value and the amount owed) into account. It is also possible to keep non-exempt property. To do so, you will have to pay the trustee the value of the property.

    If you have questions about exempt property and the specific details of your case, please contact our Batesville bankruptcy attorney for a free, confidential consultation.

  • What is the difference between Chapter 7 and Chapter 13 bankruptcy?

    Generally speaking, Chapter 7 wipes out your debt whereas, in Chapter 13, you will need to pay back your debt over a certain period of time. If you file for Chapter 7 bankruptcy, you may lose some of your non-exempt assets and property but your debt will be eliminated. Chapter 7 bankruptcy remains on your credit report for a period of 10 years. If you file for Chapter 13, on the other hand, you will likely get to keep all of your assets and property, but you will be required to create a repayment plan to pay back your debt in either three or five years. This plan must be confirmed and repayments will be supervised and enforced by the court. In either instance, you must first qualify before you can file for bankruptcy.

  • If I’m married and file for bankruptcy, will my spouse also have to file?

    No, your spouse does not have to file for bankruptcy when you do. However, in many instances, it may benefit you both if you do file for bankruptcy together. This is particularly true if you and your spouse have a shared responsibility for the debt. For example, if the two of you co-signed a mortgage or took out a loan together for a new car, you may want to file jointly. Burgess Law Firm can help you determine the best course of action for your unique situation.

  • Will my employer, coworkers, friends, or family know that I have filed for bankruptcy?

    Unfortunately, bankruptcy often carries a negative stigma and because of this, many people are concerned about their friends, relatives, coworkers, and boss knowing that they have filed for bankruptcy. First and foremost, bankruptcy is not a failure. Many situations and events out of your control have likely contributed to your debt. Once debt begins to snowball, it is nearly impossible for anyone to regain financial control.

    That being said, although bankruptcy filings are public record, it is highly unlikely that anyone other than your creditors or co-debtors will learn that you have filed for bankruptcy unless you tell them. Only your creditors and co-debtors will receive direct notice that you have filed for bankruptcy. As bankruptcy is reported to credit bureaus, any company that runs a credit check on you will also know of your bankruptcy. If you make child support payments to an ex-spouse or ex-partner, he or she will also be informed that you have filed for bankruptcy and will receive information on what to do if you stop making the child support payments. If you file for Chapter 13 bankruptcy and fail to meet your repayment plan payments, your employer may receive notice of a wage withholding request from a trustee. However, employer are not automatically notified if you file for bankruptcy.

  • Which debts can I eliminate by filing for bankruptcy?

    There are certain debts that are dischargeable (can be eliminated) and others that are not dischargeable. Depending on the type of bankruptcy you file for, filing may eliminate your credit card debt, medical bills, personal loans, past-due utility bills, business debts, certain unpaid taxes, tax penalties, revolving charge accounts, and more. In most cases, filing for bankruptcy will not eliminate your student loan debt unless you can prove undue hardship, which is extremely rare. Filing for bankruptcy will also not eliminate child support payments, alimony, or any family-related debt.

  • What can I do if a creditor won’t leave me alone?

    It is against the law for creditors to harass debtors. Creditor harassment includes any action that is meant to intimidate, deceive, or aggressively annoy the debtor. This can include things like unreasonably repetitive phone calls, abusive or offensive language, lying about who the creditor is, implying an association with a government entity, harassing a debtor’s friends or family, and similar behaviors. If a creditor is harassing you, you can report the behavior to the appropriate bureau/entity. See our Creditor Harassment page or call our firm to learn more.

  • Are there other options for debt relief besides bankruptcy?

    If you have significant debt but do not wish to file for bankruptcy, you may be able to find some form of debt relief through debt settlement. In debt settlement, a debt settlement company or an attorney negotiates with your creditors on your behalf to determine a lowered repayment amount. If successful, this option can help you avoid having to pay back the full amount you owe without having to file for bankruptcy. However, debt settlement does have its own serious drawbacks. We strongly recommend that you speak to an attorney before pursuing this method of debt relief or communicating with a debt settlement company. Visit our Debt Settlement page to learn more.

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