5 Most Commonly Asked Bankruptcy Questions

There are some common bankruptcy questions where people tend to develop certain assumptions. The answers to all those questions have been clearly explained below.

Do the creditors stop harassing once the debtor is declared bankrupt by the court?

As soon as you file your petition, the laws impose a restriction on the creditors and debt collection agency, making it illegal for them to contact the debtor and force them to make the payment of the debts. If you still receive phone calls from them, you can take legal actions in this regard. Once your petition is approved and you are granted bankruptcy by the court, there is no question of your creditors harassing you for payment. As part of the process, they will get the repayment in certain proportion as determined by the trustee, depending upon the value of assets that are liquidated and the amount of money you owe to different types of creditors. You creditors cannot take any action against you even if the amount of money they are paid is less than the actual amount due.

Will It Affect Your Wife or Husband?

This is one of the most common bankruptcy questions that are asked by people who are considering filing the petition, especially under chapter 7. If there is no joint debt (debt signed by both the spouses), your wife or husband will generally not get affected in this process. However, in states, where community property laws are applicable, either the spouse may be held liable for the debt including the one who didn’t sign the loan contract. But again, there can be certain exemptions in this regard also. If you have suspicion about this issue, you should consider consulting an experienced lawyer. For your information, the community property states are Wisconsin, Washington, Texas, New Mexico, Nevada, Louisiana, Idaho, California, and Arizona.

Will Everybody Get to Know about It?

This is probably the most common among all bankruptcy questions. Many people have the fear that when they are declared as bankrupt, everybody will come to know about it automatically. It is true that the judgment becomes a public record. Anyone who is trying to find information about it can easily find the same over Internet. Those who do not try to do a thorough background check about you will never get to know about it unless you tell them. It is important for you to keep in mind that bankruptcy records stay on your credit report for the next ten years.

Is It Possible to File for Chapter 7 Bankruptcy Again?

As per the laws, a second filing for chapter 7 bankruptcy is allowed if more than eight years have passed since the previous filing.

Can The Bankrupt Individual Keep His or Her Credit Cards?

In general, credit card companies cancel all cards that were issued to you, especially if you are discharging some of the credit card debts in the bankruptcy process. Still, it is entirely up to the credit card companies to make a decision in this regard; if they wish, they can allow you to keep your credit cards. The laws do not offer any specific restriction regarding this.

There can be several other bankruptcy questions also. For example, you may like to know if you will ever be able to get credit again. Though it will be a bit difficult, but if you follow the right approach, you can easily build a better credit history again within 6 to 12 months, which will help you qualify for loans and credit cards again.

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Posted in Bankruptcy, Bankruptcy Basics | 2 Comments »

2 Responses to “5 Most Commonly Asked Bankruptcy Questions”

  1. alphonsa says:

    Very ingenious effort made by this website by giving all the available information about debt consolidation and bankruptcy. Bankruptcy as the name suggest is perceived by an individual as a black spot to his credibility and all the future benefits will be seize. But by reading this article it is not the case at all. There are some frequently thought questions about bankruptcy and this is enlightened step in a very simple and lucid manner. I always have fear in my mind what if I failed to repay the loan will I declared to be a bankrupt so for its individual wish whether he wants himself to be declared as a bankrupt and a separate procedure is assigned. Some misconceptions are there in my mind that will be regularly harassed by my creditors for not paying the requisite amount. But thankfully this is not the case even I am liable to file a court case against him if he rags me for this.

    Secondly it is me only who has declared himself to be a bankrupt this will not affect the credit history of my spouse. This will get affected only if we have applied the loan jointly. But its better to consult more in this issue. Again we can file for bankruptcy after eight years of previous filing.

    Utility services are at the sole discretion of the companies whether they want to give the benefits . Credit card may or may not issue the cards for further use.

    So by reading this article it seems that bankruptcy is not dreadful on the contrary it is also advisable to remain updated with the payment and avail only that much loan that we could repay. Because it increases the pressure on the family front and also anybody can read your credit history if he wishes so your situation is made public. And we are social animal and status plays an important role in every individual. Plus we are devoid of taking future loans for some period of time. So every situation has its pros and cons. So its better to nip the evil in the bud. Because a decision well taken well done rather than to repent later. So I will follow the same thing while applying for a loan only in emergency and that I could repay easily. Because money spending has no end and it is us who have plan our lifestyle accordingly.

  2. Sams says:

    Excellent Questions. Curiosity about the bankruptcy leads to so many questions, the article has proved to be 100% successful for answering the most common questions about the bankruptcy. It is very difficult to accept yourself as a bankrupt but if you have no other option, then you have to go for it. The harassing calls from the creditors make a very deep effect on one’s feelings, that’s why the first question arises after filing a bankruptcy petition that “Will they keep calling like this ?” The answer is mentioned in the article after filing the petition the creditors can not give you a call. One more thing is that you need not to worry about the others, who will come to know about your insolvency. It is right that if anybody wants to enquire about you, he/ she will definitely get to know about it through internet but others can not. Bankruptcy is not going to affect your spouse if you do not have any joint debts, excluding a very few states. There is a procedure of filing for the bankruptcy again but if you improve your finances and credit score, there will be no need to be bankrupt again.

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