Posts Tagged ‘bankruptcy protection’

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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