If you want to keep your car, keep making your payments. But if you have a store account that you used to buy furniture, electronics or jewelry that you want to keep, it is okay to stop paying for these items for a few months before you file bankruptcy.
Paying Certain Creditors Too Close to Bankruptcy. For regular creditors, like a credit card company or a bank, the preference period is 90 days prior to filing bankruptcy. If the creditor is an "insider", which includes family members, the preference period is one year prior to filing.
Hiring an attorney. If you hire a bankruptcy attorney, and you inform your creditor of that fact, the creditor will have to call your attorney instead of you. Some bankruptcy attorneys will accept a small down payment—perhaps as little as $100—as an initial retainer so that you can avoid the calls while saving the rest of your attorneys' fees.
After bankruptcy: My house payments don’t show on my credit report. One reason to file bankruptcy is to get back to good credit. Once your credit has gone bad, bankruptcy, for most people, is the fastest way to fix it.
The answer is that you do not have to wait to be behind on your bills before you file for bankruptcy. Instead, you can file if you qualify. Most consumers file either for Chapter 7 or Chapter 13 protection. Neither bankruptcy requires that you be behind on your bills before filing.
Chapter 7 Bankruptcy Money from the sale goes toward paying your creditors. The balance of what you owe is eliminated after the bankruptcy is discharged. Chapter 7 bankruptcy can't get you out of certain kinds of debts. You'll still have to pay court-ordered alimony and child support, taxes, and student loans.
After you file for bankruptcy protection, your creditors can't call you, or try to collect payment from you for medical bills, credit card debts, personal loans, unsecured debts, or other types of debt.
The long and short of it is that, no, you probably won't lose your cell phone or your contract if you file for bankruptcy. This means you should never leave any asset off your bankruptcy petition.
The average credit score after bankruptcy is about 530, based on VantageScore data. In general, bankruptcy can cause a person's credit score to drop between 150 points and 240 points. You can check out WalletHub's credit score simulator to get a better idea of how much your score will change due to bankruptcy.
Can I Take a Vacation While in Chapter 7? If you want to take a vacation while in Chapter 7, this is permissible as long as it is in your budget. Keep in mind however there is always the chance the Trustee and/or your attorney will request additional information or documentation while you are away.
If you are part of a Chapter 7 bankruptcy and your income increases, speak with an attorney about whether you need to inform the court. The increase may not change your circumstances since a Chapter 7 bankruptcy is based on your financial circumstances at the time of your filing.
Which Debts Will Chapter 7 Bankruptcy Discharge?credit card charges, including overdue and late fees.collection agency accounts.medical bills.personal loans from friends, family, and employers.past-due utility balances.repossession deficiency balances.most auto accident claims.business debts.More items...
Cell Phones in Chapter 7 Bankruptcy The trustee appointed to oversee a Chapter 7 bankruptcy sells any nonexempt property a debtor can't exempt and turns over the proceeds to the creditors. Most people find that their exemptions sufficiently cover all of their household goods and electronics, including cell phones.
Many Chapter 7 bankruptcy attorneys will allow you to pay your fees through an installment plan. You'll make your payments according to the schedule and, once you've paid the entire fee, the attorney will file your case. Don't expect your lawyer to file your bankruptcy paperwork beforehand, however.
Or your lender would repossess your car. Bankruptcy stops your creditors from taking these actions so you do have some wiggle room here.
One of the things that some debtors do is maintain payments on one credit card while allowing other debts to go into default because they want to keep that credit card after bankruptcy.
Chapter 7, of course, discharges credit card debt against assets that the bankruptcy trustee can liquidate. Chapter 13 involves a repayment plan. But certain debts are prioritized over others and unsecured debts tend to be prioritized the lowest.
If you’re filing for bankruptcy, you may want to stop paying your utility bills ONLY if they are already delinquent. And in that case you may only want to pay for your current usage if you’re at risk of a disconnection. Once you file bankruptcy, your gas, electric and water company will not be able to disconnect your service for nonpayment of bills prior to your bankruptcy. However, if you file bankruptcy and fail to pay your utility bill for usage after you file bankruptcy, you can lose services.
Medical Expenses. Medical expenses are considered unsecured debt. If you’re being harried by a creditor who represents a hospital and have been making payments on this debt, you should stop if you’re considering bankruptcy. Don’t feel bad.
For those who have a lot of secured debt (mortgage payments or car loans) Chapter 13 provides the better option. In some situations, even those who qualify under Chapter 7 may consider Chapter 13. This is because you won’t take as much of a hit on your credit report, but the repayment plan has to make financial sense.
Once again, it makes no sense to waste your cash on making payments on something you don’t plan to use after bankruptcy anyway. Many debtors feel guilty about discontinuing payments even if they are going to file bankruptcy; but there is nothing immoral or unethical about discontinuing payments.
Overwhelming medical debt is one of the most common reasons people file for bankruptcy relief. Luckily, medical bills are general unsecured debts like credit card obligations. Similar to credit cards, paying your medical bills prior to filing for bankruptcy will be a waste of time—and money. Alimony and child support.
Chapter 13. In Chapter 13, it's less about qualifying and more about having sufficient income to make the required monthly plan payment to your creditors . Both of these calculations can be difficult ...
Credit cards. Credit card obligations are treated as general unsecured debts in bankruptcy. Your bankruptcy discharge will wipe out card debt. As a result, if you are about to file for bankruptcy, making credit card payments is typically a waste of your money. But be aware that if you don't plan to file your case for a long time, ...
But be aware that if you don't plan to file your case for a long time, stopping your payments can prompt the credit card company to file a lawsuit against you to recover its debt—although you'll be able to stop the litigation with a bankruptcy filing. Medical bills.
You can strip off a junior lien in Chapter 13 (not Chapter 7) if the value of your home is less than what you owe on the first mortgage. Car loans. Similar to your mortgage, a car loan is a secured debt. If you want to keep your car, you must continue making payments on the loan.
Bankruptcy doesn't cancel all debt. You'll also have to pay some obligations, called "secured debt," if you want to keep the property that serves as collateral, such as a home or car. Find out more about particular types of debt in bankruptcy.
Therefore, if you want to keep your home, you must continue making your regular mortgage payments during and after the bankruptcy. This is true for both Chapter 7 and Chapter 13. An exception to this rule exists if you are getting rid of a second or another junior lien through lien stripping in Chapter 13 bankruptcy.
Because the means test is a calculation of your average gross income over the six-month period prior to your filing, waiting can help you file bankruptcy under more favorable circumstances. For example, if you lose a high-income job, waiting six months to file will help your average income go down, helping you get into a Chapter 7 ...
You Expect a Windfall. Any property you own or money you expect to receive will be property of your bankruptcy estate after you file a bankruptcy case. To protect your property, you have to claim exemptions, which are available under either federal or state law.
Because she filed within two years after giving that money to her sister, the trustee can demand $5,000 from the sister as a fraudulent transfer, In either of these cases, waiting at least two years from the date of the transfer to file bankruptcy will prevent the trustee from trying to seize the funds.
A preference occurs when, within a certain time period before filing bankruptcy, while you are insolvent, you pay more than $600 in aggregate to one creditor and put that creditor in a better position than other creditors (you are "preferring" one creditor over another).
If you spent more than $675 (as of April 2016) on luxury goods or services on your credit card, for example, within 90 days before filing bankruptcy, there is a risk that the credit card company will ask the court not to discharge that debt, forcing you to pay it back despite the bankruptcy.
Joe owes Bank $1,500. He pays Bank $700 in a last ditch effort to pay it off. He can't make his finances work, so he files bankruptcy 62 days after paying the $700. The trustee will likely demand that Bank turn over the $700 to the bankruptcy estate, which has no effect on Joe.
The bankruptcy means test is a form that uses your income over the past six months to determine important issues, such as whether you qualify for Chapter 7, how long your Chapter 13 plan must be and how much you must pay into the Chapter 13 plan. Because the means test is a calculation of your average gross income over the six-month period prior ...
If the trustee or your creditors discover that you provided false information on your bankruptcy papers or didn't disclose all of your property, they can ask the court to reopen your case in order to administer those assets or even revoke your discharge. In some cases, you may also want to reopen your bankruptcy.
In Chapter 7 bankruptcy, you normally receive a discharge a few months after filing your case.
Until the court closes your case, you have a duty to cooperate with the trustee. This means that you may still be required to: turn over nonexempt assets to the trustee. provide additional information or documentation. testify in a pending lawsuit, or. appear at a deposition or 2004 examination.
In some cases, you may also want to reopen your bankruptcy. For example, if you accidentally forgot to list a debt or if a creditor is violating your discharge, you might ask the court to reopen your case to address these issues.
Your Responsibilities Don't End When You Receive a Discharge. Just because you received a discharge doesn't mean that you have no more responsibilities in your bankruptcy. If you have a complex bankruptcy with ongoing lawsuits or appeals, your case might remain open for a long time after the court grants your discharge.
If you filed for Chapter 13 bankruptcy, you typically have to complete your Chapter 13 repayment plan before the court will grant you a discharge. (To learn more, see The Bankruptcy Discharge .) Even if you receive a discharge, your bankruptcy remains open until the court enters a final decree or order closing your case.
Just because you received a discharge doesn't mean that you have no more responsibilities in your bankruptcy. If you have a complex bankruptcy with ongoing lawsuits or appeals, your case might remain open for a long time after the court grants your discharge.
In fact, if it isn’t done during your bankruptcy case, you can ask the court to do so after your bankruptcy case closes. Example 1. George incurred $50,000 in medical bills after becoming sick. The medical provider filed a lawsuit to recover the amount, received a judgment, and filed it with the county recorder’s office.
If you don’t pay your credit card bill or some other debt, you can expect your creditor to take you to court —especially if you owe a significant amount of money. Most creditors (but not all) must file a lawsuit and get a judgment before taking additional steps to force you to pay what you owe through collection tactics that include emptying your bank account or deducting money from your paycheck.
Robin was able to wipe out the $10,000 account and all future liability on the debt because , without a judgment, the creditor couldn’t file a lien. The lawsuit had no impact on the bankruptcy case.
If she’d filed before the lien attached, the credit card debt would have been wiped out in full, and the trustee would have paid off the entire tax bill. Be aware that a lien can affect your property in complex ways, and addressing all consequences is beyond the scope of this article.
a willful or malicious injury to a person or property (purposeful damage or harm). Any other type of judgment debt is likely dischargeable—meaning that if you file for bankruptcy, the creditor won’t be able to take action to collect against you (however, be sure to research nondischargeable debts ).
A win would allow the company to continue to collect the amount owed (it wouldn't get discharged). Keep in mind that a utility company can refuse to provide service to a bankrupt customer who wipes out a utility balance unless the customer pays a deposit. When you’ve done something questionable.
Some money judgments aren’t wiped out in bankruptcy. Also, a creditor can use a money judgment to put a lien on your property, and they aren’t always easy to get rid of in bankruptcy. So it’s important to evaluate your options—and possibly file your bankruptcy—before the court rules against you.
If you fail to be honest in your paperwork or in your dealings with the court, or you fail to cooperate with the court or your trustee, your case can be dismissed or you can be denied a discharge, but still have to abide by other bankruptcy requirements. Some of the reasons your discharge could be ...
At trial, the person who filed the complaint will have to prove that it is more likely than not that you lied on your bankruptcy petition or committed some other act or omission that should result in the denial of your discharge. If the bankruptcy judge rules against you, he will enter a judgment denying your discharge.
The first step in seeking to deny the discharge of a debtor is to file a complaint. This starts a lawsuit within the bankruptcy case, commonly called an adversary complaint. The complaint is a document usually filed by the bankruptcy trustee or a creditor, setting forth why the debtor should not receive the discharge.
Updated August 28, 2020. For most people who file bankruptcy, discharge is the goal. In exchange for that discharge, the bankruptcy system requires that a Chapter 7 or Chapter 13 debtor—the person who files a bankruptcy case—give up nonessential assets which will be distributed to creditors to satisfy debts.
Bankruptcy cases demand honesty and cooperation. If you fail to be honest in your paperwork or in your dealings with the court, or you fail to cooperate with the court or your trustee, your case can be dismissed or you can be denied a discharge, but still have to abide by other bankruptcy requirements. Some of the reasons your discharge could be denied include: 1 You hid property. 2 You destroyed your financial books or records. 3 You made false statements, orally or in writing, about your assets, earnings, and debts. 4 You failed to explain or account for the loss of property or money. 5 You failed to complete a required credit counseling or financial management course. 6 You violated a court order. 7 You failed to disclose a prior bankruptcy case. 8 You received a Chapter 7 bankruptcy discharge within the past eight years or a Chapter 13 discharge within the past six years.
So, losing your discharge means you will not receive the benefit of having filed the bankruptcy case, but you'll still lose your property. If the court enters a judgment against you, you also might have to worry about whether you'll be prosecuted on criminal charges.
If you are sued and the lawsuit is seeking to deny your bankruptcy discharge, you need to hire a lawyer that specializes in bankruptcy litigation.
One reason to file bankruptcy is to get back to good credit. Once your credit has gone bad, bankruptcy, for most people, is the fastest way to fix it. I encourage all my clients to rebuild your credit after bankruptcy.
Maybe impossible. The general rule is you can get approved two years after the bankruptcy, but it needs to be three years after the foreclosure–and if you had a house that was in your bankruptcy, they just look at that as a foreclosure that hasn’t even happened yet.
You what?! You say you reaffirmed the loan “after the bankruptcy.” I hope that means you just kept paying. But if you reaffirmed–you signed a reaffirmation paper and filed it with the court–then the bankruptcy does not protect you. You need permission from the lender to do a “short sale” to sell the house for less than its worth. Often, depending on the market, they will agree that you don’t have to pay any more money. Sometimes they won’t. Sometimes they hold you liable.
I THINK you won’t be able to get a mortgage until three years after the actual foreclosure, which is still some time in the future. I keep hearing from people who think they are able to get around that–most of them get real close and then something comes up.
If you reaffirmed you would NEED to get a shortsale approved–and if you could not get it approved, they could foreclose you and then garnish you for what they didn’t get at the foreclosure sale.
Steph: Aren’t you GLAD that you “somehow” didn’t reaffirm the condo? If you had reaffirmed it, you’d still be stuck with a condo that is “not selling” and where the “property values have declined.” Good luck saved you from poor thinking on that.
If you stop paying, they will repossess the car. At least they will, if it’s worth coming to get. (Unless the car was paid off through the chapter 13? Obviously i haven’t seen your chapter 13 plan.)
In fact, you should be aware that if you tell a creditor of your bankruptcy plans, the creditor might increase its efforts to get money out of you before it's too late. Ultimately, it's impossible to predict what the creditor will decide to do. That doesn't mean that you don't have options, however.
That doesn't mean that you don't have options, however. Here are additional approaches to consider: 1 Hiring an attorney. If you hire a bankruptcy attorney, and you inform your creditor of that fact, the creditor will have to call your attorney instead of you. Some bankruptcy attorneys will accept a small down payment—perhaps as little as $100—as an initial retainer so that you can avoid the calls while saving the rest of your attorneys' fees. 2 Ask the creditor to stop. Additionally, you can write to the creditor and ask it to stop calling you. Keep in mind, however, that you might want to know what's going on with your account. Unless you're judgment proof (you don't have any assets the creditor can get), you might want to consider another alternative.
Some bankruptcy attorneys will accept a small down payment—perhaps as little as $100—as an initial retainer so that you can avoid the calls while saving the rest of your attorneys' fees. Ask the creditor to stop. Additionally, you can write to the creditor and ask it to stop calling you.
Usually, when you tell a creditor that you intend to file for bankruptcy, you do so to let them know that you don't have any money and that it isn't worth the effort to pursue you. But, that isn't always the case. It's also common to use this tactic as a bargaining chip to work towards a lower debt settlement amount.
For instance, if you settle with a few, but not all, and end up filing for bankruptcy anyway, you 'll have paid out needless funds. Worse yet, you'll likely have to pay taxes on any amount forgiven.
Additionally, you can write to the creditor and ask it to stop calling you. Keep in mind, however, that you might want to know what's going on with your account. Unless you're judgment proof (you don't have any assets the creditor can get), you might want to consider another alternative.
Unfortunately, telling your creditors that you plan to file for bankruptcy is unlikely to do the trick. They can continue to call. Keep in mind, however, that depending on your goals, another approach might work just as well, or perhaps even better.